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A    TREATISE 


FRAUDULENT  CONVEYANCES 


CREDITORS'    BILLS, 


WITH  A  DISCUSSION  OF 


VOID  AND  VOIDABLE  ACTS. 


BY 

FREDERICK    S.    WAIT, 

OP  THE   NEW  YORK  BAR, 

Author  of  '^Insolvent  Corporations,^''  ^^Trial  of  Title  to  Land,"  etc. 


SECOND      KDITION 
Revised  and  Enlarged. 


NEW   YORK: 
BAKER,   VOORHIS  &  CO.,   LAW  PUBLISHERS, 
'      66   NASSAU   STREET. 
1889. 


E.  O.  JENKINS'  SONS,  PRINTERS, 
NEW  YORK. 


Copyright,  1884, 
By  Frederick  S.  Wait. 


Copyright,  1889, 
By  Frederick  S.  Wait. 


PREFACE  TO  SECOND  EDITION, 


The  second  edition  of  this  work  was  called  for  over  two 
years  since,  but  other  professional  engagements  of  the 
writer  seemed  to  render  an  earlier  appearance  of  the  vol- 
ume impossible.  Numerous  additions  have  been  embodied 
in  the  original  text,  a  number  of  new  sections  have  been 
written,  and  the  citations  of  authorities  increased  about  one 
thousand  cases  over  the  number  contained  in  the  first 
edition.  By  enlarging  the  size  and  increasing  the  number 
of  the  pages  it  is  estimated  that  over  one  hundred  pages 
of  new  matter  will  be  found  embodied  in  this  edition. 
Special  efforts  have  been  put  forth  to  utilize  the  latest 
important  authorities  bearing  upon  the  topics  discussed. 
The  multitude  of  recent  cases  involving  fraudulent 
alienations  and  covinous  schemes  devised  to  defeat  the 
claims  of  creditors,  demonstrates  how  important  and  far- 
reaching  the  subject  under  consideration  has  become. 
Sometimes  a  creditor's  entire  fortune  is  dependent  upon  a 
correct  exposition  of  the  statute  of  Elizabeth.  The  writer 
is  confirmed  in  his  early  conviction  that  the  policy  result- 
ing in  a  relaxation  of  remedies  against  the  person  which  an 
enlightened  civilization,  seemed  to  demand,  has  created  a 
numerous  and  very  obnoxious  class  of  what  may  be  called 
professional  fraudulent  debtors.  These  unworthy  persons 
usually  display  much  skill  in  evading  the  sharp  edges  of  the 
criminal  law,  but  they  nevertheless  continue  to  depredate 
upon  the  sacred  property  rights  of  their  fellow-men.    Some 


740804 


IV  PREFACE    TO    SECOND    EDITION. 

new  barrier  should  be  erected  for  the  protection  of  honest 
people. 

We  desire  to  acknowledge  the  great  kindness  of  profes- 
sional friends  in  various  sections  of  our  country. 

AsTOR  Building,  io  Wall  Street. 
New  York,  Sept.,  1889. 


PREFACE  TO  FIRST  EDITION. 


Recent  innovations  in  civil  procedure  have  effected 
important  changes  in  the  remedies  of  creditors  in  proceed- 
ings instituted  to  convert  equitable  assets  or  to  reach  prop- 
erty fraudulently  alienated  or  held  under  a  secret  trust  for 
the  debtor.  The  aim  of  this  treatise  is  to  furnish  suitors 
with  a  practical  guide  in  this  class  of  litigation.  The  earlier 
statutes  and  decisions  concerning  fraudulent  alienations  to 
defeat  creditors  have  been  noticed ;  the  debtor's  rights  and 
interests  in  property  available  to  creditors  have  been  con- 
sidered ;  and  the  different  forms  of  remedies  or  of  procedure 
which  may  be  invoked  either  at  law  or  in  equity  ;  the  status 
essential  to  entitle  a  creditor  to  maintain  a  bill ;  questions 
of  parties,  complainant  and  defendant  ;  of  pleading ;  the 
form  and  effect  of  the  judgment ;  and  the  rules  regulating 
provisional  relief,  reimbursement  and  subrogation,  have 
been  treated,  the  discussion  embracing  both  chancery  prac- 
tice and  the  reformed  procedure. 

The  discussion,  however,  has  not  been  limited  to  the  de- 
tails of  practice  or  procedure.  Chapters  have  been  devoted 
to  the  subjects  of  intention,  consideration,  and  indicia  of 
fraud  ;  to  the  important  questions  relating  to  change  of 
possession,  and  generally  to  evidence  and  defenses  as  ajijier- 
taining  to  these  suits.  The  rules  applicable  to  frauds  upon 
creditors  springing  out  of  the  relationship  of  husband  and 
wife,  and  relative  to  covinous  general  assignments  and 
fraudulent  chattel  mortgages,  have  been  examined,  and  *he 
doctrine  of  spendthrift  trusts  discussed.  Special  pains  have 
been  taken  in  the  treatment  of  tlie  law  of  notice,  actual 
and  constructive,  as  applied  to  our  subject. 


VI  PREFACE    TO    FIRST    EDITION. 

One  of  the  chief  aims  of  a  work  of  this  kind  is  to  hung; 
side  by  side  the  decisions  in  different  States  upon  kindred 
questions  and  construing  similar  statutes.  Federal  authori- 
ties have  been  frequently  quoted,  cited,  and  relied  upon, 
because  more  universally  accredited,  and  in  pursuance  of  a 
belief  that  such  a  policy  tends  to  render  the  body  of  our 
law  more  symmetrical  and  harmonious.  Still,  the  great 
mass  of  the  decisions  collated  and  discussed  has  been  drawn 
from  the  courts  of  last  resort  in  the  various  States. 

It  is  needless  to  repeat  the  criticisms  advanced  in  the 
body  of  the  work  upon  the  tendency  manifested  in  certain 
authorities  to  close  some  of  the  sources  of  relief  formerly 
available  to  complainants.  The  creditor's  power  to  im- 
prison the  debtor  or  inflict  personal  punishment  upon  him, 
and  coerce  payment  in  that  way,  is  practically  destroyed  ; 
hence,  we  urge,  remedies  against  property  rights  and  inter- 
ests should  be  strengthened  and  perfected.  A  policy  under 
which  a  debtor  can  enjoy  "  a  beneficial  interest  in  property 
by  such  a  title  that  creditors  cannot  touch  it "  is  not  to  be 
encouraged  or  commended. 

The  chapters  devoted  to  Void  and  Voidable  Acts  do  not 
entirely  reflect  the  author's  original  design.  The  lack  of 
available  space,  the  pressure  and  anxiety  incident  to  active 
practice,  and  other  causes,  necessitated  the  publication  of 
that  portion  of  the  work  in  its  present  compressed  form. 
The  topic  was  suggested  by  the  main  discussion  (see 
§  408),  and  is  believed  to  be  not  wholly  out  of  place  in  this 
volume. 

New  York,  May,  1884. 


CONTENTS. 


FRAUDULENT    CONVEYANCES    AND 
CREDITORS'    BILLS. 


CHAPTER  I. 

PACE 

Introductory  Observations. — Growth  of  the  Law  con- 
cerning Fraudulent  Conveyances. — Phases  of  the 
Subject, i 


CHAPTER    II. 

Property  Susceptible  of  Fraudulent  Alienation. — Assets 

Available  to  Creditors, 44 

CHAPTER   III. 

Creditors'  Remedies,         ........       78 

CHAPTER    IV. 
Status  of  Attacking  Creditors, 113 

CHAPTER   V. 
Existing  Creditors, 143 

CHAPTER   VI. 
Subsequent  Creditors, 153 

CHAPTER   VII. 
Who  may  be  Complainants, 170 


Vlll  CONTENTS. 

CHAPTER   VIIL 

PAGE 

Parties  Defendant, 197 

CHAPTER   IX. 
Complaint 214 

CHAPTER   X. 
Of  the  Plea  or  Answer, 237 

CHAPTER   XI. 
Of  the  Judgment  or  Decree, 247 

CHAPTER   XII. 

Provisional  Relief. — Injunction. — Receiver. — Arrest,       .     264 

CHAPTER   XIIL 
Reimbursement  and  Subrogation, 271 

CHAPTER   XIV. 
Intention, 279 

CHAPTER   XV. 
Consideration, 296 

CHAPTER   XVI. 
Indicia  or  Badges  of  Fraud, 314 

CHAPTER   XVII. 

Change  of  Possession. — Delivery,  .        .        .        .     •  .        .     348 

CHAPTER   XVIII. 
Evidence, 374 


CONTENTS.  IX 


CHAPTER   XIX. 


PAGE 


Defenses, 396 

CHAPTER   XX. 

Husband  and  Wife. — Fraudulent  Marriage  Settlements,     409 

CHAPTER   XXI. 
Fraudulent  General  Assignments, 426 

CHAPTER   XXII. 

Fraudulent  Chattel  Mortgages, 469 

CHAPTER    XXIII. 
Spendthrift  Trusts, 483 

CHAPTER   XXIV. 

Bona  Fide   Purchasers. — Actual  and  Constructive  No- 
tice.— Fraudulent  Grantees, 500 

CHAPTER   XXV. 
Preferences, 530 

CHAPTER   XXVI. 

Conveyances    Valid    between    the    Parties. — Relief    to 

Defrauded  Grantors, 540 

CHAPTER   XXVII. 
Jurisdictional  Questions. — Conclusion,        ....     558 


X  CONTENTS, 

VOID   AND   VOIDABLE   ACTS. 
CHAPTER   I. 

PAGE 

Void  and  Voidable  Acts  Discussed, 563 

CHAPTER    H. 
Voidable  Acts, 628 

CHAPTER    III. 
Ratification  or  Affirmance  of  Voidable  Acts,         .        .     673 

CHAPTER    IV. 
Avoidance  of  Voidable  Acts, 689 

INDEX, 711 


TABLE    OF   CASES 

[References  are  to  pages.] 


Aaronson  v.  Deutsch,  435. 
Abbey  v.  Dewey,  12. 

V.  Deyo,  76. 
Abbot  V.  Johnson,  226. 
Abbott  V.  Draper,  602. 
V.  Goodwin,  479. 
V.  Tenney,  33,  55,  86. 
V.  Wood,  38. 
Aber  v.  Brant,  147. 
Abercrombie  v.  Bradford,  433. 
Abney  v.  Kingsland,  371,  389. 
Acer  V.  Westcott,  506,  508. 
Acker  v.  Leland,  236. 
V.  White,  277. 
Ackerman  v.  Hunsicker,  309, 
Ackley  v.  Dygert,  696. 
Ackworth  v.  Kempe,  408. 
Adair  v.  Brimmer,  674,  675. 
■* Adams  v.  Davidson,  173,  191,  338,  386, 
387,  388. 
V.  Hull,  313. 
Addington  7a  Etheridge,  470. 
Addison  v.  Bowie,  192. 
Adee  v.  Bigler,  120,  136,  265. 
Adler  v.  Apt,  320. 

V.  Ecker,  in,  428,  432. 
V.  Fenton,  82,  95,  116. 
V.  Milwaukee   P.  B.   Mfg.    Co., 
200. 
>  Adsit  V.  Butler,  114,  119,  120,  126,  129, 
140,  141. 
V.  Sanford,  132,  215. 
-(Etna  Life  Ins.  Co.  v.  Middleport,  627. 
^tna  Ins.  Co.  v.  Johnson,  12. 
JE\.na.  Nat.  Bank  v.  Fourth  Nat.  Bank, 

67. 
V.  Manhattan   Lite  Ins.  Co., 

42,  56. 
7K  U.  S.  Lite  Ins.  Co.,  42,  422. 
Ager  V.  Duncan,  544. 

V.  Murray,  61. 
Agricultural  Ins.  Co.  v.  Barnard.  655. 
Albany  City   Bank   7>.   Schermerhorn, 
534- 


Albany  &  R.  I.  &  S.  Co.  v.  Southern 

Agr.  Works,  467. 
Albert  v.  Back,  236. 
Alden  7/.  Gregor)-,  222. 
Aldrich  v.  Earle,  385. 
Aldridge  v.  Muirliead,  398,  414. 
Alexander,  I/i  re,  324. 

V,  Caldwell,  384. 
V.  Crittenden,  410. 
V.  Nelson,  581,  582. 
V.  Quigley,  208. 
V.  Todd,  339. 
Allan  V.  McTavish,  15. 
Allen  V.  Berry,  89,  108,  274. 

V.  Berryliili,  566,  654. 

V.  Booker,  602. 

V.  Center  Valley  Co.,  St,. 

V.  Cole,  240. 

V.  Cowan,  362,  365. 

V.  Gillette,  659. 

V.  Halliday,  525. 

V.  Inhabitants  of  Jay,  606,  607. 

V.  Kennedy,  530. 

V.  Kinyon,  281. 

V.  Massey,  in. 

V.  Minor,  641. 

V.  Montgomery,  183. 

V.  Mower,  238. 

V.  Poole,  638,  693. 

V.  Rundle,  38,  295. 

V.  Smith,  367. 

V.  Thomas,  67. 

V.  Vestal,  208. 
Allenspach  ?'.  Wagner,  171. 
Allentown  Bank  7/.  Beck,  369. 
Alley  V.  Conneli,  245,  271,  272. 
Aliis  V.  Billings,  571. 
Allison  V.  Hagan,  525,  541,  545. 

2K  Welk'r,  198,  205. 
Allore  V.  Jewell,  651,  652. 
Allyn  V.  Thurston,  124,  140,  214. 
Alnutt  V.  Leper,  1 14. 
Alsager  t'.  Rowley,  125. 
V.  Spalding,  597. 


Xll 


References 


TABLE    OF    CASES. 


[ 


are  to  pages. 


Alston  V.  Rowles,  177,  344. 
Alsworth  V.  Coidtz,  690. 
Alton  V.  Harrison,  325,  326. 
Altringer  v.  Capeheart,  312. 
Amer.  Exch.  Bank  v.  Inloes,  447. 
Amer.  Union  Tel.  Co.  v.  Middleton,  558. 
Ames,  Ex  parte,  537. 
V.  Blunt,  541. 
V.  Gilmore,  8,  251,  328, 
Amherst's  Trusts,  In  re,  491. 
Ammon's  Appeal,  167,  344. 
Amsden  v.  Manchester,  382,  393. 
Anderson  v.  Bradford,  134,  135. 
V.  Brooks,  371. 
V.  Dunn,  301. 
V.  Lachs,  538. 
V.  Radcliffe,  196. 
V.  Reed,  269. 

V.  Roberts,  6,  377,  527,  569, 
571.  572,  5^2,  588,  619, 
620. 
V.  Wheeler,  405. 
Andrews  v.  Jones,  303,  304,  380. 
V.  Marshall,  37. 
V.  Rowan,  73,  94. 
V.  Spurlin,  485. 
Andruss  v.  Doolittle,  181,  544. 
Angel  V.  McLellan,  646. 
Ang-ier  v.  Ash,  108. 
Anglo-Californian  Bank  v.  Ames,  634. 
Annin  v.  Annin,  148,  161,  207,  232, 
Anonymous  (13  Ves.  590),  648. 

(I  Wall.  Jr.  113),  154. 
Ansonia  B.  &  C.  Co.  v.  New  Lamp 

Chimney  Co.,  406. 
Antelope  (The),  212. 
Anthony  v.  Harrisoii,  313. 
V.  Hutchins,  671. 
V.  Stype,  463. 
V.  Wade,  25,  75. 
V.  Wilson,  582. 
V.  Wood,  139. 
Anthracite  Ins.  Co.  v.  Sears,  47. 
Apperson  v.  Burgett,  251,  328,  369. 
Appleton  V.  Warner,  612. 
Arbourn  v.  Anderson,  613. 
Archer  v.  Lapp,  326,  392. 
Archibald  v.  Thomas,  599. 
Ardesco  Oil  Co.  v.  North  Amer,  Oil  & 

M.  Co.,  467. 
Arendale  v.  Morgan,  629. 
Arglasse  v.  Muschamp,  558. 
Armfitld  v.  Armfield,  304. 
Armington  v.  Rau,  194,  540. 
Armitage  v.  Mace,  413. 

V,  Widoe,  640. 
Armjry  v.  Delamirie,  392. 
Armour  v.  Mich.  Cent.  R.R.  Co.,  682. 


Armstrong  v.  Sanford,  269. 
V.  Scott,  246. 

V.  Toler,  592,  596, 608,  609.  ^ 
Arnett  v.  Cloudas,  629. 
Arnholt  v.  Hartwig,  502,  504. 
Arnold  v.  Arnold,  228. 

V.  Richmond  Iron  Works,  681. 
Arnot  V.  Erie  Ry.  Co.,  313. 
Arnwine  v.  Carroll,  54. 
Arthur  v.  Commercial  &  R.R.  Bank, 

27,  378,  431,  443- 
Arundel  v.  Trevillian,  597. 
Arundell  v.  Phipps,  352. 
Arzbacher  v.  Mayer,  484. 
Ash  V.  Putnam,  630. 
Ashcroft  V.  Walworth,  6r,  62. 
Ashfieid  V.  Ashtield,  48,  63. 
Ashhurst  v.  Given,  492,  498. 
Ashhurst's  Appeal,  522. 
Ashlin  V.  Langton,  640. 
Ashmead  v.  Hean,  288. 
Ashmole  v.  Wainwright,  670. 
Aspinall  v.  Jones,  95. 
Astley  V.  Reynolds,  669. 
Astor  V.  Wells,  283. 
Athey  v.  Knotts,  49. 
Atkins  V.  Kinnan,  656. 
Atlantic  Nat.  Bank  v.  Tavener,  410, 

411,  530. 
Att'y  Gen'l  v.  Brown,  241. 

V.  Corporation  of  Poole,205. 
V.  Cradock,  226. 
V.  Day,  269. 

V.  Dean  of  Windsor,  392. 
Atwood  V.  Impson,  150,  284,  517,  518, 

519.  X 

Auburn  Exch.  Bank  v.  Pitch,  530,  531. 
Aurand  v.  Schaffer,  420. 
Austin  V.  Barrows,  96. 

V.  Charlestown  Seminary,  639. 
V.  Morris,  133. 
V.  Winston,  546,  547. 
Avery  v.  Hackley,  211. 

V.  Johann,  255,  517. 
V.  Judd,  195. 
V.  Street,  318,  369. 
Ayres  v.  Husted,  323. 
V.  Scribner,  7. 

Babb  V.  Clemson,  328,  365. 

Babcock  v.  Eckler,  13,  17,  24,  148,  152,— 

163,   165,  279,  293,  299, 

410,  416. 
V.  Middlesex  Sav.  Bank,  380. 
Bach  V.  Cook,  582. 

Bachman  v.  Sepulveda,  208,  251,  261. 
Backentoss  v.  Speicher,  630. 
Backhouse  v.  Harrison,  517. 


J!e/erenceij         TABLE     OF     CASES.  [are /o /ag-es. 


XIU 


Backhouse  v.  Jett,  13. 
Bacon  v.  Scannell,  364. 
Badger  v.  Badger,  222,  223,  224,  401. 
V.  Phinney,  684,  703. 
V.  Story,  182. 
Bagley  v.  Bowe,  455,  463,  464. 
Bailey  Z'.  Bailey,  145,  157,  177. 
V.  Bamberger,  698. 
V.  Buell,  581. 
V.  Burton,  120,  121. 
V.  Glover,  224,  402. 
V.  Lane,  94. 
V.  Mills,  434. 
V.  Ryder,  232,  261,  559. 
Bailie  v.  McWhorter,  495. 
Bain  2^.  Brown,  661. 
Bainton  v.  Ward,  63,  64. 
Baird  v.  Mayor,  etc.,  of  N.  Y.,  435. 
Baker  v.  Bartol,  174. 

V.  Bliss,  507,  512,  515,  517. 
V.  Connell,  312. 
V.  Disbrow,  682. 
V.  Oilman,  145,  168,  169,  548. 
V.  Humphrey,  30. 
V.  Kelly,  295. 
V.  Lyman,  104. 
V.  Morton,  668. 
v.  Palmer,  406. 

V.  Union  Mut.  Life  Ins.  Co.,  313. 
Baldwin  v.  Buckland,  457. 
V.  Burrows,  675. 
V.  Campfield,  593. 
V.  Cawthorne,  543,  593. 
V.  Dunton,  650. 
V.  Flash,  481. 
V.  Freydendall,  343. 
V.  Hale,  405. 
V.  Liverpool  &   G.  W.  S.  S. 

Co.,  668. 
v.  Martin,  224. 
V.  Peet,  89,  429,  443.  461. 
V.  Rogers,  75. 
V.  Ryan,  140. 
V.  Van  Deusen,  625. 
Baldy  v.  Stratton,  599. 
Bales  V.  State,  667. 
Ball  V.  Loomis,  355. 

V.  Slal'ten,  184,  429. 
v.  Siafter,  182. 
Ballentine  v.  Beall,  120.  121,  172,  175. 
Ballou  7'.  Jones,  129,  134. 
Balto.  &  O.  R.R.  Co.,  lix  parte,  560. 

V.  Hoge,  339.  391. 
Bancroft  v.  Blizzard,  283. 

V.  Curtis,  415. 
Banfield  v.  Whipple,  531. 
Bangs  V.  Mcintosh,  655. 
Bank  v.  Cooper,  183. 


Bank  v.  Forney,  53. 

V.  Harris,  136,  205. 
Bank  of  Batavia  v.  N.  Y.,  L.  E.  &  W. 
R.R.  Co..  682. 
Chillicolhe  v.  Dodge,  627. 
Georgia?'.  Higginbottom,  325. 
Leavenworth    v.   Hunt,    470. 

537- 
Middlebury  z*.  Rutland,  381. 
Rome  V.  Haselton,  172. 
Silver  Creek  v.  Talcott,  7,  464. 
the  Metropolis  v.  Guttschlick, 

67. 
the   U.  S.  V.   Housman,   148, 

151.  331.  369. 
Utica  V.  City  of  Utica,  260. 
Banks  v.  Judah,  660. 
Bannon  v.  Bowler,  470. 
Baptist  Church  v.  Brooklyn   Fire  Ins. 

Co.,  388. 
Barbarin  v.  Saucier,  107. 
Barber  v.  Graves,  639. 
Barbour  ?'.  Priest,  522. 
Barker,  Matter  of,  651. 

V.  Bradley,  67. 

V.  Davis,  487. 

V.  Dayton,  93,  268. 

V.  French,  335. 

V.  Hibbard,  647. 

V.  Smith,  184. 

V.  Wilson,  638. 
Barkow  v.  Sanger,  321,  377. 
Barling  v.  Bishopp,  145,  164,  193. 
Barlow  v.  Arnold,  224. 

V.  Myers,  68. 
Barnard  v.  Campbell,  630,  631,  632. 
Barnes  v.  Brown,  549. 

V.  Gill,  192. 

V.  Hathaway,  653. 

V.  Morgan,  48,  61,  62,  93. 
Barnet  v.  Fergus,  470. 
Barnett  v.  Blake,  491. 
Barney  v.  Griffin,  4.31,  443,  449,  479.    - 
Barnitz  v.  Rice,  15. 
Barnum  v.  Hempstead,  464. 
Barr  v.  Baker,  705. 
V.  Cubbage,  69. 
V.  Reitz,  349,  362,  364,  367.  - 
Barrack  v.  McCulloch,  49. 
Barrett  v.  Nealon,  282. 
Barron  v.  Morris,  476. 
Barrow  v.  Bailey,  12,  1 14,  241,  32S,  336.  ' 

z>.  Barrow,  303,  304,  541. 

7'.  Paxlon,  354. 
Barry  7'.  Abbot,  102,  175. 

V.  Equitable  L.  A.  Soc,  46. 
V.  Kennedy,  58. 
Barstow  v.  KiLington,  33. 


-XIV 


Jie/crences'j         TABLE     OF     CASES.         [^are  to />a£-es. 


Bartle  v.  Coleman,  599. 
Bartles  v.  Gibson,  327,  517. 
Bartlett  T/.  Blake,  6,  355. 

V.  Cheesbrougli,  342. 
V.  Cowles,  704. 
z'.  Drake,  699,  705. 
■^  V.  Drew,  188,  190,  191,  212. 

V.  McNeil,  94. 
Barto's  Appeal,  81. 
\Barton  v.  Hosner,  125,  134,  178,  179, 
182,  185. 
V.  Moss,  660. 
V.  Van  Heythuysen,  30. 
Basford  v.  Pearson,  604. 
Basset  v.  Nosworthy,  527. 
Bassett  v.  Brown,  705. 

V.  McKenna,  167,  169. 
V.  St.  Albans  Hotel  Co.,  113. 
Batchelder  v.  White,  7. 
Bate  V.  Graham,  179,  206,  252. 
Bateman  v.  Fargason,  609. 
Bates  V.  Ableman,  458. 

V.  Bradley,  182,  183. 
V.  Campbell,  370. 
V.  Lyons,  116. 
V.  N.  Y.  Ins.  Co.,  670. 
V.  Plonsky,  127,  129,  173. 
Battell  V.  Torrey,  656. 
Battenhausen  v.  Bullock,  508. 
Battles  V.  Laudenslager,  7,  391. 
Bauknight  v.  Sloan,  172,  173,  205. 
Baum  V.  Stone,  646. 
^  Baxter  z>.  Earl  of  Portsmouth,  652. 

V.  Moses,    113,   115,  117,    133, 

137- 
Bay  ^'.  Cook,  125,  133. 
^  Bayard  v.  Hoffman,  33,  42,  47,  55,  86, 
103,  105. 
Baylis  v.  Dineley,  642. 
V.  Le  Gros,  621. 
Bayne  v.  State,  411. 
Bayspoole  v.  Collins,  297. 
Bay  State  Iron  Co.  v.  Goodall,  207,  244. 
Baze  V.  Arper,  108. 
Beach  v.  Bestor,  137. 
V.  Kezar,  598. 
V.  Viles,  no. 
■u.  White,  167. 
Beall  V.  Williamson,  600. 
Beals  V.  Guernsey,  354. 

V.  See,  702. 
Beamish  v.  Hoyt,  54. 
Bean  v.  Amsinck,  597. 
V.  Edge,  67. 
•-■  V.  Smith,  39,  72,  90,  273,  328,  527. 

Beard  v.  Dedolph,  413. 
Beards  v.  Wheeler,  289. 
Beardsley  v.  Hotchkiss,  679,  6S9. 


Beardsley  Scythe  Co.  v.  Foster,   199,  — 

214,  215. 
Beatty  v.  Fishel,  9. 
Beaubien  v.  Beaubien,  216,  224,  405. 
Beaumont  v.  Herrick,  90,  210. 

Beck  V.  Burdett,  6,  79,  104,  119.  

V.  Parker,  434. 
Becker,  Matter  of,  639. 

V.  Torrance,  68,  93,  186,  236.  — 
Beckett  v.  Cordley,  695. 
Beckwith  v.  Burrough,  42,  355,  367. 

V.  Union  Bank,  429. 
Bedell  v.  Chase,  293. 

Z'.  Scruton,  405. 
Bedford  v.  Penny,  517. 
Bedinger  v.  Wharton,  704. 
Beebe  v.  Saulter,  178. 
Beecher  ^'.  Clark,  285,  298,  331. 
Beeckman  v.  Montgomery,  161,  163. 
Beekman  v.  Bonsor,  572. 
Beer  v.  Hooper,  405. 
Belding  v.  Pitkin,  592. 
Belford  v.  Crane,  23. 
Belknap  v.  Bender,  67. 
Bell  V.  Dagg,  625. 
V.  Johnson,  170. 
V.  Lamprey,  405. 
V.  Leggett,  536. 
V.  Merrifield,  231,  232,  247. 
Bellamy  v.  Bellamy,  541,  547. 
Beller  v.  Jones,  651. 
Bellows  z'.  Wells,  372. 
Belmont  Branch  Bank  v.  Hoge,  517. 
Belt  7/.  Ferguson,  424. 

V.  Raguet,  344. 
Benedict  v.  Huntington,  464,  465. 
Benfield  v.  Solomons,  455. 
Benford  v.  Schell*  362,  367, 
Benham  v.  Bishop,  685. 
Benner  v.  Porter,  574. 
Bennet,  Ex  parte,  491. 
Bennett  v.  Austin,  658,  660,  676,  6"]%,  " 
680. 
V.  Buchan,  507. 
V.  Davis,  640. 
V.  Ellison,  432,  443,  449. 
V.  McGuire,  93,  94. 
V.  State,  667. 
V.  Stout,  114. 
Benninghoff  z>.  Agricultural  Ins.  Co., 

675. 
Bensell  v.  Chancellor,  648,  700. 
Benson  v.  Flower,  57. 

V.  Monroe,  668,  669. 
Bentley  v.  Craven,  660. 

V.  Whittemore,  467. 
Benton  v.  Allen,  201. 
V.  Snyder,  356. 


He/erencgs'j         TABLE     OF     CASES.  \_are  io/ages. 


XV 


Benton  v.  Thornhill,  322. 
Bentz  V.  Rockey,  15,  28. 
Bergen  v.  Bennett,  679,  688. 

V.  Carman,  98. 
Bernheim  v.  Beer,  31. 
Berry  v.  Riley,  431. 
Berryman  v.  Sullivan,  123, 
Bessent  v.  Harris,  599. 
Besson  v.  Eveland,  416. 
Best  V.  Staple,  195. 
Beste  V.  Burger,  445. 
Bethel  Steam  Mill  Co.  v.  Brown,  367. 
Belts  77.  Carroll,  703. 

7/.  Union  Bank,  312. 
''Beus  V.  Shaughnessy,  449,  450,  451. 
Beverley's  Case,  648,  650. 
Bholen  v.  Cleveland,  467. 
Bibb  V.  Baker,  325,  336. 

V.  Freeman,  14,  144. 
Bickel  V.  Erskine,  639. 
Bickler  v.  Kendall,  328. 
Bidault  V.  Wales,  630. 
Biddinger  v.  Wiland,  520. 
Bidlach  •z/.  Mason,  190. 
Bigelowr  V.  Andress,  128,  137. 

V.  Ayrault,  42,  48,  217. 
V.  Doolittle,  324,  325. 
V.  Heaton,  630. 
V.  Kinney,  684. 
-  V.  Stringer,  337,  436,  437,  440, 

466. 
Biggs  V.  Barry,  630. 
Billgerry  v.  Branch,  623. 
Billhofer  7/.  Heubach,  121. 
Billings  V.  Billings,  280. 

V.  Russell,  279,  296,  297,  298. 
V.  Stewart,  93. 
Billingsley  v.  Bunce,  466. 
V.  White,  361. 
Billson  V.  Crofts,  491. 
Billups  V.  Sears,  92. 
Bingham  7/.  Barley,  693. 

7J.  Weidervvax,  312. 
Binks  7A  Rokeby,  174. 
Binnie  v.  Walker,  140. 
Bird  V.  Andrews,  340. 

V.  Bolduc,  344. 
Birdsall  7/.  Russell,  505,  506,  507. 
Birely's  Ex'rs  7/.  Staley,  92. 
Birkbeck  v.  Ackroyd,  310. 
Bisbing  v.  Third  Nat.  Bank,  370. 
Bishop  V.  O'Connell,  358,  363. 
V.  Schneider,  502. 
V.  Stebbins,  324,  530. 
V.  Stewart,  705. 
V.  Warner,  470. 
Bissell  7'.  City  of  Kankakee,  607. 
V.  Hopkins,  349,  354. 


Bissell  V.  Mich.  Southern  &  N.  I.  R.R. 

Cos.,  568. 
Black  V.  Kuhlman,  297. 

V.  Nease,  154,  161. 
Blackburn  v.  Smith,  706. 
Blackman  v.  Preston,  320,  331. 

V.  Wheaton,  30,  31,  356. 
Blackstone  Bank  v.   Davis,  485,  486, 

.495- 
Blair  v.  Cuming  County,  607. 

V.  Smith,  525. 
Blaisdell  ?'.  Cowell,  9. 
Blake  v.  Blake,  178,  545. 

V.  Freeman,  558. 

V.  Nelson,  705. 

V.  Sawin,  184. 

V.  White,  393. 
Blakeslee  v.  Rossman,  321,  356,  470, 

478,  480,  481. 
Blanchard  v.  Goss,  588. 
V.  Mann,  381. 
z>.  Nestle,  650. 
Blanchenav  v.  Burt,  616. 
Blandin,  /«  r^,  410. 
Blaut  V.  Gabler,  293,  362. 
Bleakley's  Appeal,  594. 
Blenkinsopp  7'.  Blenkinsopp,  81. 
Blennerhassett  t.  Sherman,  297,  298, 

320,  325,  330,  331.333- 
Blight  V.  Schenck,  456. 
Bliss  V.  Matteson,  535,  597. 
Blodgett  V.  Chaplin,  336. 
Blondheim  7',  .Moore,  266. 
Bloodgood  7'.  Clark,  94,  264. 
Bloom  V.  Burdick,  639. 
Blount  V.  Costen,  171. 
Blo.xam  v.  Elsee,  61. 
Blue  V.  Penniston,  390. 
Blystone  v.  BIystone,  594. 
Boardman  7a  Halliday,  445,  463. 
Bobb  V.  Bobb,  230. 
Bockes  V.  Lansing,  194. 
Boerum  v.  Schenck,  659,  676,  677. 
Boggs  V.  McCoy,  208. 

V.  Thompson,  7^. 
Boils  V.  Boils,  193. 
Bolt  7'.  Rogers,  594. 
Bomberger  7'.  Turner,  131. 
Bond  V.  Pacheco,  581. 
Bonestecl  v.  Sullivan,  540,  554. 
Bongard  v.  Block,  145,  193. 
Boobier  7/.  Boobier,  637. 
Boody  7/.  McKenney,  682,  684, 698,  703.- 
Booher  7'.  Worrill,  325,  328,  411, 
Booker  7a  Robbins,  599. 
Bool  7'.  Mix,  638,  691,  693,  698.  — 
Boone  7'.  Chiles,  401,  503. 

V.  Hall,  183. 


XVI 


Re/erencc/j         TABLE     OF     CASES.  [^are  io jiag-es. 


Boone  County  v.  Keck,  205. 
Booraem  v.  Wells,  660, 
Booth  V.  Barnum,  507. 

7/.  Bunce,  29,  89,  108,  390. 

TJ.  Clark,  188. 

7/.  Patrick,  181. 

V.  Warrington,  402. 
Boothby  v.  Brown,  358. 
Bordeaux  ads.  Treasurers,  613. 
Borden  7a  Doughty,  272. 
Borland  7/.  Mayo,  327. 
Born  V.  Shaw,  99,  343,  357. 
Borst  V.  Corey,  421. 
Boston  Bank  v.  Chamberlin,  681. 
Boston   Music    Hall   Assoc,    v.  Cory, 

367. 
Bostwick  V.  Burnett,  289. 

V.    Menck,  94,  185,  186,  187, 
250. 
Botsford  V.  Beers,  133. 
Bott  V.  Smith,  49. 
Bottomley  v.  United  States,  582. 
Boud  7/.  Bronson,  364. 
Bourne  v.  Stevenson,  181. 
Bouslough  7'.  Bouslough,  145,  179,  193. 
Bowden  v.  Johnson,  185,  221,  239,  340, 
Bowe  V.  Arnold,  128. 

V.  Campbell,  102. 
Bowen  v.  Bell,  603. 

V.  Bramidge,  461. 

V.  Clark,  473. 

V.  Evans,  503. 

V.  Gent,  171. 

V.  Hoskins,  83. 
Bowers  v.  Keesecher,  227. 
Bowery  Bank  Case,  467. 
Bowes  7^.  Foster,  541. 
Bowlsby  V.  Tompkins,  194. 
Bowman  v.  Houdlette,  342. 

V.  Tallman,  613. 
Bownes  v.  Weld,  115. 
Boyd,  Ex  parte,  94,  114,  221. 

V.  Anderson,  627. 

V.  Beck,  504. 

V.  Boyd,  224,  225. 

V.  De  La  Montagnie,  549,  550. 

V.  Dunlap,  272,  273. 

V.  Ellis,  327,  328. 

■V.  Hoyt,  198,  205,  227,  229. 

V.  Jones,  389. 

V.  Olvey,  183. 

V.  Turpin,  296. 
Boyle  V.  Zacharie,  405. 
Boynton  v.  Hubbard,  597. 

V.  Rawson,  236,  533. 
V.  Veazie,  367. 
Bozeman  v.  Browning,  691,  693. 
Bozman  v.  Draughan,  298. 


Brackett  v.  Harvey,  182,  449,  470,  472,  - 
473,  478,  479,  480. 
V.  Waite,  344. 
V.  Watkins,  75. 
Bradbury  7^.  Falmouth,  506. 
Bradford  v.  Bradford,  503. 
V.  Rice,  406. 
V.  Tappan,  541. 
Bradford's  Appeal,  420. 
Bradley  v.  Buford,  239,  324,  358, 
V.  Fisher,  579. 
V.  Fuller,  96. 
V.  Obear,  37. 
V.  Peixoto,  486. 
V.  Pratt,  647. 
V.  Ragsdale,  287,  296. 
Bradner,  Matter  of,  588. 
Bradshaw  v.  Yates,  551. 
Bradwell  v.  Weeks,  67. 
Brady,  Matter  of,  406. 
V.  Briscoe,  298. 
Brainerd  v.  Dunning,  436,  465. 
Braman  v.  Johnson,  45. 

V.  Stiles,  496. 
Bramhall  v.  Ferris,  53,  70,  491,  495.  -- 
Branch  Bank  v.  Crocheron,  598. 
Branch   Bank  of  Decatur  v.   Kinsey, 

3ii- 
Branch     Bank     of     Montgomery,   v. 

Hodges,  248. 
Brandon  v.  Aston,  491. 

V.  Robinson,  53,  486,  490,  495, 

497- 
Brantom  v.  Griffits,  372. 
Brashear  7/.  West,  439,  531. 
Brawn  v,  Keller,  351,  365. 
Breckenridge's   Heirs  v.  Ormsby,  567, 

578,  633,  637,  691. 
Breckinridge  v.  Taylor,  380. 
Bree  v.  Holbech,  403. 
Breed  v.  Judd,  646. 
V.  Pratt,  666. 
Brenan  v.  Burke,  56. 
Brennan  v.  Wilson,  341. 
Brett  V.  Carter,  475,  476. 
Brewer  v.  Connell,  424. 
Brewster  v.  Power,  87. 
Brice  v.  Lide,  380. 

V.  Myers,  30,  38,  344. 
Bridenbecker  v.  Lowell,  657. 
Bridge  V.  Eggleston,  383,  385. 
Bridges  v.  Pleasants,  572. 
Bridgewater  v.  Brooktield,  597. 
Briggs  V.  Beach,  302. 

V.  Boyd,  668,  670. 

V.  McCabe,  698. 

V.  Merrill  255,  272,  544. 

V.  Mitchell,  281,  417. 


He/erences'j        TABLE     OF    CASES.         ^areUpa£a. 


xvn 


Briggs  V.  Oliver,  113, 

V.  Parkman,  475. 
Brigham  v.  Luddington,  189. 

V.  Tillinghast,  6,  450,  451. 
Brinkerhoff  v.  Brown,   120,   140,    141, 

172,  173,  205. 
Brinks  v.  Heise,  288,  340, 
Brinley  v.  Spring,  337. 
Briscoe  v.  Bronaugh,  16. 
Bristol  Co.    Sav,  Bank  v.  Keavy,  381, 

395- 
Brittin  v.  Wilder,  639. 
Britton  v.  Lorenz,  427,  456. 
■  Broadway  Nat.  Bank  v.  Adams,  54,  71, 

488,  496. 
Brock  V.  Barnes,  663. 
Brockenbrough  v.  Brockenbrough,  482. 
Broderick's  Will,  522. 
Bromfield,  Ex  parte,  567. 
Bromley  v.  Goodrich,  565,  569,  619. 

V.  Holland,  707. 
Bronson  v.  Wilmington  N.  C.  Life  Ins. 

Co.,  200. 
Brooker  v.  Scott,  646. 
Brooks  V.  Caughran,  193. 

V.  Hanford,  429. 

V.  Hodgkinson,  616. 

V.  Martin,  593. 

V.  Peck,  175. 

V.  Powers,  354. 

V.  Schwerin,  310. 

V.  Stone,  81,  120,  127. 

V.  Wimer,  466. 
Brookville  Nat.  Bank  v.  Kimble,  410. 
Brotherhood's  Case,  688. 
Broughton  v.  Broughton,  554. 
Broun  v.  Hull,  623,  624. 
Brouwer  v.  Harbeck,  379. 
B rower  v.  Peabody,  503,  632. 
Brown,  Matter  of,  158. 

V.  Ashbough,  100. 

V.  Bank  of  Miss.,  137,  142. 

V.  Bates,  123,  173. 

V.  Bellows,  603. 

V.  Bronson,  1 10,  423. 

V.  Brown,  566,  620. 

V.  Chase,  268. 

V.  County  of  Buena  Vista,  400. 

V.  Dean,  7. 

V.  Fitz,  25. 

V.  Gilmore,  186. 

V.  Guthrie,  427,  480. 

V.  Hartford  Ins.  Co.,  690. 

V.  Haven,  226,  227. 

V.  Heathcote,  184. 

V.  Herr,  378. 

V.  Jodrell,  648. 

V.  Jones,  605. 


Brown  v.  Knox,  443. 

V.  Long,  1 1 5. 

V.  Mayor,  687. 

V.  McCune,  696. 

V.  Nichols,  93,  104,  105,  533. 

V.  Piatt,  481. 

V.  Rawlings,  307. 

V.  Ricketts,  171 

V.  Snell,  89,  108. 

V.  Spivey,  421. 

V.  Texas  C.  H.  Co.,  327. 

V.  Torrey,  665. 

V.  Volkening,  348. 

V.  Wel)b,  5X8. 

7'.  Williamson,  54,  492,  498. 
Brownell  v.  Curtis,  184,  240. 
Browning  v.  Bettis,  56,  94. 
V.  Hart,  184. 
V.  Morris,  550. 
Brownsword  v.  Edwards,  23. 
Bniggerman  v.  Hoerr,  146. 
Brumagim  v.  Tillinghast,  670. 
Brumfield  v.  Boutall,  697. 
Brummel  v.  Stockton,  358. 
Brundred  v.  Paterson  Machine  Co.,  380. 
Bruns  v.  Stewart  Mfg.  Co.,  270. 
Brunswick  v.  McCIay,  365. 
Bryan  v.  Baldwin,  662. 

V.  Spruill,  217. 
Bryans  v.  Taylor,  56. 
Bryant  v.  Bryant,  179. 

V.  Kelton,  16. 

V.  Richardson,  647. 

V.  Simoneau,  7,  12. 

V.  Young,  335. 
Buchanan  v.  Marsh,  81,  122. 

V.  Smith,  379. 
Buck  V.  Sherman,  7. 

V.  Voreis,  92.  298,  374,  397,  525. 
Buckingham  7/.  Walker,  172,  174. 
Buckley  7'.  Artcher.  630. 
V.  Wells,  415. 
V.  Wheeler,  75. 
Buckner  v.  Calcote,  224. 

V.  Stine,  379. 
Budd  7'.  Atkinson,  528. 
Buell  7'.  Cross,  582,  586. 
Buffington  7'.  Harvey,  2co. 
Buffum  V.  Jones,  341. 
Buford  V.  Keokuk  N.  L.  Packet  Co., 

171. 
Bugbee  7>.  Sargent,  227. 
Bulkley  7'.  BuHington,  336. 
Bull  7'.  Griswold,  372. 
Bullene  v.  Smith.  21. 
Bullis  7'.Montgomcry,  385. 
Bullitt  7'.  Taylor,  123,  540. 
Bullock  V.  Babcock,  643. 


XVIU 


Fe/ereneeij         TABLE     OF     CASES.  \_are  to M£'es. 


Bullock  V.  Narrott,  12. 

V.  Williams,  350,  470. 
Bulmer,  Ex  parte,  611. 

V.  Hunter,  418,  419. 
Bumpas  ?'.  Dotson,  342. 
Bunn  V.  Ahl,  22,  280,  298. 

V.  Bunn,  244. 
Burbank  v.  Wiley,  386. 
Burdell  v.  Burdell,  267. 
"^    Burdick  v.  Gill,  164,  290,  295,  326, 
V.  Jackson,  537, 
V.  Post,  21, 
Burdsall  v.  Waggoner,  219. 
^  Burgert  v.  Borchert,  6,  19,  21,  281,  358. 
Burgett  V.  Burgett,  171. 
Burke  v.  Adams,  171. 
V.  Burke,  341. 
V.  Smith,  397, 
Burkey  v.  Self,  344. 
Burlen  v.  Shannon,  291. 
Burley  v.  Russell,  645. 
Burlingame  v.  Burlingame,  604. 
Burlington  v.  Beasley,  607. 
Burnes  v.  Cade,  56. 
Burnett  v.  Gould,  114,  124,  136. 
'^  Burnham  v.  Brennan,  19,  355,  385,  507. 
Burns  v.  Morse,  118. 
Burr  V.  Beers,  67,  69. 
V.  Burton,  667. 
V.  Clement,  18,  457,  530. 
Burras  v.  Looker,  246. 
Burrill  v.  Smith,  625. 
Burrows  v.  Purple,  145,  177. 
^  Burt  ^/.  Keyes,  91,  in,  175,  216,  534. 
V.  Panjaud,  370, 
V.  Timmons,  49. 
Burton  v.  Boyd,  343. 

V.  Farinholt,  42,  47,  178. 
Burtus  V,  Tisdall,  3,  221. 
Burwell  v.  Fauber,  512. 
Bush  V.  Glover,  588. 

V.  Roberts,  384,  513,  515,  519. 
V.  Rogan,  541. 
Bush n ell  ■ZA  Bushnell,  179. 
V.  Eastman,  98. 
*"  Buswell  V.  Lincks,  140,  141,  231,261. 
Butcher  ?7.  Harrison,  182. 

V.  Stultz,  334. 
Butler  V.  Butler,  424. 

V.  Hildreth,  185,  545. 
V,  Lee,  603. 
V.  Moore,  37. 
V.  Mulvihili,  666. 
V.  Potter,  581. 
V.  Spann,  172,  226. 
V.  Watkins,  390. 
Buttertield  v.  Stanton,  412. 
Butterworth,  In  re,  161. 


Butts  V.  Peacock,  321. 

V.  Wood,  657. 
Byne  v.  Vivian,  lo"],  708. 
Byrne  v.  Becker,  283,  433. 
Byrod's  Appeal,  171. 

Cable  V.  Cooper,  572. 

Cadaval  v.  Collins,  669. 

Cadbury  v.  Nolen,  367. 

Cadman  v.  Horner,  594. 

Cadogan  v.  Kennett,  28,  30,  31,  35,  38, 

287,  360. 
Cadvvallader  v.  West,  551, 
Cady  V.  Whaling,  134. 
Cahill  V.  Bigelow,  307. 
Cahoon  v.  Marshall,  386. 
Caldwell  v.  Bartlett,  631. 

V.  Montgomery,  56. 
Callan  v.  Statham,  328,  329. 
Callanan  v.  Shaw,  268. 
Callis  V.  Waddy,  403. 
Cambridge  Valley  Bank  v.  Delano,  505, 

508,  521, 
Cameron  v.  Romele,  594. 
Camp  z^.  Thompson,  356. 
Campau  v.  Chene,  485. 
Campbell  v.  Chamberlain,  618. 

V.  Colorado  C.  &  I.  Co.,  531. 

V.  Dearborn,  555. 

V.  Fish,  54. 

V.  Foster,  70,  71,  484,  492.  - 

V.  Genet,  51,  93. 

V.  James,  62. 

V.  Jones,  200,  201. 

V.  Kuhn,  601,  ^o\.\ 

V.  Mackay,  226. 

V.  Smith,  67. 

V.  Walker,  587,  679. 

V.  Woodworth,  436,  454,  465. 
Campion  %>.  Cotton,  303. 
Candee  •y.  Lord,  118,  154. 
Canfield  v.  Fairbanks,  704. 
V.  Westcott,  621. 
Cannan  v.  Bryce,  595. 
Cannon  v.  Norton,  240. 
V.  Young,  381. 
Canton  v.  Dorchester,  543,  593. 
Cantrell,  In  re,  470,  473. 
Capron  v.  Porter,  350,  356. 
Card  V.  Walbridge,  182. 
Cardin  v.  Boyd,  627. 
Carew  v.  Rutherford,  669. 
Carey  v.  Giles,  38. 
Carhart  v.  Harshaw,  75. 
Caring  v.  Richmond,  480. 
Carl  V.  Ayers,  619. 

V.  Smith,  76,  344. 
Carlisle  v.  Tindall,  87,  140. 


Jie/erence/j         TABLE     OF     CASES.  \_are  to /a^-c-s. 


XIX 


Carnahan  ?'.  Allderdice,  641. 

V.  Wood,  386. 
Carney  v.  Carney,  386. 
Carpenter  v.  Buller,  466. 

V.  Carpenter,  164,  645,  703. 
V.  McClure,  156. 
V.  Murcn,  322,  384. 
_  V.  Roe,    151,    152,   157,   165, 

285,  416. 
V.  Soule,  664. 
V.  Talro,  413. 
Carr  7'.  Breese,  155,  158,  164,  165. 
V.  Carr,  334.  555. 
v.  Clough,  69S. 
^v.  Gale,  184. 
V.  Hilton,  187,  224,  403. 
V.  Van  Hoesen,  127,  128,  191. 
Carrell  v.  Potter,  638. 
Carrier  v.  Sears,  653. 
Carroll  7a  Aldrich,  172. 

V.  Hayward,  513,  515. 
Carson  v.  Marshall,  660. 
Carter  t/.  Bennett,  118,  376. 
V.  Carter,  491. 
V.  Castleberry,  89. 
V.  Flower,  625. 
""  V.  Grimshaw,  164,  284,  285,  298. 

V.  Gunnels,  12. 
V.  Kerr,  226. 
V.  Palmer,  663. 
V.  State,  667. 
V.  Wiliard,  354,  365. 
Cartwright  v.  Phoenix,  367. 
Cartwright's  Case,  280. 
Carver  v.  Peck,  61. 
Cary  v.  Hotailing,  630. 
Casanova  v.  Aregno,  408. 
Casborne  v.  Barsham,  663,  672. 
Case  7/.  Beauregard,  81,  83,  113,   114, 

IIS.  117. 133.  141. 30^- 

V.  Carroll,  658. 
V.  Gerrish,  536,  537. 
V.  Plielps,  no,  158,  161. 
Casey  v.  Janes,  453. 
Casey's  Trust,  In  re,  491. 
Cason  V.  Murray,  431. 
Cassell  V.  Williams,  76. 
Cassidy  v.  Meacham,  214. 
Castle  V.  Bader,  137. 

V.  Bullard,  316,  340,  382,  390. 

V.  Lewis,  128,  139. 

V.  Palmer,  25. 
Caswall,  Ex  parte,  63. 
Caswell  V.  Hill,  49. 
Catchings  z/.  Manlove,  121. 
Catlin  V.  Currier,  471,  473. 

V.  Doughty,  93. 

V.  Eagle  IJ.uik,  467. 


Caulfield  v.  Maguire,  491. 

Cavender  v.  Smith,  327. 

Cecil  V.  Salisbury,  683. 

Cecil  Bank  v.  Snively,  87. 

Central    Branch    U.    P.    R.R.    Co.   v. 

Smith,  607. 
Chace  v.  Chapin,  632. 
Chadwick  v.  Fonncr,  384. 
Chafee  v.  Fourth  Nat.  Bank,  100,  467. 
Chalfont  v.  Grant,  69. 
Challiss  V.  McCrum,  624. 
Chamberlain  v.  Stern,  362. 

V.  Twyne,  325,  326. 
Chambers  v.  Coleman,  566,  575. 
V.  Sallie,  76,  431. 
V.  Spencer,  344. 
Chandler  v.  ALison,  623,  624. 
7/.  Powers,  397. 
V.  Sanger,  669. 
V.  Simmons,    587,  690,  699, 

703. 
V.  Von  Roeder,  89. 
Chapin  v.  Pease,  541,  543,  545. 
V.  Shafer,  691,  694,  698. 
V.  Thompson,  397,  428. 
V.  Weed,  679. 
Chapman  v.  Bankers'  &  T.  Pub.  Co., 
45.  172. 
V.  County  of  Douglas,  605. 

606. 
V.  Dyett,  616,  618. 
Charlton  v.  Low,  503. 
Charter  Oak  Life  Ins.  Co.  ?'.  Brant,  422. 
Chase  v.  Chase,  145,  384. 
V.  Christianson,  581. 
V.  Flagg,  405. 
V.  Horton,  385. 
V.  Ralston,  367. 
V.  Redding,  230. 
V.  Searles,  84,  205,  227. 
V.  Walters,  283. 
Chautauque  Co.   Bank  r.   Risley.  54, 
129,  211,   248,  249,   250. 
251,  267. 
V.  White,  251. 
Cheatham  v.   Hawkins,   17.  363,  466, 

470.  475- 
Cheever  v.  Rutland  &  B.  R.R. Co.,  268. 
Chenerv  v.  Palmer,  335,  480. 
Cheshire  v.  Barrett,  684. 
Chess  7'.  Cliess,  681. 
Chester  7'.  Bower,  366. 
Chesterfield  v.  Jansscn,  22. 
Chew  7'.  Ellingwood,  467. 
Chewett  v.  Moran,  175.  209- 
Chickcring  v.  Hatch.  334. 
Child  V.  Brace,  120,  142. 
Chikls  V.  Connor.  165. 


XX 


JHe/erences']         TABLE     OF     CASPIS.  [are  to /ag'es. 


Childs  7A  Kendall,  47. 
Chittenden  7/.  Brewster,  124. 
Chophard  7/.  Bayard,  470. 
Chorpennins^'s  Appeal,  659. 
Choteau  7a  Jones,  178. 
Christy  v.  Clarke,  612. 

V,  Scotc,  370. 
Chubb  V.  Upton,  188. 
Church  V.  Ayers,  621. 

V.  Chapin,  344.  376. 
V.  Church,  525. 
V.  Muir,  543,  546. 
Churchill  v.  Wells,  166,  167. 
Church  of  the  Advent  v.  Farrow,  604. 
Cipperly  v.  Rhodes,  74. 
City  Bank  v.  Rome,  W.  &  O.  R.R.  Co., 
632. 
V.  Westbury,  480. 
City  Nat.  Bank  v.  Goodrich,  470. 

V.  Hamilton,  147, 162, 164,290, 
299,  385,  416. 
City  of  Newark  7k  Funk,  48,  56. 
Clafiin  v.  Frenkel,  100. 
V.  Gordon,  236. 
V.  Lenheim,  505. 
V.  Lisso,  250. 

V.  McDermott,  99,  114,  123. 
V.  Mess,  156. 
V.  Ostrom,  68. 
V.  Rosenberg,  358. 
V.  Smith,  242. 
Clagett  V.  Gibson,  192,  193. 
Clan  Ranald  v.  Wyckoff,  62. 
Clapp  V.  Dittman,  458. 
V.  Ely,  322. 
V.  Ingraham,  62. 
V.  Leatherbee,  193. 
Clark  V.  Anthony,  118,  376.        "" 
V.  Chamberlain,  283,  286. 
v.  Depew,  148,  336. 
V.  Douglass,  30,  118,  322,  376. 
V.  Finlon,  334. 
V.  Fisher,  651. 
V.  Fhnt,  632. 
V.  Foxcroft,  118,  191. 
V.  French,  155. 
•</.  Gibson,  306. 
7/.  Ho  ugh  am,  403. 
V.  Hyman,  475. 
V.  Killian,  6,  164,  166. 
V.  Krause,  232,  262,  275,  327,  340, 
342,  369,  375,  394,  423,  530- 
V.  Morrell,  289. 
V.  Pinney,  616,  619. 
v.  Robbins,  441. 
V.  Saline  Co.,  606. 
V.  Stanton,  455. 
V.  Van  Riemsdyk,  340. 


Clark  V.  Wise,  324,  325. 
Clarke  v.  Boorman's  Ex'rs,  400. 

V.  Dickson,  629,  706. 

V.  Roch.  &  S.  R  R.  Co.,  218. 

V.  While,  244,  393. 
Clarkson  v.  De  Peyster,  120,  126,  140, 

141.  173- 
Clary  v.  Frayer,  358. 
Clason  V.  Morris,  240. 
Clay  V.  Clay's  Heirs,  577,  578. 
V.  McCally,  301. 
V.  Williams,  547. 
Clayton  v.  Brown,  344. 
Clearwater  v.  Kimler,  651. 
Clemens  v.  Brillhart,  9. 
Clement  v.  Jones,  673. 

V.  Mattison,  667. 
Clements  v.  Moore,  26,  30,  31,  69,  244, . 
245,  253,  254,  271,  275, 
283,  340,  378,  385,  513, 
518,  520. 
V.  Yturria,  584,  608. 
Cleveland  v.  Chambliss,  133. 
Clews  V.  Kehr,  384. 
Clough  V.  Thompson,  184. 
Clow  V.  Woods,  357,  365,  367. 
Clute  V.  Fitch,  368. 

V.  Newkirk,  369. 
Coates  V.  Day,  208. 

V.  Gerlach,  320,  331. 
Coats  V.  Donnell,  467. 
Coburn  v.  Pickering,  19,  351,  355,  470. 

V.  Proctor,  515. 
Cochran  v.  Stewart,  629,  631. 
Cockell  V.  Taylor,  196. 
Cockshott  ^'.  Bennett,  535. 
Codrington  v.  Lloyd,  618. 
Coe  V.  Whitbeck,  121. 
Coffey  v.  Norwood,  208. 
Coffin  V.  Douglass,  465. 
Cohen  v.  Meyers,  84,  264, 

V.  N.  Y.  Mutual  Life  Ins.  Co., 

133- 

Cohn,  Matter  of,  455,  457. 

V.  Goldman,  216. 
Coiron  v.  Millaudon,  273,  275. 
Colbern  v.  Robinson,  341. 
Colby  V.  Peabody,  57. 
Cole  V.  Cole,  640. 

V.  La  Grange,  607. 

V.  Malcolm,  297. 

V.  McGlathry,  224. 

V.  Tyler,   14,   129,   151,  248,  249, 
251,  267. 

V.  Varner,  153. 

V.  White,  351,  360,  361. 
Coleman  7'.  Burr,   10,  14,  15,  18,  292, 

299,  310,  436,  449,  523. 


Jie/erences']         TABLE     OF     CASES.  [are  to ^a^es. 


XXI 


Coleman  v.  Mansfield,' 572. 

V.  McMurdo,  706.^ 
Coley  7/.  Coley,  309,  321,  342. 
Colgan  V.  Jones,  272. 
Colgate  z^  Colgate,  660,  679. 
Colie  V.  Jamison,  183. 
Collier  v.  Davis,  438. 
Collingridge  v.  Paxton,  49. 
Collins  V.  Blantern,  592,  597,  708. 

V.  Myers,  356,  470,  475. 

V.  Nelson,  407. 

V.  Shaffer,  107. 

V.  Taggart,  369. 
Collinson    v.  Jackson,    118,    233,   250, 

307.  376. 
Collumb  V.  Read,  51,  254,  501, 
Colman  v.  Dixon,  80. 
V.  Sarrel,  yoy. 
Colombine  7a  Penhall,  418. 
Columbia  Bank  v.  Jacobs,  335. 
Colwell  V.  Peden,  669. 
Combs  V.  Scott,  674. 

V.  Watson,  131. 
Comegys  v.  Vasse,  183. 
Comer  v.  Allen,  303. 
Comey  v.  Pickering,  501. 
Commercial  Bank  t.  Meach,  121. 
Commonwealth  7'.  Duffield,  63. 
V.  Evans,  291. 
V.  Shuman,  696. 
Comstock  V.  Rayford,  338. 
Conard  v.  Atlantic  Ins.  Co.,  309. 
Cone  V.  Ham.ilton,  102. 
Confer  v.  McNeal,  389. 
Conger  v.  Ring,  679. 
Conkey  v.  Bond,  660. 
Conklin  v.  Thompson,  643. 
Conkling  v.  Shelley,  478.  ^ 

Conley  v.  Nailor,  651,  670. 
Connah  v.  Sedgwick,  457. 
Conner  z'.  Henderson,  705. 
Connoly  at/s.  Hull,  646. 
Conover  ?/.  Beckett,  378. 
Conrad  v.  Abbott,  673. 

V.  Lane,  645,  696. 
Conro  V.   Port   Henry   Iron   Co.,    105, 

173.  175- 
Conroe  v.  Birdsall,  640. 
Consolidated  Fruit  Jar  Co.  v.  Bellaire 

Stamping  Co.,  675. 
Converse  ?'.  Converse,  651. 

V.  Hartley,  167. 
Conway,  Ex  parte,  6,  7,  467. 

V.  Edwards,  356,  367. 
Cook  V.  Berlin  Woolen  Mills,  660. 
V.  City  of  Boston,  668. 
V.  Doggett,  602. 
V.  Holbrook,  419, 


Cook  V.  Hopper,  375.  " 

V.  Johnson,  90,  144,  147. 
V.  Ligon,  146. 
V.  Lindsey,  224. 
V.  Mason,  382. 
V.  Moffat,  405. 
V.  Scott,  76. 
V.  Swan,  108. 
V.  Toumbs,  633. 
V.  Tullis,  184,  300,  673,  675.  ^- 
Cooke  V.  Bangs,  579. 

V.  Cooke,  42,  145,  176,  283,  377, 
390. 
Coolidge  7/.  Heneky,  517. 

V.  Melvin,  286,  378,  470,  478, 
482. 
Cooney  v.  Cooney,  73,  94,  186. 
Cooper  V.  Galbraith,  9, 
V.  Gunn,  61. 
V.  Joel,  575. 
V.  Reynolds,  582. 
V.  State,  646. 
V.  Wyatt,  491. 
Copis  V.  Middleton,  9,  150,  204,  302.  -^ 
Copp  V.  McDugall,  624. 
Corby  v.  Bean,  92. 
Corder  v.  Williams,  193. 
Cordes  v.  Straszer,  321. 
Corey  v.  Burton,  639. 
V.  Greene,  87. 
Cork  &  Youghal  Ry.  Co.,  In  re,  608. 
Corlett  V.  Radcliffe,  35,  329,  330. 
Cornell,  Matter  of,  429,  453. 

V.   Radway,   6,   79,    140,    201, 
2q8,  209. 
Corning  v.  McCullough,  212. 

V.  White,  104,  533,  534. 
Cornish  v.  Dews,  434. 
Cornwell  v.  Lee,  226. 
Corpe  V.  Overton,  691. 
Cortland  Co.  v.  Herkimer  Co.,  388. 
Coster  V.  Mayor,  etc.,  67. 
Costigan  v.  Hawkins,  624. 
Cottingham,  Succession  of,  25. 
Cottman  v.  Grace,  572. 
Cotton  V.  Gregory.  600. 

V.  Hart,  518. 
Cottrell  V.  Moody.  83. 
Cottreli's  Appeal,  276. 
County  of  Morgan  v,  .Alien,  107. 
County  of  Warren  ?'.  Marcy,  235. 
Courtenay  ?'.  Wright,  422. 
Coutts  V.  Acworth,  64. 
Covanhovan  ?'.  Hart,  21,  288. 
Covington  v.  Ingram,  581. 
Cowee  V.  Cornell,  6,  664. 
Cowell  V.  Springs  Co.,  488. 
Cowen  V.  \'illage  of  West  Troy,  687. 


XXII 


/^c/ercuc-c-s^        TABLE     OF    CASES.         [^^ire  io  Mg-^s. 


Cowling  7'.  Estes,  314,  315,  341,  518. 
Cox  V.  Clift,  708. 
V.  Fraley,  336. 
V.  Miller,  288. 
7'.  Shropshire,  76. 
V.  Wilder,  25,  75,  425. 
Coyne  v.  Weaver,  436,  454,  465. 
Craft  V.  Bloom,  466. 
Cragin  v.  Carmichael,  134. 
Craig  7/.  Fowler,  317. 
Craig's  Appeal,  371. 
Craighead  v.  Peterson,  674. 
Cram  v.  Mitchell,  456,  457. 
Cramer  v.  Blood,  253. 

V.  Reford,  161,  420. 
Crandall,  Petition  of,  614. 
V.  Brown,  361. 
v.  Lincoln,  107, 
Crane  7\  Bunnell,  92. 
V.  Stickles,  302. 
Cranson  7/.  Smith,  loi. 
Cranstown  7v.  Johnston,  240. 
Crapo  V.  Kelly,  467. 
Crapster  v.  Williams,  341. 
Crary  v.  Goodman,  25. 
Craven  v.  Brady,  491. 
Craver  7^.  Miller,  327. 
Crawford  7^.  Andrews,  380. 
V.  Beard,  271. 
V.  Berry,  381. 

V.  Kirksey,    6,    7,    147,    148, 
231,  240,  291,  328,  335, 

339.  354,  356,  53°- 
V.  Lehr,  178,  541. 
V.  Logan,  166,  418. 
V.  Lundy,  485. 
V.  Ross,  269. 
V.  Scovell,  700,  702,  704. 
Creath  v.  Sims,  594. 
Credland  v.  Potter,  25. 
Crepps  V.  Durden,  614. 
Cresinger  v.  Welch,  693,  703. 
Cresswell  7'.  McCaig,  307. 
Creveling  v.  Fritts,  657,  660. 
Crim  V.  Walker,  113,  123. 
Crippen  v.  Hudson,  119,  120,  121,  126, 

136,  J40,  215. 
Crocker  7/.  Bellangee,  555,  566. 

V.  Craig,  181. 
Crockett  v.  Phinney,  272. 
Croft  V.  Arthur,  418. 

V.  Town  send,  4. 
Croghan  7'.  Livingston,  639. 
Crompton  v.  Anthony,  115,  133. 
Crook  V.  Jadis,  517. 

V.  Rindskopf,  307,  308,  392,  463, 
466. 
Crooks  V.  Stuart,  351. 


Cropsey  7^  McKinney,  114. 
Crosby  v.  Baker,  76. 

V.  Taylor,  278. 
Cross  V.  Andrews,  648. 

V.  Brown,  179,  181. 
V.  Truesdale,  67. 
Cresswell  v.  People,  567. 
Crouse  v.  Frothingham,    54,    55,    185^ — - 

252,  378. 
Crow  7/.  Andrews,  7. 

V.  Beardsley,  19,  21. 
V.  Coons,  405. 

V.  Red  River  Co.  Bank,  479. 
Crowninshield  v.  Kittridge,  533,  545. 
Crumbaugh  v.  Kugler,  344. 
Crummen  v.  Bennet,  23,  73. 
Cubbedge  7'.  Adams,  81. 
Cumberland  Coal  Co.  v.  Sherman,  660, 

675. 
Cumming  v.  Fryer,  38. 

V.  Mayor  of  Brooklyn,  260. 
Cummings  v.  McCullough,  297. 
V.  Powell,  601,  693. 
Cummins  v.  Griggs,  358. 
V.  Hurlbutt,  10. 
Cundy  v.  Marriott,  623. 
Cunningham  v.  Dwyer,  6,  312. 

V.  Freeborn,  18,  244,  293,  •s^ 

437.  449- 
Cunningham's  Estate,  665. 
Curd  V.  Lackland,  84, 
Currie  v.  Hart,  457. 

V.  Misa,  296. 
Currier  v.  Sutherland,  25,  76. 
Curry  v.  Lloyd,  92. 

V.  McCauley,  332. 
Curtin  v.  Patten,  641,  683. 
Curtis  V.  Fox,  152,  163,  260. 

V.  Gokey,  599. 

V.  Leavitt,  30,  284,  442,  601.  — 

V.  Moore,  389. 

V.  Valiton,  283. 

V.  Whipple,  607. 

V.  Wortsman,  411. 
Cushwa  V.  Cushwa,  547,  554. 
Cutler  V.  Tuttle,  543. 
Cutter  7/.  Copeland,  361,  362. 

V.  Griswold,  87. 
Cutting,  Ex  pari c,  376. 

V.  Cutting,  63,  64,  65,  "JO,  492.  — ' 
V.  Jackson,  355. 
Cuyler  7/.  Ensworth,  177. 

V.  McCartney,  3S5,  388,  3S9,  432,  — 
455- 

Dahlman  v.  Jacobs,  114. 
Dale  V.  Roosevelt,  558. 
Dalglish  V.  McCarthy,  289. 


J?e/ercf!ces'\         TABLE     OF     CASES.  \_aretoM£-es. 


XXlll 


Dalton  V.  Currier,  461. 
Damon  v.  Bryant,  408. 
Dana  ^'.  Haskell,  141. 
V.  Stearns,  703. 
Danbury  7/.  Robinson,  501. 
Danby  v.  Sharp,  340,  345,  382. 
Danforth  v.  Beattie,  25. 

V.  Dart,  507,  517. 
Daniel  v.  Vaccaro,  7. 
Daniels  v.  Eldredge,  495. 
V.  Fielding,  619. 
V.  McGinnis,  388. 
V.  Tearney,  584. 
Dannmeyer  v.  Coleman,  521. 
Danzey  v.  Smith,  181. 
Darby  v.  Cabanne,  652. 
Dargan  v.  Waring,  90,  140. 
Darnell  7/.  Rowland,  651. 
Darvill  v.  Terry,  289. 
Dashiell  v.  Attorney-General,  572. 
Davenport  v.  Cummings,  21. 
V.  Foulke,  470. 
V.  Kelly,  93,  236. 
V.  Mason,  603. 
V.  Wright,  321,  322. 
David  V.  Birchard,  517,  520,  532. 
Davidson  v.  Graves,  305,  418. 
V.  Jones,  312. 
V.  Little,  327. 
Davies  v.  Grindley,  651. 
Davis  V.  Bigler,  350,  357,  364. 
V.  Bruns,  123. 
V.  Calvert,  670. 
Ty.  Clayton,  240. 
V.  Davis,  423. 
V.  Dean,  123. 
V.  Dudley,  638. 
V.  Fredericks,  415. 
V.  Graves,  253,  546. 
V.  Helbig,  581. 
V.  Leopold,  271,  272.  533. 
V.  Mc Kinney,  87. 
V.  Old  Colony  R.R.  Co.,  601,608. 
V.  Ransom,  470. 
V.  Sharron,  56. 
V.  Stern,  384. 
V.  Swanson,  178,  541,  545. 
V.  Turner,  30,  349,  351,  352,  354, 
356,  359.  360,  362. 
-  Davoue  v.  Fanning,  657,  660,  679. 
Davy  7>.  Garrett.  217. 
Dawes  v.  Cope,  357. 
Dawley  v.  Brown,  25,  112,  251. 
Dawson  v.  Coffey,  1 13. 
V.  Nivcr,  326. 
-Day  7'.  Bach,  588,  614,616,  617. 
V.  Cole.  328. 
V.  Cooley,  42,  156,  167,  182,  184. 


Day  V.  N.  Y.  Central  R.R.  Co.,  601,  602, 
603. 

V.  Sharp,  575,  582. 

V.  Washburn,  534. 
Dayton  v.  Borst,  188,  190. 
Dean,  Matter  of,  453. 

V.  Negley,  23,  306. 
7-'.  Skinner,  378. 
De  Armond  v.  De  Armond,  423. 
Debenham  v.  Ox,  597. 
De  Camp  v.  Alward,  467. 
De  Caters  v.  De  Chaumont,  679. 
Decker  T",  Decker,  87,  118. 
Deering  v.  Tucker,  485. 

V.  Winchelsea,  610. 
De  Forest  v.  Bacon,  446. 
Degnan  v.  Farr,  410. 
Degraw  7^.  Clason,  71. 
De  Groot  v.  Van  Duzer,  596. 
Dehorty  v.  Jones,  485. 
Delafield  v.  Parish,  650. 
Delano  v.  Blake,  684. 
Delashmut  v.  Trau,  75. 
Delaware  v.  Ensign,  328,  329,  480. 
Delaware  Bank  v.  Jarvis,  624. 
Demarest  7/.  Terhune,  342,  343. 
Demeritt  v.  Miles,  382. 
Dempsey  v.  Gardner,  354,  365. 
Denike  v.  N.  Y.  &  R.  Lime  &  C.  Co., 

335- 
Denman  v.  Campbell,  380. 
Denn  d.  Inskeep  7'.  Lecony,  571,  620. 
Dennett  7'.  Dennett,  650. 
Dennick  v.  Railroad  Co.,  213. 
Dennis  v.  Arnold,  103. 
Dennis'  Case,  291. 
Densmore  v.  Tomer,  10,  356. 
Dent  v.  Bennett,  672. 
Department  of  Parks,  ALatter  of,  25. 
De  Peyster  v.  Michael,  486. 
Deposit  Nat.  Bank  7'.  Wickham,  533. 
Dequindre  7/.  Williams,  581. 
Derby  v.  Weyrich.  73.  75,  441. 
De  Ruyter  7a  St.  Peter's  Church,  467. 
Des  Brisay  7'.  Hogan,  117. 
De  Silver's  Estate,  Matter  of,  654. 
Des  Moines  &  M.  K.  Co.  v.  Alley,  220. 
Deutsch  7'.  Reilly,  128. 
Devoe  7/.  Brandt,  629. 
Devol  V.  Mcintosh.  67,  68. 
Devoll  V.  Brownell,  244. 
Dewey  7'.  Kelton,  69. 

V.  Long,  87,  148. 

V.  Moyt-r,    118,    154,    172,    174,^ 
182.  183,388. 
Dewing  v.  Durant,  103. 

7'.  Perdicaries.    569,  570,  573,.. 
574.  584.  586,  592,  599- 


XXIV 


J7e/ere>tce/j         TABLE     OF     CASES.  [are  io MS'". 


De  Witt  V.  Van  Sickle,  512,  518,  520. 
"^  DeWolf  7/.  Sprague  Mfg.  Co.,  226,  229, 

431,  446,  452. 
■^  Dexter  7A  Hall,  567,  632,  634, 640. 
Dick  V.  Hamilton,  50,  164,  238. 
V.  Lindsay,  371. 
V.  Pitchford,  53,  497. 
Dickerson  v.  Benham,  462. 

V.  Tillinghast,  504. 
Dickinson  v.  Burreli,  196. 
Disfendorf  7/.  Spraker,  171. 
Dietz  V.  Atwood,  49. 
Diffenderfer  ?7.  Fisher,  75. 
Dill  7'.  Bowen,  704. 
Dimmock  v.  Bixby,  84,  227. 
Dimock  v.  Revere  Copper  Co.,  406. 
Dimon  v.  Delmonico,  429. 
V.  Hazard,  308,454. 
Divver  z/.  McLaughlin,  321. 
Dix  V.  Briggs,  121. 

V.  Van  Wyck,  195. 
Dixon  V.  Hill,  502. 

V.  Merritt,  638,  693. 
V.  Watkins,  582. 
Doak  V.  Brubaker,  356,  366,  367. 
Dobson  V.  Pearce,  376. 

V.  Racey,  657,  688. 
Dockray  v.  Mason,  90,  201,  208. 
Dodd  7'.  Adams,  5f. 

V.  Levy,  113,  116,  134. 
V.  McCravv,  292,  344. 
Dodge  7/.  Freedman's  Sav.  &  Trust  Co., 

553- 
V.  Griswold,  1 28. 
7/.  Pyrolusite   Manganese  Co., 

265. 
V.  Wellman,  334. 
Doe(^.  Grimsby)  v.  Bali,  182. 

(d.  Bryan)  v.  Bancks,  622. 

(d.  Nash)  V.  Birch,  621. 

(d.  Lyster)  7^.  Goldvvin,  675. 

V.  Harter,  586,  613. 

(d.  Abbott)  V.  Hurd,  540. 

(d.  Mclntyre)  v.  Mclntyre,  485. 

(d.  Davis)  v.  McKinney,  147. 

{d.  Lloyd)  V.  Powell,  621. 

{d.  Thomas)  v.  Roberts,  681. 

V.  Routledge,  302. 

(d.  Bland)  v.  Smith,  408. 

(d.  Mann)  v.  Walters,  675. 

V.  West,  370. 
Doebler's  Appeal,  485. 
Doerder  v.  Schmidt,  215. 
Dolin  7'.  Gardner,  311. 
Doll  V.  Kathman,  705. 
DoUard  v.  Taylor,  94. 
Dominguez  7'.  Dominguez,  398. 
Dommick  v.  Michael,  690. 


Donaldson  7/.  Farwell,  184,  630,  632. 
Donley  v.  McKiernan,  214,  375. 
Donnebaum  7a  Tinslcy,  299. 
Donnelly  v.  West,  187. 
Donovan  7/.  Dunning,  20,  27,  84,  205,' 
482. 
V.  Finn,  34,  56. 
Doolin  7/.  Ward,  596. 
Doran  v.  Simpson,  125. 
Dorr  7/.  Fisher,  706. 
Dorrell  v.  Hastings,  647. 
Dorsett  v.  Dorsett,  491. 
Dorsey  v.  Smithson,  184. 
Dortic  V.  Dugas,  81. 
Dougherty  v.  Cooper,  379,  502. 
Doughten  v.  Gray,  327. 
Douglass  V.  Huston,  534. 
Douthitt  V.  Applegate,  328. 
Douw  7/.  Shelden,  45. 
Dow  V.  Berry,  52. 

V.  Platner,  51. 

V.  Sanborn,  630. 
Dowell  V.  Applegate,  310. 
Down  V.  McGourkey,  665, 
Downer  v.  Rowell,  247. 
Downing  7A  Still,  613. 
Dows  7/.  McMichael,  181. 

V.  Rush,  630. 
Doyle  V.  Peckham,  184. 
Dozier  v.  Matson,  407. 
Drake  v.  Ramsay,  693,  695. 

V.  Rice,  33,  36,  42,  48,  55,  86, 

99- 
Drennan  v.  Douglas,  599. 
Dresher  v.  Corson,  325. 
Dreutzer  v.  Bell,  25,  72. 
Drexel  v.  Berney,  196. 
Drexler  v.  Tyrrell,  536. 
Drinkwater  v.  Drinkwater,  545. 
Drummond  v.  Commissioners,  107. 

7>.  Couse,  283. 
Drury  v.  Cross,  275. 
7/.  Drury,  697. 
7/.  Roberts,  269. 
Drysdale  7'.  Piggott,  422. 
Dubois  V.  Cassidy,  93. 
Dudley  7/.  Dan  forth,  284,  289,  432. 
Duffield  V.  Morris,  665. 
Duffin  V.  Furness,  33. 
Dugan  V.  Massey,  425. 
V.  Trisler,  145. 
V.  Vattier,  185. 
Dummer  v.  Corporation  of  Chippen- 
ham, 241. 
Dunaway  v.  Robertson,  592,  593,  594. 
Duncan  7/.  Custard,  250. 
7'.  Roselle,  420. 
V.  Worrall,  707. 


Se/erences'j        TABLE     OF    CASES.         [are  to/a^fs. 


XXV 


Duncan's  Appeal,  424. 

Duncomb  t.  N.  Y.,  H.  &  N.  R.R.  Co., 

657,  660,  662. 
Dundas  v.  Bowler,  1 10. 
V.  Dutens,  55. 
Dunham  v.  Byrnes,  185. 
V.  Cox,  215. 

V.  Waterman,   17,    252,  437, 
446, 448,  449,  479. 
Dunlap'j'.  Bournonville,  342. 

f.  Hawkins,  149,  150,  165,299. 
T.  Mitchell,  659. 
Dunlevy  •t'.  Tallmadge,  90,  1 14,  1 1 5, 1 19, 

120. 
Dunlop  V.  Richards,  661. 
Dunn  V.  Chambers,  245. 
V.  Dunn,  150,  587. 
z'.  Record,  663. 
Dunnage  v.  White,  655. 
Dunning-  ■?/.  Mead,  470. 
Dunphy  v.  Kleinsmith,   80,   258,  260, 

320. 
Dunton  v.  Brown,  636,  639,  691,  693, 

69^.- 
Durand  v.  Hankerson,  207. 
Duress  v.  Horneffer,  413. 
Durian  v.  Central  Verein,  46,  422. 
Dutcher  7a  Swartvvood,  480,  481. 
Dutton  z'.  Jackson,  192. 
V.  Willner,  662. 
Duvall  7'.  Rollins,  75. 
Dwight  7'.  Germania  Life  Ins.  Co.,  242. 
Dyer  7/.  Homer,  541,  545,  587. 
Dygerf   z'.    Remerschnider,    147,    152, 
153.  299.  3°'.  4'8,  421. 

Eadie  v.  Slimmon,  46,  672. 
Eads  7'.  Mason,  257. 

7'.  Tlionipson,  422. 
Eagle  Fire  Co.  zk  Lent,  642. 
Earl  of  Chesterfield  v.  Janssen,  80, 
Earl  of  Mountcashell  v.  Barber,  675. 
Early  v.  Owens,  147. 
Easterly  Z'.  Keney,  494,  495. 
Eastham  z'.  Roundtree,  592,  593,  594. 
Easton  v.  Calendar,  581. 
Eastwood  ZK  Brown,  352. 
Easum  7/.  Pirtle,  328. 
Eaton  z'.  Badger,  582,  586. 
V.  Eaton,  647,  654. 
V.  Rerry,  555. 
Eaves,  /;/  re,  579. 
Ecker  ?'.  Lafferty.  168. 
Eckert  7/.  Flowry,  670. 
Eckstein  Z'.  Frank,  643. 
Eddy  7/.  Baldwin,  379. 

V.  Capron,  596. 
Ede  V.  Knowles,  49,  154. 


Edelsten  v.  Vick,  61. 

Edgell  V.  Hart,  293.  373,  470,  472,  473. 

V.  Haywood,  104. 
Edgington's  Trusts,  J^e,  491. 
Edmeston  z'.  Lyde,  42,  47,  48,  56,  106, 

173.  198. 
Edmonson  v.  Meacham,  25. 
Edmonston  z'.  McLcud,  93,  533. 
Edmunds  v.  Mister,  104,  375. 
Edson  V.  Cummings,  1 18. 

V.  Hayden,  420. 
Edwards  7/.  Currier,  292,  294. 

V.  Davenport,  568,  634. 
V.  Entwisle,  50,  166,420,421. 
V.  Harben,  352,  470. 
V.  McGee,  146. 
V.  Meyrick,  663. 
V.  Mitchell,  430. 
V.  Stinson,  28. 
Egery  v.  Johnson,  5,  483,  500,  502,  513. 
Ehrisman  v.  Roberts,  16,  441. 
Eicks  7A  Copeland,  455. 
Eigieberger  z'.  Kibk-r,  148,  398. 
Ekin  7'.  McCracken,  649. 
Eldridge  7/.  Philiipson,  530. 
Elias  V.  Farley,  54,  441. 
Eliot  V.  Mercliants'  Exchange,  58,  59. 
Elizabethtown    Sav.    Inst.   v.   Gerber, 

116. 
EUett  V.  Newman,  264. 
Ellington  v.  Currie,  543,  593. 
Elliot  V.  Ince,  648. 
Elliott  V.  Bcntly,  413,  420. 
z'.  Gurr,  611. 
V.  Stoddard,  3S4. 
Elliott's  Exrs.'  Appeal,  422. 
Ellis  V.  Grooms,  627. 
V.  Higgins,  541. 
V.  Hornnan,  507. 
V.  McHenrv,  406. 
V.  Whiilock,  38. 
Ellsworth  7/.  Cook,  54. 

V.  Pheljis,  479. 
Ellwood  V.  Northrup,  656. 
Elme  7'.  Da  Costa,  196. 
Elmendorf  7'.  Taylor,  401,  405. 
Elmer  z>.  Welch,  357. 
Elmore  v.  Spear,  172. 
Elston  7'.  Jasper,  653,  654. 
Elwell  7/.  Johnson,  214. 

7'.  Martin,  644. 
Ely  7>.  Cooke,  466. 
V.  Horine,  659. 
Emans  v.  Emans,  175. 
Embry  7'.  Palmer,  400. 
Embury  v.  Klcmm,  343. 
Emerson  z>.  Badger,  59. 

v.  Bemis,  19,  148,  421. 


XXVI 


Ke/ere»ces'j         TABLE     OF     CASES.         [^are  ic /a^es. 


Emerson  v.  Newbury,  673. 

V.  Senter,  445,  446. 
Emery  v.  Van  Syckel,  491. 

V.  Yount,  215. 
Emigrant  Ind.  Sav.  Bank?/. Roche,  465. 
Emma  Silver  Min.  Co.  v.  Grant,  14. 
Emmerich  v.  Hefferan,  299. 
Emmons  7a  Bradley,  335. 
Emends  v.  Termehr,  327. 
Enders  v.  Svvayne,  321. 
English  7/.  People,  607. 
Engraham  v.  Pate,  24,  316,  342,  343, 

389- 
Enos  V.  Tuttle,  387. 
Erb  V.  Cole,  6,  7. 
Erben  v.  Lorillard,  602. 
Erfort  v.  Consalus,  211,  393. 
Erickson  v.  Quinn,  loi,  102,  224,  225, 

402. 
Estabrook  v.  Messersmith,  184. 
Estes,  In  re,  250. 

V.  Rowland,  178. 

V.  Reynolds,  705. 

V  Wilcox,    124,    125,    132,    136, 
140,  I  So. 
Estwick  V.  Caillaud,  18,  530. 
Esty  V.  Long,  1 18. 
Eureka  Basin  W.  &  M.  Co.,  Matter  of, 

607. 
Evans  v.  Bickneli,  240. 

V.  Gee,  623. 

V.  Hamilton,  150. 

V.  Hill,  1 14,  132,  140. 

V.  Jones,  326. 

V.  Lewis,  145,  193. 

V.  Rugee,  420. 

V.  Smallcombe,  688. 

V.  Warner,  462. 
Everett  v.  Wilkins,  691. 
Everingham  v.  Vanderbilt,  252. 
Everitt  v.  Everitt,  64. 
Every  v.  Edgerton,  369. 
Evroy  v.  Nicholas,  695. 
Ewell  V.  Daggs.  622. 
Ewen  V.  Bannerman,  572. 
Ewing  7^.  Handley,  179. 

V.  Runkle,  283. 
Exchange  Bank  of  St.  L.  v.  Rice,  68. 
Eyre  v.  Potter,  232,  262. 
Eyston,  Ex  parte,  491. 

Fagan  v.  Harrison.  675. 
Faikney  v.  Revnous,  609. 
Fairbanks  v.  Antrim,  38. 
Fairfield  v.  Baldwin,  322. 
Fairfield  Bridge  Co.  v.  Nye,  355. 
Fake  v.  Smith,  624. 
Falconer  7/.  Freeman,  12S,  139. 


Falkner  v.  Leith,  311. 

Fanshawe  v.  Lane,  445. 

Fargo  V.  Ladd,  545. 

Farley  v.  Carpenter,  508,  510,  512. 

Farmer  v.  Calvert.  10. 

V.  Dean,  679. 
Farmers'  Bank  v.  Douglass,  298,  482, 
519. 
V.  Vanmeter,  625. 
Farmers'  &  M.  Nat.  Bank  v.  King,  69. 
Farnam  v.  Brooks,  651. 
Earned  v.  Harris,  123. 
Farnham  v.  Campbell,  51. 
Farnsworth  v.  Bell,  193. 

V.  Strasler.  120. 
V.  Wood,  188. 
Farr  v.  Sumner,  698. 
Farrar  v.  Haselden,  135. 
Farrow  v.  Hayes,  15,  466. 
Fassit  V.  Phillips,  46. 
Faucett  v.  Faucett,  679. 
Fearn  v.  Ward,  144. 
Feigley  v.  Feigley,  9,  176,  192. 
Feise  v.  Randall,  536. 
Felch  V.  Bugbee,  405. 
Fellows  V.  Emperor,  306. 

V.  Fellows.  12,  198,  205,  228.  ~ 

V.  Lewis,  24. 

V.  School  District,  667. 

V.  Smith,  147,  148. 
Felton  V.  Wadsworth,  322. 
Fenelon  v.  Hogoboom,  413. 
Fenner  v.  Dickey,  23,  535. 
Feret  v.  Hill,  629. 
Ferguson  v.  Bell,  638. 

V.  Bobo,  114,  214. 
V.  Dent,  III. 
V.  Hillman,  255,  256. 
V.  Kumler,  75. 
V.  Spear,  530. 
Ferlat  v.  Gojon,  61 1. 
Ferris  v.  Irons,  390. 
Fessenden  v.  W^oods,  186. 
Fetrow  v.  Wiseman,  642. 
Fetter  v.  Cirode,  322. 
Feurt  V.  Rowell,  470. 
Fick  V.  MulhoUand,  10. 
Fiedler  v.  Darrin,  293,  396. 
Field  V.  Chapman,  83. 
V.  Holland,  240. 
V.  Sands,  186,  533. 
Fifield  V.  Gaston,  283. 
Filer  7/.  N.  Y.  Central  R.R.  Co.,  310. 
Filley  v.  Register,  344. 
Finch  V.  Houghton,  268. 
Fincke  v.  Funke,  187. 
Fink  V.  Patterson,  133. 
Finnin  v.  Malloy,  73. 


/ie/ercncesj         TABLE     OF     CASES.  \^.iKe /o />a£^es.  XXVll 


Firemen's  Charitable  Assoc,  v.  Berg- 

haus,  681. 
First  Mass.  Turnp.  Co.  v.  Field,  403. 
First  Nat.  Bank  v.  Anderson,  481. 
V.  Bf-rtschy,  272,  287. 
V.  Cooper,  182.  183. 
V.  Cummins,  276,  278. 
V.  Gage,  265. 
V.  Holmes,  456. 
V.  Hosmer,  104,  233. 
V.  Hughes,  459. 
V.  Irons,  8. 
V.  Knowles,  339. 
Fischer  7/.  Langbein,  588. 
Fish  V.  Clifford,  355. 
V.  French,  575. 
Fishel  7K  Ireland,  329.  T 

Fisher,  Il.x  parte,  537. 

V.  Andrews,  1 16.  ^ 

V.  Basselt,  196. 
V.  Bishop,  551. 
V.  Boody,  262. 
V.  Dabbs,  574. 
V.  Henderson,  27,482. 
V.  Herron,  342. 
V.  Lewis,  162. 
V.  Mowbray,  642. 
V.  Shelver,  328,  342,  411. 
V.  Ta>lor,  493,  498. 
V.  Willard,  673. 
Fisk  V.  Fisk,  689. 

V.  Sarber,  659. 
Fiske  V.  Foster,  405. 
Fitch  V.  Burk,  367. 
V.  Smith,  236. 
Fitts  7'.  Hall,  703. 
Fitzburgh  v.  Everingliam,  264. 
Fitzhugh  V.  Wilcox,  653. 
Fitzsimmons  v.  Alien,  603. 
Fivaz  V.  Nic  bolls,  592,  597, 
Flagg  V.  Mann,  239,  507. 
V.  Willington,  393. 
Flanagan  v.  Wood,  366. 
Flash  V.  Conn,  212. 

V.  Wilkerson,  277. 
Fleetwood  ?'.  City  of  New  York,  670. 
Fleischer  v.  Dignon,  342. 
Fleming  v.  Buchanan.  63. 

V.  Slocum,  8. 
Fletcher  v.  Ashley,  424. 

7'.  Fletcht-r,  547,  549. 
V.  Hohiies,  1 14,  182. 
V.  Peck,  502. 
V.  Powers,  475. 
V.  Stone,  578. 
Flewellen  v.  Crane,  216. 
Fliess  V.  Buckley,  98. 
Flinn  v.  Powers,  684. 


Flint  V.  Clinton  County,  467. 

V.  Warren,  572. 
Florance  v.  Adams,  661. 
Florence  S.  M.  Co.  v.  Zeigler,  28,  290. 
Flower  v.  Cornish,  184. 
Flynn  v.  Allen,  627. 
Fogg  7*.  Lawry,  loi. 
Foley  V.  Bitter,  89,  108,  286. 

V.  Burnell,  53. 
Folsom  V.  Clemence,  330. 
Fonda  7'.  Gross,  371. 

V.  \'an  Home,  640. 
Fontain  v.  Ravenel,  572. 
Foote  V.  Cobb,  147. 
Forbes,  /;/  re,  481. 

V.  Halsey,  660. 
V.  Howe,  537. 
V.  Logan,  142. 
V.  Overby,  221. 
V.  Scannell,  341. 
V.  Waller,  138,  294,  432,  433.  — 
Ford  V.  Chambers,  368. 
V.  Douglas,  107. 
V.  Harrington,  550,  663,  664. 
V.  Hennessy,  551. 
V.  Johnston,  42,  145,  153.  328.  — 
V.  Williams,  293,  355.  478.  479.  _ 
Forde  v.  Exempt  Fire  Co.,  179. 
Forkner  v.  Stuart,  354. 
Fornshill  v.  Murray,  611. 
Forrest  v.  Collier,  618. 
Forrester  v.  Moore,  530. 
Forsyth  v.  Matthews,  342. 
Fort   Stanwix  Bank   v.   Leggett,   182,  - 

206,  207,  429. 
Fosdick  V.  Delafield,  196. 
Foster  v.  Bates,  675. 
V.  Brown,  6. 

V.  Foster,  79,  145,  148,  177,  275.., 
V.  Hall,  283,  385. 
V.  McGregor,  25,  72. 
V.  Means,  612. 
V.  Rockwell,  599. 
V.  Saco  Mfg.  Co.,  446. 
V.  Townshend,  187. 
V.  Wallace.  358. 
V.  Woodfin,  18,  321. 
Fouche  7'.  Brower,  i. 
Fourth  Nat.  Bank  v.  Stout,  560. 
Fowler  v.  Frisbie,  145. 
V.  Jenkins,  435. 
V.  McCariney,  90. 
V.  Trcbein,  89,  108. 
Fowler's  Appeal,  91,  125,  179,  180.  266.  - 
Fox  V.  Hcaih,  642. 

V.  Hills,  31,  42,  193. 
V.  Moyer,  104,  115,  124,  140,  141 
151,  200,  209,  416. 


V 


XXViii  Re/ere?ices]        TABLE     OF     CASES.         \_areioM£es 


Fox  V.  Wallace,  121. 
V.  Wel)Ster,  630. 
Frakes  v.  Brown,  193.  j 

Francis  v.  Rankin,  289. 
Francklyn  v.  Fern,  182. 
Franco  v.  Bolton,  708. 
Frank  v.  Kessier,  135. 
V.  King-,  411. 
z'.  Robinson,  466. 
Frank's  Appeal,  303. 
Frankhouser  v.  Ellett,  476. 
Fraser  v.  Charleston,  209. 
V.  Thompson,  304. 
Frazer  v.  Thatcher,  289,  530. 
Frazier  v.  Fredericks,  351. 
Fredericks  v.  Davis,  553. 
Freedman's  Sav.  &  T.  Co.  v.  Earle,  533. 
Freeland  v.  Freeland,  37,  184,  185,  545, 

587. 
Freelove  v.  Cole,  549,  550. 
Freeman  v.  Bowen,  491. 
z'.  Deming,  182. 
V.  Elmendorf,  194. 
V.  Freeman,  407,  605. 
v.  Hartman,  424. 
V.  Kenney,  581. 
V.  Pope,  147. 
V.  Reagan,  705. 
V.  Sedwick,  547. 
V.  Smith,  76. 
Freeman  (The)  v.  Buckingham,  682. 
French  v.  Breidelman,  253. 
V.  Burns,  334. 
V.  Edwards,  439. 
V.  French,  13,  49,  53. 
V.  Holmes,  18,  46,  65,  148,  149, 

344,  4^9- 
V.  Motley,  307,  411,  530. 
V.  Sliotwell,  196,  555. 
Freund  v.  Yaegerman,  458. 
Friedenwald  v.  Mullan,  243,  500. 
Frisbey  v.  Thayer,  115. 
Frith  V.  Cartland,  69. 
Froneberger  v.  Lewis,  679. 
Frost  V.  Mott,  128. 

z>.  Warren,  321. 
Fullagar  v.  Clark,  80. 
Fuller  V.  Bean,  146. 

t'.  Brewster,  6,  9,  i  50,  328,  336, 

369-  377- 
Fullerton  v.  Viall,  255,  256. 
Fulton  V.  Fulton,  485. 

V.  Whitney,  658,  660,  676,  678, 

679. 
7/.  Woodman,  238,  525. 
Furman  z'.  Tenny,  75. 
Fury  V.  Sirohecker,  51. 
Fusze  V,  Stern,  106. 


Gaffney  v.  Hayden,  698. 

Gaffney's  Assignee  v.  Signaigo,  334. 

Gage  V.  Dauchy,  yy,  415. 

Gainer  zj.  Russ,  240. 

Gaines  v.  Chew,  226. 

V.  Relf,  III,  612. 
Galbraith  v.  Galbraith,  605. 
Galbreath  v.  Cook,  311,  312. 
Gale  V.  Williamson,  148. 
Gallagher,  I/i  re,  58. 
Gallatian  v.  Cunningham,  243,  679. 
Gallman  zj.  Perrie,  81,  88,  195^ 
Gamber  v.  Gamber,  420. 
Games,  Ex  parte,  470. 
Gannard  v.  Eslava,  144,  147. 
Garahy  v.  Ba\  ley,  507. 
Garbutt  v.  Smith,  51. 
Garden  v.  Bodwing,  470. 
Gardenier  T^.  Tubbs,  371. 
Gardiner  zk  Sherrod,  96. 
Gardiner  Bank  v.  Wheaton,  13. 
Gardinierz'.  Otis,  255. 
Gardner  v.  Broussard,  340. 

V.  Cole,  30,  502. 

V.  Gardner,  665,  666. 

V.  McEwen,  324,  472. 

V.  Ogden,  558,  559,  660. 

V.  Oliver  Lee's  Bank,  405. 
Gardner's  Admr.  v.  Schooley,  309. 
Garfield  v.  Hatmaker,  87,  131. 
Garman  v.  Cooper,  357,  364. 
Garner  v.  Graves,  179,  385. 
Garnsey  v.  Rogers,  67. 
Garrahy  v.  Green,  385. 
Garretson  v.  Kane,  56,  555. 
Garrison  v.  Monaghan,  45,  66. 
Garrity  v.  Haynes,  415. 
Garrovv  v.  Davis,  240. 
Garvin  v.  Williams,  551. 
Gary  v.  Jacobson,  546. 
Gasherie  v.  Apple,  463. 
Gates  V.  Boomer,  172,  174. 
V.  Mowry,  553. 
V.  Young,  93,  102. 
Gathings  v.  Williams,  611,  612. 
Gay  V.  Bidwell,  17,  475. 
V.  Hamilton,  334. 
V.  Parpart,  92. 
Gayler  v.  Wilder,  60. 
Ga)lords  v.  Kelshaw,  199, 
Gebhard  v.  Sattler,  543. 
Gebhart     v.    Merfeld,   42,    176,     193, 

194. 
Geer}- 7'.  Geer}-,  47,  115,  126,  140. 
Geisse  v.  Beall,  430. 
Geist  V.  Geist,  313. 

Genesee  County  Bank  v.  Bank  of  Ba- 
tavia,  174. 


Jie/erente/j         TABLE     OF     CASES.  [are  io  fag^es. 


XXIX 


Genesee    River   Nat.  Bank  ?'.    Mead, 

1 66,  218,  299. 
George  v.  Kimball,  631. 

V.  Milbanke,  63. 

V.  Norris,  356. 

V.  Williamson,    104,    105,   178, 

533.  534,  541. 
Gere  v.  Murray,  437. 
German  Bank  v.  Leyser,  179,  180. 
German  Ins.  Bank  7/.  Nunes,  341,  440. 
Gerrish  v.  Mace,  195. 
Getzler  v.  Saroni,  25. 
Gibbs  V.  Neely,  389. 
V.  Thayer,  184. 
V.  Thompson,  321,  339. 
Gibson,  Ex  parte,  598,  613,  614. 

V.  Crehore,  179. 

V.  Jeyes,  55c. 

V.  Love,  357. 

V.  Seymour,  335. 

V.  Shufeldt,  560. 

V.  Soper,   653,   699,   700,  701, 

703.  704- 
V.  Warden,  184. 
V.  Wilcoxen,  603. 
Giddings  v.  Sears,  378,  530,  531. 
Giffert  v.  West,  624,  625. 
Gifford  V.  Helms,  224,  402. 
Gilbert  v.  Lewis,  216. 
Gilbert's  Appeal,  659. 
Gill  V.  Carter,  23. 
V.  Griffith,  333. 
V.  Henry,  593. 
Gilleland  %>.  Rhoads,  75. 
Gillet  V.  Maynard,  602. 
V.  Moody,  188. 
V.  Phelps,  337. 
V.  Stanley,  638. 
Gillett  V.  Bate,  "]-],  257. 
V.  Gaffney,  370. 
Gillette  v.  Bate,  61,  62,  69. 
Gilliland  v.  Sellers'  Admr.,  586. 
Gilman  v.  Hunnewell,  59. 
Gilman,  C.  &  S.  R.R.  Co.  v.  Kelly,  674. 
Gilson  V.  Hutciiinson,  no,  230,  424. 

V.  Spear,  645. 
Ginther  v.  Richmond,  454,  463,  464. 
Girarday  v.  Richardson,  598. 
Glann  v.  Younglove,  420. 
Glass  V.  Glass,  612. 
Gleason  v.  Fayerwcalhcr,  485. 
Glen  7).  Hope  Mut.  Life  Ins.  Co.,  67. 
Glendon  Iron  Co.  v.  Uhler,  435. 
Glenn  v.  F"armers'  Bank,  136. 

V.  Glenn,  324. 
Glenny  t/.  Langdon,  182,  183,  186,455. 
Goddard  ?'.  Pomeroy,  572. 
Godden  t'.  Kimmcll,  401. 


Godding  V.  Brackett,  88. 
Godfrey  v.  Germain,  328. 
Goff  z/.  Rogers,  313,  321. 
Goldsmith  v.  Russell,  49,  103. 
Gollober  z*.  Martin,  340,  518,  519. 
Gompertz  v.  Bartiett,  625. 
Gooch's  Case,  38. 
Goodail  V.  Thurman,  599. 
Goodbar  71.  Cary,  308. 
Goode  V.  Harrison,  691. 

V.  Hawkins,  7. 
Goodell  V.  Fairbrother,  355. 
Goodheart  v.  Johnson,  470. 
Goodman  v.  Harvey,  517, 
V.  Simonds,  7. 
V.  Wineland,  344. 
V.  Winter,  696. 
Goodnow  V.  Smith,  376. 
Goodrich  7'.  Downs,  436,  600. 
Goodwin  v.  Hubbard,  283. 

V.  Kelly,  365. 
Goodwyn  v.  Goodwjn,  541. 
Goodyear    Vulcanite  Co.  v.   Frisselle, 

94.  123. 
Googins  V.  Gilmore,  355,  475,  482. 
Gordon  v.  Anthony,  61. 
V.  Hobart,  in. 

V.  Reynolds.  143,  144,  232,233. 
V.  Kitenour,  382,  527. 
V.  Worthlev,  418. 
Gore  V.  Gibson,  648. 
Gormerly  v.  Chapman,  89,  loS. 
Gormley  v.  Potter,  90. 
Gorrell  v.  Dickson,  61,  n  1. 
Goshorn  v.  Snodgrass,  316,  317,  324, 

340,  500,  525. 
Goss  V.  Neale,  530. 
Goudy  V.  Gebhart,  544. 
Gould  V.  Emerson,  46,  422. 
V.  Steinburg,  195. 
V.  Ward,  330. 
Governor  v.  Campbell,  2S3,  433. 
Gowan  v.  Gowan,  546,  557. 
Grabill  v.  Moyer,  410,  4n,  417. 
Graff  7'.  Bonnett,  70,  71. 
V.  Castleman,  658. 
Gragg  7'.  Martin,  29S. 
Graham  v.  Chai)man,  14. 
V.  Furber,  340. 
V.  Meyer.  535. 

V.  Railroad  Co.,  163,  190,  156, 
284.  209.  541.  555. 
Granger  7'.  George,  403. 
Grant,  Ex  parte,  57. 

V.  Carpenler,  485. 
V.  Green,  310. 
V.  Libby,  393. 
V.  Lloyd,  245. 


XXX 


Re/erencc/]         TABLE     OF     CASES.  [^re/oMS^^- 


Grant  v.  Morse,  553. 

V.  National  Bank,  8,  522. 
7'.  Thompson,  648. 
V.  Ward,  7,  148,  412. 
Graves  v.  Blondell,  20,  28. 
V.  Dolphin,  53,  495. 
V.  Graves,  293. 
Gray  v.  Blanchard,  485. 
V.  Bowles,  579. 
V.  Chase,  104. 
7/.  Gray,  604. 
V.  Hook,  586,  597,  611. 
V.  McCallister,  289. 
V.  Schenck,  204. 
Great  Falls  Ivlfg.  Co.  v.  Worster,  558. 
Greaves  v.  Gouge,  116,  176. 
Greeley  v.  Dixon,  443. 
Green  v.  Adams,  177. 

V.  Creighton,  in,  125. 
V.  Early,  520. 

V.  Green,  682,  693,  699,  700. 
V.  Greenbank,  644. 
V.  Hicks,  198. 
V.  Humphry,  629. 
V.  Kemp,  566,619. 
V.  Kimble,  96. 
V.  Nixon,  22. 
V.  Richardson,  67. 
V.  Sarmiento,  405. 
V.  Spicer,  497. 
7/.  Tanner,  239. 
V.  Tantum,  55. 
V.  Trieber,  15. 
V.  Van  Buskirk,  100. 
V.  Walkill  Nat.  Bank,  207. 
Greene  v.  Breck,  175. 

V.  Keene,  55,  61. 
Greenebaum  v.  Wheeler,  358. 
Greenfield's  Estate.  148. 
Greenleaf  v.  Mumford,  89, 127, 139, 191. 
Greenleve  7'.  Blum,  287. 
Greenway  v.  Thomas,  114,  134,  135. 
Greenwood  v.  Brodhead,  42,  120. 
7/.  Lidbetter,  597. 
V.  Marvin,  253. 
Greer  v.  Greer,  603. 
Gregg  V.  Bigham,  376. 
Gregory  z>.  Gregory,  688. 
V.  Whedon,  588. 
Grider  v.  Graham,  543,  593. 
Gridley  v.  Watson,  150. 
Griffin  v.  Barney,  442.  463,  466. 
V.  Cunningham,  573. 
V.  Doe  (f.  Stoddard,  171. 
V.  Macaulay,  547. 
V.  Marquardt,  293,  432,  433,436- 
V.  Mitchell,  581. 
V.  Nitcher,  90,  114,  115. 


Griffin  7/.  Stanhope,  330. 
Griffith  V.  Godey,  651. 

V.  Griffith,  234,  505,  506. 

V.  Parks,  381. 

V.  Townley,  277. 
Grignon  v.  Astor,  581. 
Grimstone  7/.  Carter,  507. 
Griswold  7a  Sheldon,  349,  362,  472. 
Grocers'  Bank  v.  Murphy,  57. 
Grogan  v.  Cooke,  48,  55. 
Gronfier  7a  Puymirol,  639. 
Gross  7'.  Daly,  116,  127,  139,  191. 
Grotenkemper  v.  Harris,  344. 
Grover  v.  Grover,  238. 

V.  Wakeman,  6,.  8,   14,  21,  288 

443.  464. 
Grubbs  v.  Greer,  341. 
Guckenheimer  7/.  Angevine,  271,  277. 
Guerin  v.  Hunt,  456,  457,  458. 
Guernsey  v.  Powers,  267. 

V.  Wood,  405. 
Guest  V.  Barton,  542. 

V.  City  of  Brooklyn,  575. 
Guice  V.  Sanders,  356. 
Guidry  v.  Grivot,  29,  192,  545. 
Guignard  7^.  Aldrich,  371. 
Guillander  v.  Howell,  100. 
Guion  V.  Liverpool,  L.  &  G.  Ins.  Co., 

376. 
Gulick  V.  Bailey,  597. 
Gullett  V.  Lamberton,  691. 
Guthrie  V.  Gardner,  87,  131. 

V.  Morris,  646. 
Gutzweiler  v.  Lackmann,  9. 
Gwin  7/.  Selby,  83. 
Gwyer  v.  Figgins,  148. 

Haak's  Appeal,  194,  290,  540. 
Haas  V.  Chicago  Bldg.  Soc,  268. 
Haase  v.  Mitchell,  705. 
Hackett  v.  Manlove,  469. 

V.  Ottawa,  607. 
Hadden  v.  Spader,   12,  33,  42,  56,  61, 

86,  105. 
Hadley  t.  Morrison,  50. 
Haenschen  7'.  Luchtemeyer,  38?. 
Hafner  v.  Irwin,  4,  330,  331,  333,  430. 
Hagan  7^  Walker,  125,  133. 
Hager  7'.  Shindler,  195,  251. 

V.  Thomson,  7,  9. 
Haggarty  v.  Pittman,  84. 
Haggerty  v.  Nixon,  87,  114. 
Hagthorp  v.  Neale,  706. 
Haines  7'.  Hollister,  199,  205,  206. 
Halbert  v.  Grant,  126. 
Hale  7/.  Baldwin,  405. 

7'.  Metropolitan  Omnibus  Co, ,347. 

7'.  Sweet,  361. 


References'^         TABLE     OF     CASES.  \_cire  to /ia^es. 


XXXI 


Hale  V.  Taylor,  293. 

•».  West  Va.  Oil  &  Land  Co.,  377. 

7'.  Wetmore,  178. 
Hall  V.  Arnold,  21,  283,  289. 

V.  Callahan,  178. 

V.  Gerrish,  685. 

V.  Hall,  23,  64. 

V.  Haliet,  664. 

V.  Law,  401. 

V.  Marston,  67. 

V,  Moriarty,  170. 

V.  Naylor,  630. 

V.  Ritenour,  382. 

v.  Russell,  404. 

V.  Sands,  145. 

V.  Stryker,  128. 

V.  Tutts,  487. 

V.  Warren,  655. 

V.  Williams,  496. 
Hallam  t'.  Indianola  Hotel  Co.,  657. 
Hallet's  Estate,  In  re,  69. 
Hallett^'.  Oakes,  652. 

V.  Thompson,  53,  70,  495. 
Halley  v.  Troester,  704. 
Hallovvell  ^'.  Bayliss,  184. 
Halsey  v.  Reid,  699. 
Halsted  v.  Halsted,  98. 
Hambell  v.  Hamilton,  602. 
Hamburger  v.  Grant,  45. 
Harnett  v.  Dundass,  24,  144. 
Hamilton  v.  Ball,  593. 

V.  Cone,  87,  103.  131,  283. 
V.  Cummings,  708. 
V.  Russel,  30,  356,  357. 
V.  Schaack,  662. 
V.  Scull,  544. 
Hamlen  v.  McGillicuddy,  90,  217. 
Hamhn  7'.  Wright,  172,   174,   185,  187, 

204. 
Hammond  7'.  Hudson   River  L  &  M. 

Co.,  175,  204. 
Hanauer  v.  Doane,  584,  595,  596,  599. 
Hanby  v.  Logan,  66. 
Hancock  v.  Sears,  94,  95. 
Hand  v.  Kennedy,  67. 
Hanes  v.  Tiffany,  184. 
Hanford  v.  Artcher,  310,  356,  361,  368. 

V.  Obrecht,  371. 
Hangen  v.  Hachmeisier,  700. 
Hanks  v.  Naglee,  599. 
Hann  v.  Van  Voorhis.  71. 
Hannan  v.  Oxley,  413. 
Hannibal  &  St.  Jo.  R.R.  Co.T/.Shack- 

lett,  5S1. 
Hanover  R.R.  Co.  v.  Coyle,  383. 
Hanson  v.  Buckner,  148. 
V.  Vernon,  606. 
Hapgood  7/.  Fisher,  501,  502. 


Hardesty  v.  Kinvvorthy,  379. 
V.  Richardson,  605. 
Hardey  v.  Green,  150. 
Harding  v.  Handy,  651. 
Hardmann  v.  Bowen,  434,  456. 
Hardy  v.  Mitchell,  407. 
V.  Potter,  354. 
V.  Simpson,  17,  19. 
V.  Waters.  640,  641,  642. 
Harget  v.  Blackshear,  408. 
Harlan  v.  Maglaughlin,  290. 
Harlin  v.  Stevenson,  208. 
Harman  v.  Hoskins,  1 5,  16,  17,  279,  466, 

470,  600. 
Harmon  v.  Harmon,  541. 
Harmony  v.  Bingham,  669,  670. 
Harner  v.  Dipple,  642. 
Harper  v.  Perry,  313,  664. 
Harrell  v.  Mitchell,  319,  340,  342,392. 
Harriman  v.  Gray,  425. 
Harris  7>.  Alcock,  321. 
V.  Burns,  337. 
V.  Harris.  145,  193,  549. 
V.  Sangston,  269. 
V.  Sumner,  466,  529. 
Harrison  v.  Hallum,  228. 

V.  Mayor,  etc.,  of  Southamp- 
ton, 23. 
V.  Trustees  of  Phillips  Acad- 
emy, 335. 
Hart  V.  Chalker,  309. 
V.  Ten  Eyck,  244. 
V.  Wing,  358. 
Harter  v.  Chnstoph,  10. 
Hartley  %>.  White,  307. 
Hartman  v.  Diller,  389. 
Hartness  v.  Thompson,  690. 
Hartshorn  7/.  Eames,  21,  90,  238.  28S, 
324,  328.  336,  338. 
V.  Williams,  335. 
Hartshorne  v.  Nicholson,  572. 

7'.  Watson,  621. 
Harvey  v.  Hunt,  597. 

V.  Varney,  545,  553,  587. 
Harwood  v.  Railrojd  Co.,  401. 
Hassan  v.  Barrett,  334,  335.  556. 
Hastings  v.  Dollarhide,  641,  693. 
Haston  v.  Castner.  125,  133,  147,  iSo. 
Haswell  v.  Haswell,  491, 
Hatch  V.  City  of  liuflaio.  576. 

V.  Dana,  56,  107,  188,  190. 
V.  Daniels,  269. 
V.  Dorr.  105. 
V.  Hatch,  6.S8. 
Hathaway  v.  Brown,  293,  294. 
V.  Moran,  438,  439. 
Hatstat  V.  Blakeslce,  357. 
Hatztield  v.  Gulden,  597. 


XXXii  Re/erences'j         TABLE     OF     CASES.  [are /o Ms-es. 


Hauselt  v.  Harrison,  469. 

7/.  Vilmar,  289,  461. 
Haven  v.  Richardson,  330. 
Havens  v.  Healy,  495. 

V.  Sherman,  655. 
HsLwes  V.  Loader,  178. 

V.  Oakland,  116,  176. 
Hawkins  7a  Alston,  322. 

V.  Davis,  501,  631. 
V.  Gathercole,  268. 
7/.  Hastings  Bank,  478,  479. 
Hawley  v.  Cramer,  518,  662,  663,  688. 
V.  Fairbanks,  560. 
V.  Hunt,  405. 
V.  Northampton,  485. 
Haxtun  v.  Bishop,  467. 
Hayden  v.  Shed,  618. 
Haydock  v.  Coope,  427, 444,  538. 
Haynes  v.  Brooks,  445. 

V.  Hunsicker,  367. 
V.  Rudd,  592,  597. 
Heacock  v.  Durand,  82,  453. 
Hearle  v.  Greenbank,  642. 
Heath  7/.  Bishop,  53,497. 

V.  Mahoney,  645,  691. 
V.  Page,  20,  145,  253,  390. 
Heaton  7/.  Prather,  507. 
Heck  V.  Fisher,  49. 
Heckman  v.  Messinger,  73,  429. 
Hedman  v.  Anderson,  475. 
Hefner  v.  Metcalf,  21. 
Heiatt  v.  Barnes,  120,  121,  148. 
Heilman  v.  Jones,  196. 
Helps  7J.  Clayton,  647. 
Hempstead  v.  Johnston,  6, 
Henckley  v.  Hendrickson,  6. 
Henderson  v.  Brooks,  121. 

V.  Downing,  482. 
V.  Henderson,  340. 
V.  Hoke,  166. 
V.  Hunton,  273. 
V.  McGregor,  651. 
Hendricks  v.  Mount,  170. 

7'.  Robinson,  12,  1 20,  221. 
Henkel,  In  re,  74. 
Henley  v.  Hotaling,  334. 
Hennequin  v.  Clews,  406. 

V.  Naylor,  630. 
Henning  %>.  Harrison,  485. 
Henriques  v.  Hone,  619. 
Henry  v.  Fine,  652,  704. 
V.  Henry,  390. 
V.  Hinman,  20,  28,  81,  89. 
V.  Ritenour,  651. 
V.  Root,  573,  684,  685,  686. 
V.  Sargeant,  212. 
V.  Vermilion  R.R.  Co.,  56. 
Herkelrath  v.  Stookey,  320. 


Herman  v.  Haffenegger,  705. 
Herrick  v.  Borst,  219,  379.    • 
Herring  v.  N.  Y.,  L.  E.  &  W.  R.R.  Co., 
114. 
V.  Richards,  9,  150,  153,  169, 

290. 
V.   Wickham,  6,  8,   297,  303, 
414. 
Herrlich  v.  Brcnnan,  513. 
Herron  v.  Marshall,  706. 
Herschfeldt  v.  George,  164. 
Hershy  v.  Latham,  41 1. 
Hervey  7/.  Edmunds,  572. 
Heslop  V.  Baker,  675. 
Hess  7/.  Hess,  181. 
V.  Voss,  664. 
Hesse  v.  Stevenson,  61,  62. 
Hesser  v.  Wilson,  358. 
Hesthal  v.  Myles,  358. 
Hewes  v.  Parkman,  673. 
Hewitt  V.  Warren,  644,  645. 
Heydock  v.  Stanhope,  no. 
Heye  v.  Bolles,  128,  139. 
Heyneman  v.  Dannenberg,  128. 
Heywood  v.  City  of  Buffalo,  194,  576. 
Hickey  v.  Ryan,  379. 
Hickman  v.  Jones,  584. 

V.  Trout,  315,  318. 
Hickox  v.  Elliott,  19. 
Hicks  V.  Campbell,  228. 
V.  Marshall,  655. 
Hiern  v.  Mill,  505. 
Hiestand  v.  Kuns,  681. 
Higby  V.  Ayres,  172,  174. 
Higgins  V.  Gillesheiner,  187. 
High  V.  Wilson,  408. 
Hildebrand  v.  Bowman,  73,  441. 
Hildeburn  v.  Brown,  330,  331. 
Hildreth  v.  Fitts,  365. 

V.  Sands,  195,  331. 
Hill,  Ex  parte,  491. 

V.  Agnew,  454. 

V.  Anderson,  639. 

V.  Bowman,  319,  530. 

V.  Lewis,  623. 

V.  Pine  River  Bank,  587. 

V.  Reed,  467. 
Hilliard  v.  Cagle,  164,  290,  332. 

V.  Phillips,  386. 
Hills  V.  Carlton,  405. 

V.  Eliot,  378. 

V.  Sherwood,  125,  179,  376. 
Hilton  V.  Barrow,  707. 
Hinckley  v.  Kreitz,  177. 
Hinde  v.  Vattier,  518. 
Hinde's  Lessee  v.  Longworth,  149, 153, 

163.  165,  301.  312,  344,  416,  421. 
Hinds  V.  Hinds,  145. 


Re/erencei^         TABLE     OF     CASES.         [arc  to  fages.  X  X  X  1 1  "l 


Hine  v.  Bowe,  427. 
Hinkle  v.  Wilson,  41 1,  419. 
Hirsch  v.  Trainer,  651. 
Hirschfeld  7'.  Williamson,  385. 
Hitchcock  V.  Cadmus,  446. 
V.  Galveston,  606. 
V.  Kiely,  164,  285,  298. 
Hitt  V.  Ormsbee,  48,  56. 
Hixon  V.  George,  74,  75. 
Hoag  V.  Sayre,  322. 
Hobart  v.  Frost,  581. 

V.  Hobart,  192. 
Hobbs  V.  Davis,  28,  289,  291. 
Hobokeii  Bank  v.  Beckman,  239,  242. 
Hockley  v.  Mawbey,  64. 
Hodges  V.  New  England  Screw  Co., 
220. 
V.  Silver  Hill  Min.  Co. ,1 17,141. 
V.  Spicer,  386. 
Hodgman  v.  Western  R.R.  Co.,  429. 
Hodgson  V.  Butts,  302. 

V.  Newman,  322. 
V.  Temple,  596. 
Hoey  V.  Pierron,  419. 
Hoffer  V.  Gladden,  340. 
Hoffman  v.  Junk,  42,  145,  193,  290. 
7'.  Mackall,  21. 
V.  Noble,  37,  631. 
V.  Pitt,  352. 
Hoffman's  Appeal,  108. 
Hogan  V.  Burnett,  137. 
Hoke  V.  Henderson,  526. 
Holbird  v.  Anderson,  21,  288,  289,  322, 

461,  530. 
Holbrook  v.  Holbrook,  385. 

V.  New  Jersey  Zinc  Co.,  235. 
Holden  v.  Burnham,  148,  219,  299. 

V.  Hoyt,  707. 
Holdship  V.  Patterson,    54,  492,  497, 

498. 
Hollacher  v.  O'Brien,  355,  362. 
Holladay  Case,  The,  104,  141,  518. 
Holland  v.  Alcock,  572. 
V.  Cruft,  179. 
V.  Hoyt,  603. 
Hollingsworth  v.  Barliour,  5S9. 
V.  Crawford,  262. 
V.  Spnulding,  659. 
Hollister  v.  Abbott,  406. 
V.  Bark  ley,  269. 
V.  Loud,  237. 
Hollivvay  v.  Holliway,  546,  551. 
Hoiman  v.  Johnson,  600. 
Holmberg  7'.  Uean,  457. 
Holmer  v.  Viner,  536. 
Holmes  7/.  Blogg,  684,  696. 
V.  Cofihill,  63. 
V.  Hubbard,  465. 

c 


Holmes  v.  Marshall,  466. 
V.  Penney,  298. 
z'.  Rice,  689,  690. 
v.  Sherwood,  200. 
Holt  V.  Creamer,  281,  322,  600. 

V.  Holt,  639. 
Hone  V.  Henriquez,  430,  533. 
Hooley  v.  Gieve,  52,  69. 
Hoopes  V.  Knell,  341. 
HooserT'.  Hunt,  520. 
Hoot  V.  Sorrcli,  327. 
Hope  Mut.  Life  Ins.  Co.  t/.  Taylor,  189. 
Hopkins  7'.  Langton,  283,  521. 
Hopkirk  7/.  Randolph,  46,  66,  78. 
Horbach  v.  Hill,  143. 
Herd's  Admr.  v.  Colbert,  6,  8. 
Horn  7'.  Horn,  33,  86. 
V.  Keteltas,  334. 
V.  Lockhart,  585. 
V.  Ross,  154. 
Horneffer  7'.  Duress,  413. 
Homer  7/.  Zimmerman,  82. 
Horsey  v.  Heath,  178. 
Horstman  v.  Kaufman,  244. 
Horton  v.  Buffinton,  600. 

V.  Dewey,  410,412,413. 
7'.  Williams,  470,  600. 
Horwitz  V.  EUinger,  21,  435,  461. 
Houghton  7'.  Nasii,  705. 
Houston  7/.  Blackman.  311. 
Hovenden  v.  Lord  Annesley,  33,  401, 

402. 
Hovey  v.  Chase,  650. 

7f.  Hobson,  651,  654,  703. 
7'.  Holcomb,  232,  555. 
How  V.  Taylor,  366. 
Howard  v.  Prince,  in,  354,  356. 

7.  Sheldon,  I2i. 
Howard  Express  Co.  7-.  Wile,  391. 
Howard  Ins.  Co.  v.  Halsey,  507. 
Howard  Nat.  Bank  7'.  King,  100. 
Howden  v.  Haigh,  597. 
Howe  7'.  Bishop,  87,  131,  283. 
7/.  Ward,  37. 
7'.  Whitney,  115. 
Howe  Machine  Co.  v.  Claybourn,  283, 
520. 
V.  Rosine,  705. 
Howell  V.  Baker,  663. 
V.  Mitchell,  297. 
V.  Wilson,  627. 
Howland  v.  Blake,  10. 
Howse  7/.  Moody.  203,  208. 
Howson  7'.  Hancock,  536. 
Hoxie  V.  Price,  148.  195.  4".  4'3- 
Hoylc  V.  Platisburgh  &  M.  R.R.  Co., 
657. 
V.  Stowe,  691. 


XXxiv  JRe/erence/]        TABLE     OP''     CASES.         [^re  io  ^^-es. 


Hoyt  V.  Casey,  646. 

V.  Goclirey,  28,  45,  270. 
Hoyt  &  Bros.  Mfg.  Co.  v.  Turner,  520. 
Hubbard  v.  Allen,  297,  311,  339. 
V.  Hubbard,  81. 
V.  McNaughton,  443. 
Hubbell  V.  Lerch,  174. 

V.  Meigs,  7. 
Hubler  7\  Waterman,  442, 
Hudgins  v.  Kemp,  242,  328,  336. 
Hudnal  v.  Wilder,  179,  505. 
Hudson  V.  Osborne,  59. 

V.  Plets,  56,  57,  94. 
Huey's  Appeal,  25,  76. 
Huff  V.  Earl,  587. 
Huggins  V.  Perrine,  164. 
Hughes,  Ex  parte,  661. 
V.  Bloomer,  456. 
V.  Cory,  29,  350,  470,  475. 
V.  Gallans,  645. 
V.  Littrell,  404. 
V.  Monty,  384. 
V.  Northern  Pacific  R.R.  Co., 

232. 
V.  Roper,  325. 
Huguenin  v.  Baseley,  64,  103. 
Hugunin  v.  Dewey,  25,  75. 
Hugus  V.  Robinson,  359. 
Hull  V.  Hull,  192. 

V.  Sigsworth,  357. 
Humbert  v.  Trinity  Church,  25. 
Hume  V.  Beale,  401. 
Humes  v.  Scruggs,  24,   118,   169,  239, 

248,  416. 
Humphreston's  Case,  572. 
Hungerford  v.  Earle,  320,  330. 
Hunsinger  v.  Hoefer,  145, 
Hunt^/.  Field,  114,  128. 
Hunter  v.  Anthony,  599. 
V.  Bradford,  241, 
V.  Corbett,  475. 
V.  Hunter,  232. 
V.  Nolf,  681. 
Hunters  v.  Waite,  26,  289. 
Huntington  v.  Clark,597. 

V.  Saunders,  259. 
Huntzinger  v.  Harper,  393. 
Hurd  V.  Ascherman,  240. 

.    V.  Hall,  624,  625,  627. 
Hurlburd  v.  Bogardus,  340,  366. 
Hurley  v.  Osier,  503. 
Hussey  v.  Castle,  412. 
V.  Sibley,  625. 
Hussman,  In  re,  247. 
Hutcheson  v.  Peshine,  467. 
Hutchins  v.  Gilchrist,  367. 

V.  Hutchins,  97  605. 
Hutchinson  v.  Lord,  451. 


Hutchinson  v.  Murchie,  211. 
Hutton  V.  Benkard,  64. 
Hyde  v.  Chapman,  141. 

V.  Eliery,  84,  265. 

V.  Frey,  414. 

V.  Watts,  621. 

V.  Woods,  54,  57,  58,  71,  497. 
Hyman  v.  Kelly,  268. 
Hyslop  V.  Clarke,  443,  600. 

Idaho,  The,  52,  682. 

Iley  V.  Niswanger,  166. 

Illinois  Land  Co.  v.  Bonner,  638,  691, 

693- 
Imray  v.  Magnay,  108. 
Indianapolis  Chair  Mfg.  Co.  v.  Wilcox, 

638,  698, 
Ingalls  V.  Herrick,  354,  362. 

V.  Lee,  623. 
IngersoU  v.  Mangam,  639. 
Ingliss  V.  Grant,  326. 
Ingraham  v.  Baldwin,  653. 
Inhabitants  of  Pelham  v.  Aldrich,  144. 
Inloes  V.  Amer.  Exch.  Bank,  15. 
Inloes'  Lessee  v.  Harvey,  206. 
Innes  v.  Lansing,  175,  445. 
Irish  V.  Bradford,  309. 
Iron  Mountain  Ry.  v.  Knight,  682. 
Irons  V.  Manufacturers'  Nat.  Bank,  188. 
Irvine  v.  Irvine,  692,  693,  695. 
Iselin  V.  Peck,  381. 
Isham  V.  Schafer,  49. 
Ithaca  G.  L.  Co.  v.  Treman,  45. 
Ives  V.  Ashley,  587,  658,  659. 

Jackman  v.  Robinson,  201,  204,  208. 
Jacks  V.  Nichols,  238. 
Jackson  v.  Andrews,  234. 

V.  Badger,  299. 

V.  Bull,  604. 

V.  Burgott,  108. 

V.  Cad  well,  616. 

■V.  Carpenter,  683. 

V.  Davison,  438,  439. 

V.  Duchaire,  536. 

V.  Edwards,  251, 

V.  Garnsey,  540. 

V.  Gumaer,  653. 

V.  Hart,  242. 

V.  King,  8,  91,  647,  648,  650. 

V.  Lomas,  536. 

V.  Losee,  429. 

V,  Mather,  519. 

V.  Middleton,  53. 

V.  Miner,  151,  305. 

V.  Myers,   42,    108,    144,    145, 
176,  193. 

V.  Packard,  600. 


Jie/erences'j        TABLE    OF    CASES.         [^are /o/a^es.  XXXV 


Jackson  v.  Post,  151,  165. 

V.  Seward,  42,  144. 
V.  Van  Dalfsen,  587,  679. 
V.  Van  Dusen,  648. 
V.  Walsh,  587. 
Jacoby's  Appeal,  89,  108. 
Jacot  V.  Boyle,  84. 
Jaeger  z>.  Kelley,  8,  283,  284,  326,  394, 

432. 
Jaffers  v.  Aneals,  329. 
Jaffray  7k  Frebain,  690. 

V.  McGehee,  iii,  438,  439. 
Jaffrey  v.  Brown,  331, 

V.  McGough,  410, 
Jaggers  ?'.  Grififin,  705. 
James  v.  Bird,  547. 

7'.  Van  Duyn,  6. 
James  Goold  Co.  7/.  Maheady,  412. 
Jamison  v.  Beaubien,  108. 
V.  King,  328, 
V.  McNally,  297, 
Janes  v.  Janes,  612. 

V.  Whitbread,  326,  446. 
Janvrin  v.  Fogg,  481. 
Jaques  v.  Greenwood,  462. 

V.  Sax,  639. 
Jauretche  f.  Proctor,  485. 
JefTord's  Admr.  2'.  Ringgold,  690,  691. 
Jeffres  7'.  Cochrane,  533. 
Jenkins  v.  Andover,  607. 

7'.  Clement,  148,  149,  150. 
V.  Einstein,  341. 
V.  Eldredge,  507. 
V.  Fowler,  435. 
V.  Jenkins,  612,  694. 
V.  Lockard,  14,  144. 
Jenkyn  v.  Vaughan,  47,  167. 
Jenner  v.  Walker,  647. 
Jenney  7'.  Andrews,  63,  64. 
Jennings  v.  Howard,  219. 

V.  McConnel,  663. 
V.  Prentice,  457. 
V.  Rundall,  644. 
Jenny  v.  Jenny,  424. 
Jerome  v.  McCarter,  184. 
Jervis  v.  White,  707. 
Jessopp  7/.  Lutwyche,  601. 
Jessup  V.  Hulse,  218. 
Jewell  7'.  Knight,  561, 
7'.  Parr,  391. 
7'.  Porter,  171. 
Jewett  7'.  Bowman,  7. 
V.  Guyer,  355. 
V.  Miller,  660. 
7'.  Noteware,  411,  530,  533. 
Jiggitts  7'.  Jiggitts,  1 10,  424. 
Jimmerson  7'.  Duncan,  87. 
Johnson  </.  Cushing,  63. 


Johnson  v.  Farnum,  265. 

V.  Gibson,  236,  525. 
V.  Herring,  456. 
V.  Holloway,  358. 
7^.  Jones,  125,  133,  179,  180. 
V.  Lovelace,  381. 
V.  McAllister,  442. 
V.  Meeker,  606. 
V.  Pie,  644. 
7'.  Willey,  364. 
Johnson's  Estate,  665. 
Johnston  v.  Dick,  343. 

V.  Johnston,  410. 
V.  Jones,  392. 
V.  Lewis,  706. 
V.  Thompson,  388. 
V.  Zane,  154. 
Joiner  v.  Franklin,  410. 
Jones,  In  rt\  417. 

V.  Barkley,  536. 

V.  Bryant,  51,  587. 

V.  Caswell,  596. 

V.  Clifton,  64,  419. 

V.  Comer,  547. 

V.  Conoway,  403. 

V.  Easley,'370. 

7/.  Green,  6,  79,   113,    114,    117, 

119,  124.  128,  133. 
V.  Huggeford,  475. 
V.  King,  143. 
V.  Massey,  216. 
V.  Ncvers,  347. 
V.  Pugh,  267. 
V.  Rahilly,  557. 
V.  Shaddock,  69. 
V.  Simpson,  6,  7,  2S9,  377. 
V.  Smith,  507. 
V.  Syer,  448. 
Jones'  Appeal,  304. 
Jopling  V.  Dooley,  705. 
Jordan  7/.  White,  67,  530. 
Joseph  V.  Levi,  466,  470. 

V.  McGill,  128.  266. 
Juzan  V.  Toulmin,  6. 

Kahley,  In  re,  470,  473. 
Kaighn  v.  Fuller,  269. 
Kaine  v.  Weigley,  7,  10,  M. 
Kalk  V.  Fielding,  321. 
Kamp  7'.  Kamp,  132. 
Kane  v.  Bloodgood,  405. 

V.  Drake,  356. 

V.  Hibernia  Ins.  Co.,  12. 

V.  Roberts,  169. 
Kansas  Pacific  Ry.  Co.  7/.  Couse,  363. 
Kasson  v.  People,  102. 
Kau*"'nan  7'.  Whitney  412. 
Kavanagh  v.  Beckwiih,  436. 


XXXVi  lie/erences']        TABLE    OF    CASES.         [are  io  Jia^es . 


Kayser  v.  Heavenrich,  444. 
Keane  v.  Boycott,  589,  635,  690. 
Kearney  v.  Vaughan,  566,  619. 
Keel  7/.  Larkin,  541,  546. 
Keen  v.  Coleman,  696. 

V.  Kleckner,  307,  530. 
Keeney  v.  Good,  420. 

V.  Home  Ins.  Co.,  187. 
Keep  V.  Sanderson,  451,  452. 
Keevil  v.  Donaldson,  449. 
Kehr  v.  Smith,  166,  419,  421, 
Keite  v.  Clopton,  569. 
Keith  V.  Clark,  585,  599. 
V.  Fink,  308. 
V.  Proctor,  321. 
Keller  v.  Blanchard,  356. 
Kelley  v.  People,  388. 
Kellog  V.  Richardson,  458. 
Kellogg  V.  Aherin,  244,  283. 
v.  Barber,  464. 
V.  Olmsted,  209. 
V.  Root,  341. 
V.  Slauson,  377,  450,  464. 
V.  Slawson,  6. 
Kelly  V.  Campbell,  383, 
V.  Crapo,  467.  ' 
V.  Lane,  191. 
V.  Lenihan,  16. 
V.  McGrath,  423,  424. 
Kelton  V.  Millikin,  610. 
Kemp  V.  Cook,  639. 
Kempe's  Lessee  z'.  Kennedy,  581. 
Kempner  v.  Churchill,  6,  9,  24,   294, 

298,  320,  326. 
Kempson  v.  Ashbee,  651. 
Kendall  v.  Fitts,  366. 

V.  Lawrence,  588,  689,  690. 
V.  May,  652. 

V.  New  Eng.  Carpet  Co.,  446. 
V.  Samson,  355. 
Kenley  v.  Kenley,  612. 
Kennedy  v.  Creswell,  180. 

V.  Divine,  385,  388,  389. 
V.  Doyle,  639. 
V.  Gibson,  208. 
V.  Green,  506,  507,  521. 
TJ.  Thorp,  185,  461. 
Kensington  v.  White,  226. 
Kent  v.  Curtis,  114. 
V.  Lasley,  10. 

V.  Quicicsilver  Min.  Co.,  568,  686. 
V.  Riley,  421. 
Kenton  County  Court  v.  Bank  Lick  T. 

Co.,  599. 
Kepple's  Appeal,  485. 
Kerbs  v.  Ewing,  458. 
Kern  z>.  Thurber,  631. 
Kerr  v.  Hutchins,  250,  325, 


Kerr  7/.  Mount,  618. 

Kersey  Oil  Co.  v.  Oil  Creek  &  A.  R.R. 

Co.,  688. 
Kesner  v.  Trigg,  410,  421. 
Kessinger  v.  Kessinger,  306. 
Ketchum,  Matter  of,  57. 

V.  Brennan,  705. 
Kevan  v.  Crawford,  322. 
Key  V.  Davis,  654. 

V.  Holloway,  665. 
Keys  V.  Grannis,  408. 
Keyser  t^.  Angle,  501. 

v.  Harbecic,  629,  631. 
Kibbe  v.  Wetmore,  100. 
Kidd  V.  Johnson,  59,  60. 

V.  Rawlinson,  41,  352. 
Kidder  v.  Horrobin,  183.I 

V.  Hunt,  602. 
Kidney  v.  Coussmaker,  167. 
Kilbourne  v.  Fay,  184. 
Killian  v.  Clark,  6,  164. 
Killinger  v.  Reidenhauer,  424. 
Kilner,  Ex  parte,  538. 
Kimball  v.  Fenner,  311,  413. 
V.  Harman,  96. 
V.  Noyes,  68. 
Kimble  v.  Smith,  290. 
Kimbray  v.  Draper,  574. 
Kimmel  v.  McRight,  87. 
Kinealy  v.  Macklin,  251. 
King  7/.  Bailey,  358. 

V.  Brown,  602,  603,  604. 
V.  Dupine,  33,  86. 
V.  Hubbell,  321. 
V.  Mackellar,  675. 
V.  Moon,  91,  317,  338. 
V.  Phillips,  630. 
V.  Poole,  294,  390. 
V.  Russell,  319,  320,  343. 
V.  Tharp,  118,  376. 
V.  Trice,  102,  234. 
V.  Wilcox,  272,  275,  328. 
King's  Heirs  v.  Thompson,  219. 
King  (The).     See  Rex. 
Kingman  v.  Perkins,  641,  690. 
Kingsbury  v.  Earle,  d^. 
Kinsley  v.  Scott,  99. 
Kinnard  v.  Daniel,  419. 
Kip  V,  Bank  of  N.  Y.,  429. 
Kipling  V.  Corbin,  462. 
Kipp  V.  Hanna,  50,  167,  344. 
Kipper  v.  Glancey,  125,  135. 
Kirby  v.  Bruns,  49. 

V.  Ingersoll,  14. 

V.  Lake  Shore  &  M.  S.  R.R.  Co., 

400,  402,  404. 
V.  Masten,  386. 
V.  Schoonmaker,  308. 


JZe/erencesj        TABLE     OF    CASES.         [are  to pa^es.  XXX  vil 


Kirkbride,  J^g,  473,  476. 

Kirksey  v.  Snedecor,  162,  169, 

Kirtland  v.  Snow,  360. 

Kisling  V.  Shaw,  663. 

Kissam  7/.  Edmundson,  166. 

Kissock  V.  Grant,  616. 

Kisterbock's  Appeal,  282. 

Kitch  v.  St.  Louis,  K.  C.  &  N.  Ry.  Co., 

518. 
Kittering-  v.  Parker,  237. 
Kittredge  v.  Sumner,  283. 
Klapp  V.  Shirk,  434. 
Klein  v.  Horine,  217. 

V.  McNamara,  25. 
Kline  v.  Baker,  630. 

V.  Beebe,  674,  683,  684. 
Klous  V.  Hennessey,  96,  97. 
Knapp  7'.  City  of  Brooklyn,  216. 

V.  Lee,  545. 

V.  McGowan,  463,  464. 

V.  Smith,  415. 
Knatchbull  v.  Hallet,  69. 
Kneedler's  Appeal,  649. 
Knickerbacker  7/.  Smith,  640. 
Knight  V.  Forward,  169,  364,  386. 

V.  Hunt,  536. 
Knott,  Ex  parte,  503. 
Knowles  v.  Muscatine,  581. 
Knowlton  v.  Hawes,  503. 

V.  Mish,  24,  419. 
Knox  V.  Flack,  640. 

V.  McF'arran,  108,  384. 
Knye  v.  Moore,  226. 
Koenig  v.  Steckel,  102. 
Koonce  v.  Butler,  617. 
Koster  v.  Hiller,  148,  140. 
Kountz  7/.  Davis,  693. 
Kramer  v.  Holster,  573. 
Kreuzer  v.  Cooney,  358. 
Kruse  v.  Prindle,  377. 
Kuevan  v.  Speaker,  25. 
Kuhl  V.  Martin,  147. 
Kuhlman  v.  Orser,  464. 
Kurtz  V.  Hibner,  605. 

V.  Miller,  521. 
Kutz's  Appeal,  410. 
Kuykendall  v.  McDonald,  300. 

Lacker  v.  Rhoades,  429. 

Lackman  v.  Wood,  696. 

Lacrosse  &  ^L  R.R.  Co.  v.  Seeger,  170. 

Ladd  V.  Wiggin,  335. 

Lagay  v.  Marston,  705. 

Laidlaw  t'.  Gilmore,  328. 

Lake  v.  Billers,  408. 

V.  Morris,  339,  366. 
Lamar  Ins.  Co.  v.  Moore,  188 
Lamb  v.  Stone,  95. 


Lambert  v.  Heath,  626. 

Lammon  v.  Clark,  234. 

Lammot  v.  Bowly,  675. 

Lamson  v.  Patch,  372. 

Lancaster  Co.   Nat.  Ba:ik  v.  Moore, 

652,  702. 
Lane  v.  Cowper,  572. 

V.  Latimer,  705. 

V.  Lutz,  469,  470. 

V.  Nelson,  573. 
Lang  V.  Lee,  323,  470. 

V.  Stockwell,  355,  365. 

V.  Whidden,  648. 
Lange,  Ex  parte,  614. 
Langford  v.  Fly,  42,  193,  338. 

V.  Thurlby,  41 1,  416, 
Langton  v.  Hughes,  595,  598. 
Lario  v.  Walker,  485. 
Larkin  v.  McAnnally,  76. 
V.  McMullin,  157. 
V.  Saffarans,  574,  619. 
La  Rue  v.  Gilkyson,  652. 
Lassells  v.  Cornwallis,  63. 
Lassiter  v.  Davis,  286,  299. 
Latham  v.  Hicky,  705. 
Lathrop  v.  Bampton,  69. 

V.  Clapp,  186. 
Latimer  7/.  Batson,  352,  371. 
Lattin  v.  McCarty,  84. 
Laughton  v.  Harden,  42,  156,  2S5,  298, 

344. 
Lavender  v.  Boaz,  340. 
Law  V.  Payson,  376. 
Lawrence  v.  Bank  of  the  Republic,  89, 
191,  199,  205,  228. 
V.  Fox,  67,  69. 
V.  McArter,  640. 
V.  Norton,  443,  444. 
V.  Tucker,  309,  312. 
Lawson  v.  Ala.  Warehouse  Co.,  321. 
7,'.  Funk.  282. 
V.  Lovejoy,  6S4. 
Lawton  v.  Buckingham,  313. 

V.  Howe,  624. 
Lay  V.  Neville,  358. 
Lazell  V.  Pinnick,  655. 
Lea  7'.  Hinton,  422. 
Leach  7/.  Francis,  283. 
V.  Hewitt.  625. 
%>.  Kelsey,  184. 
Leadman  v.  Harris,  18. 
Leasure  ?'.  Coburn,  320. 
Leather  Cloth  Co.  v.  Amer.  Cloth  Co., 

59- 
Leavitt  v.  Beirne,  492. 

V.  Blatchford,  530. 
Leckey  v.  Cunningham,  666. 
Ledger  Bldg.  Assoc,  v.  Cook,  691. 


XXXViii  I^e/crcHces']         TABLE     OF     CASES.  [areioMset- 


Ledyard  v.  Butler,  394,  504. 
Lee  T.  Chase,  181. 
V.  Cole,  411,  412. 
V.  F\gg,  285,  286,  298. 
V.  Kilburn,  381,  382. 
V.  Lamprey,  388. 
V.  Lee,  219. 
V.  Pearce,  12. 
V.  Portwood,  629,  631. 
Leeds  v.  Cameron,  309. 
Leffel  V.  Schermerhorn,  336. 
Leffingwell  v.  Warren,  439. 
Lefils  V.  Sugg,  646. 
Le  Coaster  v.  Barthe,  107. 
Legro  V.  Lord,  25,  72. 
Lehigh  Coal  Co.  v.  Brown,  669. 
Lehman  v.  Kelly,  51. 

V.  Meyer,  231. 
V.  Rosengarten,  427. 
Lehmberg  v.  Biberstein,  169. 
Leicester  v.  Rose,  536. 
Leighton  v.  Orr,  23,  306. 
Leiman,  Matter  of,  185. 
Leisenring  v.  Black,  663. 
Leitch  V.  Hollister,  443,  466. 
Leland,  In  re,  184, 
Lemmon  v.  People,  212. 
Lenox  v.  Roberts,  467. 
Leonard  7a  Baker,  330. 
V.  Bryant,  376. 
V.  Clinton,  46,  47,  422. 
V.  Forcheimer,  245. 
V.  Green,  200. 
V.  Leonard,  653. 
Lerow  v.  Wilmarth,  149,  344,  540. 
Lesem  v.  Herriford,  361. 
Lesher  v.  Getman,  432. 
Lestapies  v.  Ligraham,  611. 
Leukener  v.  Freeman,  193. 
Lewis,  Matter  of,  428. 

V.  Caperton,  337. 

V.  Castleman,  169. 

V.  Hillman,  660,  663. 

V.  Jones,  666. 

V.  Miller,  427. 

V.  Palmer,  177. 

V.  Rogers,  118,  376. 

V.  St.    Albans     Iron    &    Steel 

Works,  228. 
V.  Smith,  99. 
V.  Wilcox,  364,  385. 
Lewis  &  Nelson's  Appeal,  610. 
Lichtenberg  7'.  Herdtfelder,   114,  117, 

122,  124,  534. 
Lidderdale  v.  Robinson,  276. 
Lighttoot  V.  Tenant,  595,  598. 
Lillard  v.  McGee,  32,  176,  193. 
Lillie  V.  Wilson,  108, 


Lillis  V.  Gallagher,  546. 

Lincoln  v.  Buckmaster,  647,  648,  705. 

Lindle  v.  Neville,  323. 

Lindley  v.  Cross,  135. 

Lindsay  v.  Cundy,  629. 

Lingan  v.  Henderson,  240. 

Lingke  v.  Wilkinson,  676. 

Lininger  v.  Herron,  342. 

V.  Raymond,  461. 
Linn  v.  Wright,  12. 
Linscott  V.  Mclntire,  603. 
Linton  v.  Butz,  365,  367. 
Lion,  The,  545. 
Lipperd  v.  Edwards,  214. 
Lippincott  v.  Evens,  494. 
Lishy  V.  Perry,  25. 
Litchfield  v.  Cud  worth,  679. 

V.  White,  452. 
Littauer  v.  Goldman,  624,  625. 
Littleton  v.  Littleton,  423,  424. 
Livermore  7/.  Boutelle,  145,  177. 

V.  McNair,  92. 

V.  Northrup,  434,  458, 

V.  Rhodes,  463. 
Livingston  v.  Livingston,  178. 
Livingston  County  v.  Darlington,  607. 
Lloyd  V.  Foley,  541. 

V.  Fulton,  23,  91,  III,  148,  299, 

344- 
V.  Passingham,  267. 
Load  V.  Green,  503. 
Loan  Association  7a  Topeka,  573,  607. 
Lobdell  V.  Baker,  625,  627. 

V.  Lobdell,  604. 
Lobstein  v.  Lehn,  271. 
Locke  V.  Lewis,  81. 

V.  Mabbett,  71. 
Lockhard  v.  Beckley,  10,  12,  24,  26,  49, 

158,  289. 
Lockyer  7/.  Savage,  491. 
Loder  r*.  Whelpley,  671. 
Loeschigk  v.  Addison,  153. 

V.  Bridge,  336,  337. 
Logan  V.  Brick,  13. 

V.  Logan,  90. 
London  &  N.  W.  Ry.  Co.  v.  Evershed, 

668. 
Long  V.  Dollarhide,  413. 

V.  Knapp,  367. 
Loomis  V.  Ruck,  668. 

V.  Spencer,  701. 
V.  Tifft,  125,  178,  545. 
Loos  V.  Wilkinson,  51,   185,  383,  384, 

433- 
Lord  V.  Harte,  48,  60. 
Lore  V.  Dierkes,  20,  179,  205,  273,  277, 

501.  503- 
Lorillard  v.  Clyde,  599. 


JJc/erences]        TABLE     OF    CASES.         [aretopagrs.  XXXlx 


Loring  v.  Dunning,  328. 
Lothrop  V.  Wightman,  679. 
Lott  V.  Kaiser,  192. 
Love  V.  Geyer,  262. 

V.  Mikals,  125. 
Lovett  V.  Gillender,  485,  487. 

7/.  Kingsland,  485,  487. 
Low  V.  Marco,  87. 

V.  Wortman,  342,  530. 
Lowell  V.  Boston,  607. 
Lower)-  v.  Clinton,  422. 
Lowry  v.  Beckner,  12. 

V.  Coulter,  183. 

V.  Pinson,  176. 

V.  Smith,  425,  504. 

V.  Tew,  407, 
Lozear  v.  Shields,  651. 
Lucas  V.  Brooks,  423. 
Luckey  v.  Roberts,  629. 
Ludlow  V.  McBride,  370. 
Ludwig  V.  Highley,  369. 
Lukins  v.  Aird,   18,   20,  27,  282,  334, 

378,  482. 
Lyell  V.  Supervisors  of  St.  Clair,  213. 
Lyford  v.  Thurston,  69. 
Lyles  V.  Bolles,  586, 
Lyman  v.  Fiske,  581. 

IK  Place,  207. 
Lynch  v.  Crary,  128. 

V.  Johnson,  93,  104,  105,  533. 
Lynde  v.  Budd,  684. 

V.  McGregor,  50,  103,  184,  321. 
Lynn  v.  Smith, '}']. 
Lyon  V.  Bertram,  705,  706, 
V.  Mitchell,  681. 
V.  Robbins,  619. 
V.  Yates,  617. 
Lytle  V.  Beveridge,  656,  657,  658. 

Mabry  v.  State,  577. 

Macdona  v.  Swiney,  352. 

Macgregor  v.  Dover  &  Deal  R.R.  Co., 

438,  439- 
Mackason's  Appeal,  63. 
Mackay  v.  Douglas,  161. 
Mackie  v.  Cairns,  466. 
Mackintosh  v.  Barber,  587. 
Maclae  v.  Sutherland,  675. 
Macomber  v.  Peck,  20,  378. 
Macungie  Sav.  Bank  v.  13astian,  212. 
Magawley's  Trust,  166. 
Magee  v.  Badger,  517. 
Magniac  v.  Thompson,  303,  414,  518. 
Maher  v.  Hibernia  Ins.  Co.,  217. 
Maiders  v.  Culver's  Assignee,  184. 
Main  v.  Lynch,  432. 
Malcolm  v.  Hodges,  15. 
Malony  v.  Horan,  425. 


Manahan  v.  Noyes,  705. 
Manby  v.  Scott,  2,  647. 
Manchester  v.  McKee,  121. 
Mancius  v.  Sergeant,  621. 
Mandel  v.  Peay,  433. 
Mandeville  v.  Reynolds,  118,  376. 
Mandlebaum  v.  ^IcDonnell,  486. 
Mangum  v.  Finucane,  412. 
Manhattan  Co.  v.  Evertson,  243,  504. 
Manley  v.  Rassiga,  185, 
Mann  v.  Betterly,  651. 
Manning  v.  Albee,  629. 

V.  Chambers,  491. 
V.  Hay  den,  404. 
V.  Johnson,  703. 
V.  Reilly,  281. 

V.  San  Jacinto  Tin  Co.,  521. 
Mansell  v.  Mansell,  69. 
Mansfield  v.  Dyer,  501,  587. 
Manton  v.  Moore,  349,  362. 
Manufacturing  Co.  v.  Bradley,  92,  98, 

114. 
Mapes  V.  Scott,  267. 
Maples  V.  Wightman,  641. 
Marcy  v.  Kinney,  108. 
Marden  v.  Babcock,  287. 
Mark's  Appeal,  456. 
Marksbury  v.  Taylor,  12,  80. 
Marlatt  v.  Warwick.  593. 
Marnn  v.  Marrin,  252. 
Marriott  TA  Givens,  321. 
Marsh,  Matter  of,  429. 

V.  Bennett,  431. 

V.  Benson,  45. 

V.  Burroughs,  56,  69,  175,  205. 

V.  City  of  Brooklyn,  576. 

V.  Dunckel,  379. 

V.  Falker,  8,  9. 

V.  Fulton    County,    569,     586, 

673. 
V.  Pier,  118. 
V.  Whitmore,  599. 
Marshall  7/.  Carson.  658. 

V.  Croom,  50,  162,  342,  343. 
V.  Green,  315.  340. 
V.  Means,  227. 
Marston  v.  V'ultee,  292. 
^Lartin  7'.  Adams,  366. 
7'.  Barron,  581. 
V.  Bolton.  179. 
V.  Crosby,  73. 
V.  Eitlen,  131. 
V.  Hausman,  458. 
V.  Margham,49l. 
V.  Martin,  612. 
V.  Mayo,  691. 
V.  Michael,  114,  1 16,  127. 
V.  Root,  66,  179. 


xl 


Jie/ere>ices']        TABLE     UF     CASES.         [a-^foM^<^s. 


Martin  v.  Smith,  224. 

V.  Tidvvell,  92,  98. 
V.  Walker,  145,  177. 
Martindale  v.  Booth,  352. 
Marx  V.  McGlynn,  671. 

V.  Tailer,  205,  206. 
Mason  v.  Lord,  195. 

V.  Pierron,  255. 
Massie  v.  Watts,  61. 
Masterton  v.  Beers,  280. 
Mateer  i'.  Hissim,  344. 
Mathes  v.  Dobschuetz,  50,  283. 
Mathews  v.  Cowan,  644. 

7A  Feaver,  301,  325. 
7/.  Poultney,  432,  434. 
Matson  v.  Melchor,  147. 
Matthai  v.  Heather,  6,  162. 
Matthews  v.  Rice,  283. 
Matthewson  v.  Johnson,  693. 
Matthiessen  &  W.  Ref'g  Co.  v.  McMa- 

hon,  705. 
Matlingly  v.  Nye,  118,  163,  421. 
Maule  V.  Rider,  521. 
Mawman  v.  Tegg,  61. 
Maxwell  v.  Goetschius,  573. 

V.  Kennedy,  400. 
May  v.  Greenhill,  265. 
v.  Le  Claire,  522. 
V.  Walker,  443. 
Mayer  v.  Clark,  83,  354,  356. 

v.  Hellman,  460,  530,  531. 
7A  Webster,  363. 
Maynes  v.  Atwater,  370. 
Mayor  of  Baltimore  v.  Lefferman,  670. 
Brooklyn  z/.  Meserole,  708. 
Norwich  v.  Norfolk  R.R.  Co., 

599- 
Mays  V.  Cincinnati,  670. 

V.  Rose,  267. 
Mc Alpine  v.  Sweetser,  555. 
McArtee  7/.  Engart,  233. 
Mc  Arthur  v.  Hoysradt,  54,  271. 
McAuliffe  V,  Farmer,  1 14. 
McBeth  V.  Trabue,  696. 
McBlair  v.  Gibbes,  611. 
McBurney  zk  Wellman,  334. 
McBurnie,  Ex  parte,  304,  418. 
McCabe  v.  Brayton,  393. 
McCaffrey  v.  Hickey,  267. 
McCain  v.  Wood,  311. 
McCall's  Lessee  v.  Carpenter,  586. 
McCalmont  v.  Lawrence,  140, 141,  171, 

250. 
McCampbell  v.  McCampbell,  601,  604. 
McCanless  v.  Flinchum,  299. 
McCardle,  Ex  parte,  574. 
McCarron  v.  Cassidy,  334. 
McCarthy  v.  Goold,  55. 


McCartin  v.  Pcrr>',  183. 

McCartney  v.  Bostwick,  90,  123,  131, 

132,  140. 
McCarty  v.  Murray,  641,  690. 
McCaskle  v.  Amarine,  311. 
McCauley  v.  Rodes,  234. 
McClearyt/.  £1115,485. 
McCleery  v.  Allen,  450. 
McClellan  v.  Sanford,  10. 
McClelland  v.  Whiteley,  674. 
McCleskey  v.  Leadbetter,  541. 
McCloskey  v.  Cyphert,  637. 
McClosky  V.  Stewart,  51. 
McClure  v.  Miller,  587. 
McClurg  V.  Lecky,  442. 
McCole  V.  Loehr,  219. 
McConnel  v.  Dickson,  178. 
McConnell?7.  Scott,  178. 

V.  Sherwood,  436,  455. 
McCool  V.  McNamara,  267. 
McCormick  v.  Atkinson,  28. 
V.  Hyatt,  283. 
V.  Littler,  652. 
McCracken  v.  City  of  San   Francisco, 

570. 
McCrasly  v.  Hasslock,  471. 
McCreight  v.  Aiken,  653. 
McCue  V.  Smith,  603. 
McCulloch  V.  Hutchinson,  38. 
McCullough  V.  Colby,  139,  140. 

V.  Gilmore,  486. 
McDermott  v.  Blois,  1 14. 
McDermutt  7/.  Strong,  106,  135,  173. 
McDonald  v.  Farrell,  345. 

V.  Mayor,  687. 
McDonnell  v.  Eaton,  227. 
McDonogh  v.  Murdoch,  485. 
McDougall  V.  Page,  100,  406. 
McDowell  V.  Brown,  485. 

V.  Cochran,  133. 

V.  Goldsmith,  118. 

V.  Rissell,  389. 
McElmoyle  v.  Cohen,  124. 
McElwain  7/.  Willis,  116,  137,  138,  139, 

215. 
McEvoy  V.  Appleby,  70. 
McFadden  v.  Mitchell,  149,  326,  328. 
McFarland  v.  Goodman,  25,  75. 
McFarlane  7'.  Griffith,  iii. 
McFerran  v.  Jones,  55. 
McGan  v.  Marshall,  636. 
McGay  v.  Keilback,  66. 
McGee  v.  McGee,  423. 
McGintry  v.  Reeves,  311. 
McGoldrick  v.  Slevin,  265. 
V.  Willits,  632. 
McGraw,  Matter  of,  568. 
McGuire  v.  Miller,  541. 


Jie/^renres'j         TABLE     OF     CASES.  [arc  io ^a^es. 


xh 


Mcllvaine  v.  Smith,  53. 
Mcintosh  V.  Ladd,  424. 
McKay  v.  Carrington,  621. 
McKee  v.  Cheney,  68  r. 

Vi  Judd,  429. 
McKibbin  z'.  Martin,  22,   24,  318,  340, 

357.  365.  367. 
McKim  zj.  Thompson,  240. 
McKinley  v.  Bowe,  114. 
McKinnon   v.    Reliance   Lumber   Co., 

384. 
McKinster  v.  Babcock,  312,  321. 
McKnight  7'.  City  otPiltsburgh.eS;. 

V.  Morgan,  179. 
McKown  7'.  Fiirgason,  379. 
7/.  Whitmore,  224. 
McLachlan  v.  Wright,  470. 
McLain  7/.  Ferrell,  224. 
McLane  v.  Johnson,  155,  179,  384. 

7'.  Spence,  659. 
McLaughlin  7/.  McLaughlin,  178. 
McLean  v.  Cary,  248,  258. 

7A  Lafayette  Bank,  226,  473. 
V.  Letchford,  245,  274. 
77.  Weeks,  37. 
McLendon  7/.  Commrs.  of  Anson,  136. 
McLeod  V.  First  Nat.  Bank,  69. 
McMahan  v.  Bowe,  25. 
McMahon  v.  Allen,  184,  196. 
McMaster  7/.  Campbell,  183,  542,  587. 

V.  Morrison,  485. 
McMillan  v.  McNeill,  405,  406. 
McMinn  v.  Whelan,  114,  127. 
McMurray  v.  McMurray,  639. 
McMurtry  v.  Ramsey,  599. 
McNulty  7'.  Batty,  574. 
McPherson  v.  Cox,  667,  668. 

V.  Kingsbaker,  154,  162. 
McRea  7'.  Branch  Bank  of  Ala.,  336. 
McReynolds  7^  Dedman,  440. 
McVeigh  7'.  Ritenour,  145. 
McVicker  v.  May,  342. 
McWilliams  7'.  Rodgers,  331. 
Meacham  v.  Sternes,  431. 
Mead  v.  Byington,  658,  659. 
V.  Combs,  281,  600. 
V.  Gardiner,  355. 
V.  Noyes,  338,  362. 
V.  Phillips,  431. 
Meade  v.  Smith,  357,  363. 
Meader  v.  Norton,  397. 
Means  7/.  Dowd,  21,    27,   28,  440,  471, 

475- 
7/.  Hicks,  375. 
7'.  Robinson,  577. 
I\Iears  v.  Waples,  630,  631. 
Mebane  7'.  La\ton,  173. 

V.  Mebane,  53,  497. 


Mechanics'  &  T.  Bank  7-.  Dakin,  89, 

138. 
Meddowcroft  v.  Huguenin,  23. 
Medsker  7^.  Bonebrake,  411. 
Meeker  z/.  Harris,  118,  121,  216,  376. 
7\  Saunders,  341. 
v.  Wilson,  351. 
V.  Winthrop  Iron  Co.,  657. 
Megehe  v.  Draper,  75. 
Meguire  v.  Corwine,  597,  600. 
Mehlhop  v.  Pettibone,  283,  377, 
Melville  7'.  Brown,  127. 
Menagh  7/.  Whitwell,  270,  30S. 
Menton  v.  Adams,  532. 
Menzies  T/.  Pulbrook,  196. 
Mercer  7/.  Mercer,  540. 

V.  Newsom,  658,  659  . 
7'.  Peterson,  538. 
Merchant  7/.  Bunnell,  415. 
Merchants'  Bank  v.  Thomson,  99,  425. 
Merchants'  E.xch.  Nat.  Bank  v.  Comml. 

Warehouse  Co  ,  397. 
Merchants'  Nat.   Bank  7'.  Paine,  117, 

124,  134,  135. 
Meredith  7^  Johns,  97. 
Merithew  v.  Andrews,  605. 
Merrell  7a  Johnson,  149,  214.  219,  277. 
Merriam  v.  Cunningham,  645,  646. 

V.  Sewall.  128. 
Merrick  7'.  Butler,  544. 
Merrill  v.  Englesby,  430.  619. 
V.  Grinnell,  429. 
V.  Locke,  328,  336,  369. 
7'.  Melchior,  599. 
Merritt  7>.  Millard,  593,  608,  610. 
Merry  v.  Fremon,   125,   133,  17S.  201. 

208,  545. 
Merwin  t.  Richardson,  176. 
Messersmith  7'.  Sharon  Sav.  Bank.  107. 
Metcalf  7'.  Munson,  38 1,  382. 
Metropolitan  Bank  7/.  Durant,  252.328, 
396- 
7'.  Godfrey,  504. 
Metropolitan  Life  Ins.  Co.  7-.  Meeker, 

667. 
Meux  7'.  Anihony,  113,  135.  142. 

7'.  Howell,  326. 
Meyer  ?'.  Lowell,  68. 

7'.  Virginia  &  T.  R.R.  Co.,  3S5. 
Michael  7'.  Ga\.  244. 
Michigan  7'.  Pha-nix  Bank.  392. 
Michoud  7'.  (iirod,  405,  660,  679. 
Micou  7'.  Moses,  264.  268. 

7'.  National  Hank,  532. 
Middlebury  College  ?-.  Chandler,  647. 
Middleton  7-.  Mullica,  607. 
Middletown  Sav.  Bank  7'.  Bacharach, 
226. 


xlii 


lie/erences'^        TABLE    OF    CASES,         [areio/a£ts. 


Miers  v.  Zanesville  &  M.  Turnp.  Co., 

^     56,  534- 
Miles  V.  Barry,  403, 
z'.  Chilton,  612. 
V.  Edelen,  390. 
V.  Ervin,  664. 
V.  Miles,  240. 
V.  Wheeler,  659. 
Miller  v.  Adams,  619. 
V.  Ball,  605, 
V.  Brj'an,  283. 
V.  Craig-,  651. 
V.  Davidson,  107,  135. 
V.  Daj'ton,  104,  145. 
V.  Earle,  252. 
V.  Florer,  67. 
V.  Fraley,  243. 
V.  Carman,  364. 
V.  Hall,  198,  199,  200,  202,  209. 
V.  Jamison,  197,  232. 
V.  Jones,  476,  482. 
V.  Lockwood,  321,  355,  478. 
V.  Long  Island  R.R.  Co.,  362, 
V.  Mackenzie,  187. 
V.  Marckle,  594. 
V.  McCoy,  312. 
v.  Mclntyre,  405. 
V.  McKenzie,  313. 
V.  Miller,  37,  114,  168. 
ads.  Pancoast,  351,  356,  362, 475. 
V.  Post,  438,  439. 
V.  Potter,  653. 
V.  Sauerbier,  309. 
V.  Sherry,  104,  233,  234,  559. 
TA  Smith,  639,  691,  703. 
V.  Wilson,  344,  424, 
Millholland  v.  Tiffany,  518,  520. 
Milling-ton  zk  Hill,  271,  272,  503. 
Mills  v.  Argall,  541. 

V.  Block,  loi,  114,  127,  135, 
V.  Gore,  240. 
V.  Howeth,  519. 
V,  Thompson,  386. 
V.  Van  Voorhies,  no. 
Milne  v.  Van  Buskirk,  581. 
Milwaukee  &  M.  R.R.  Co.  v.  Milwau- 
kee &  W.  R.R.  Co.,  196. 
Miner  v.  Phillips,  294. 
7'.  Warner,  145. 
Minor  v.  .Mead,  181. 
Mitchell  z'.  Barnes,  267. 
V.  Bunch,  559. 
V.  Kinsman,  648. 
V.  Stetson,  28. 
z/.  Stiles,  253. 
V.  Thompson,  403. 
V.  Van  Buren,  252. 
V.  West,  356,  368. 


Mitchell  V.  Winslow,  184,  475. 

V.  Worden,  630. 
Mittelholzer  v.  Fullarton,  599. 
Mittnacht  v.  Kelly,  472. 
Mobley  v.  Letts,  470. 
Mohawk   Bank  v.   At  water,    14,   140, 

285,  298. 
Mohney  v.  Evans,  647. 
Mohr  V.  Tulip,  653. 
Molitor  z/.  Robinson,  356,  390. 
Molton  V,  Camroux,  649,  702. 
Moncure  v.  Hanson,  184. 
Monell  V.  Scherrick,  324. 
Monroe  v.  Douglass,  loi. 

V.  Hussey,  351,  357. 
V.  Smith,  169,  290. 
Montefiore  v,  Behrens,  491. 
Montefiori  v.  Montefiori,  542. 
Monteith  v.  Bax,  16,  280,  291,  414. 
Montgomery  v.  Carlton,  639. 
V.  Gordon,  696. 
V.  Kirksey,  457. 
Monumental  Bldg.  Assoc,  v.  Herman, 

698. 
Moody  V.  Blake,  631. 
V.  Burton,  96. 
Moog  V.  Benedicks,  323,  356. 

V.  Farley,  342. 
Mooney  v.  Olsen,  348,  370. 
Moore  v.  Blondheim,  162. 

V.  Cord,  194. 

V.  Eastman,  644. 

V.  Greene,  22,:i,  402. 

V.  Griffin,  465, 

V.  Hershey,  649, 

V.  Hinnant,  2S1, 

V.  Kidder,  83. 

V.  Meacham,  383. 

V.  Moore,  657,  660,  661. 

V.  Page,  409,  416,  419. 

V.  Roe,  335,  345. 

V,  Schoppert,  116. 

V.  Williamson,  513. 

V.  Wood,  14,  19,  378, 
Moores  v.  White,  56. 
Moorman  z'.  Shockney,  216. 
Moran  v.  Dawes,  81,  116. 
Moreland  v.  Atchison,  301. 
Morford  v.  Dieffenbacker,  340. 
Morgan  v.  Bogue,  137,  220,  442. 
v.  Elam,  23. 
V.  Harris,  241. 
V.  Hecker,  291. 
Morgan  County  v.  Allen,  107, 
Moritz  V.  Hoffman,  149,  166,  168. 
Morland  v.  Isaac,  422. 
Morning  zf.  Knop,  685. 
Morrill  V.  Aden,  644. 


Iie/<!rtnces'j        TABLE     OF    CASES.         [^ar,  io/ages. 


xliii 


Morris  v.  Morris,  179. 
V.  Tillson,  313. 
Morrison  v.  Abbott,  75. 

V.  Atwell,  146,  171,  192. 
7A  Clark,  344,  421, 
V.  Lovell,  625. 
V.  Morrison,  145,  177,  193. 
Morrow  v.  Rees,  705. 
Morse  v.  Presby,  586. 
V.  Riblet,  no. 
Morton  v.  Noble,  425. 

V.  Ragan,  25,  358. 
V.  Weil,  228. 
Morville  v.  Amcr.  Tract  Soc,  606,  608. 
Moseley  7/.  Anderson,  75. 
V.  Buck,  661. 
V.  Moseley,  171,  179,  191,  545, 

547. 
Moses  V.  Moses,  659. 
Motley  V.  Downman,  59. 

V.  Sawyer,  327,  328. 
Mott  V.  Danforth,  97. 
Motteux  7/.  St.  Aubin,  690. 
I\Iotz  V.  Mitchell,  668. 
Mountcashell  7'.  Barber,  675. 
Mountford  v.  Taylor,  221. 
Mount  Holly  v.  Andover,  611. 
Movvrey  v.  Walsh,  629. 
Movvry  v.  Schroder,  96. 
Moyce  v.  Newington,  629. 
Moyer  v.  Dewey.  182,  183,  186. 
Muggeridge's  Trusts,  Ji(%  491. 
Mulford  V.  Peterson,  39,  79,  87. 

V.  Shirk,  73,  441. 
Mullanphy  Sav.  Bank  v.  Lyle,  528. 
Mullen  V.   Wilson,  149,  158,  162,  164, 

290. 
Muller  V.  Inderreiden,  25,  75. 
Mulloy  7'.  Young,  610. 
Multnomah  St.  Ry.  Co.  v.  Harris,  140. 
Mumper  v.  Rushinore,  355. 
Munger  v.  Hess,  644. 

7/.  Perkins,  425. 
Munn  7A  Marsh,  208. 
Munro  v.  Alaire,  465. 
Munson  v.  Washband,  647. 
Murphy,  /u  re,  491. 

V.  Briggs,  211,  253,  276,  278, 

501.  504,  530. 
V.  Crouch,  25. 
7'.  Hubert,  554,  592,  593. 
Murray  v.  Ballou,  235, 

V.  Burtis,  291. 

V.  Hay,  172. 

V.  Judson,  397. 

V.  Riggs,  481,  529. 

V.  Rottenham,  406. 

V.  Walker,  334. 


Murtha  v.  Curley,  232,  257. 
Musselman  v.  Cravens,  654. 

V.  Kent,  90. 
Mustard  v.  Wohlford,  642.  693,  699. 
Mutual  Life  Ins.  Co.  v.  Bowen,  98. 
Myers  v.  Becker,  254. 

V.  Estell,  268. 

V.  Fenn,  175. 

V.  Harvey,  371. 

V.  Meinrath,  600. 

V.  Myers,  658. 

V.  Sherift",  7,  216. 
Mygatt  7^.  Washburn,  581. 

Naglee's  Appeal,  485. 

Nail  V.  Punter,  63. 

Nairn  v.  Prowse,  303. 

Nantes  v.  Corrock.  48,  55. 

Nantz  V.  McPherson,  518. 

Nathans  v.  Arkwright,  693,  694. 

National  Bank  v.  Carpenter,  223,  400. 

V.  Insurance  Co.,  69. 
National  Bank  of  Metropolis  v.  Sprague, 

i6r. 
National  Bank  of  Rondout  v.  Dreyfus, 

115. 
National  Park  Bank  v.  Lanahan,  89. 

V.  Whitmorc,  462,  537. 
National  Trust  Co.  v.  Miller,  190. 

V.  Murphy,  190. 
Neal  V.  Clark,  270. 

V.  Williams,  37,  631. 
Neale  v.  Day,  53. 

V.  Neales,  233,  605. 
Neate  v.  Marlborough,  103. 
Neely  v.  Jones,  175. 
Neisler  v.  Harris,  292. 
Nellis  V.  Clark,  30,  544.  546,  592,  593, 

599- 
Nelson  v.  Duncombe,  652. 

V.  Eaton,  691. 

V.  Edwards,  467. 

V.  Henr)-.  332. 

7'.  Smith,  379. 
Nerac,  Matter  of,  48. 
Nesbit  7'.  Lockmnn,  663,  664. 
Neslin  7'.  Wells,  333. 
Neusbaum  v.  Keim,  121. 
Neville  i'.  Wilkinson,  542. 
New  7/.  Bame,  266. 
New  Albany  v.  Burke,  188,  522. 
New  Albany  Ins.  Co.  v.  Wilcoxson,  356. 
Newark  7/.  Funk.  48,  56. 
Newdigate  v.  Jacobs,  120,  121. 
Newell  V.  Cutler,  95. 

V.  Newell,  541. 

7'.  Wheeler,  576. 
New  Hamp.  Ins.  Co.  v.  Noyes,  647. 


xliv 


^TcArcw^j]        TABLE     OF     CASES.         [are  io Mses. 


Nevvkerk  v.  Newkerk,  485. 
Newland,  7?^,  422. 
Nevvlin  v.  Lyon,  387,  388. 
Newman  z\  Cordell,  10,  13,  220,  280, 
340. 
•cA  Milner,  707. 
V.  Van  Duyne,  214. 
V.  Willetts,  105,  137,  140. 
Newton  v  Bronson,  558. 

V.  Hammond,  697. 
N.  Y.  Central  Ins.  Co.  v.  National  Pro- 
tection Ins.  Co.,  661. 
N.  Y.  Guaranty,  etc.,  Co.  v.  Gleason, 

388,  389. 
N.  Y.  Life  Ins.  Co.  v.  Mayer,  248. 
N.  Y.  &  Harlem    R.R.  Co.  v.    Kyle, 

376. 
N.    Y.   &   New  Haven    R.R.    Co.    v. 

Schuyler,  208,  576. 
Nichol  7K  Thomas,  704. 
Nicholas  v.  Murray,  182. 
Nichols  v.  Cabe,  610. 

v.  Eaton,  48,  54,  70,  71,  72,  74, 
488,  489,  491,   492,  494, 

495.  497. 
7A  Lew,  48,  52,  53,  no,     .8. 
ZK  McL-artiiy,  546,  547. 
zf.  McEwen,  453,  463. 
V.  Michael,  629,  630. 
v.  Patten,  6,  ;,7,  366,  541. 
V.  Pinner,  220,  630. 
V.  Steger,  646. 
2'.  Voorhis,  575. 
Nicholson  zk  Leavitt,  21,  428,  431,  442, 

449.  479- 
Nickel!  z'.  Handly,  492. 
Nicol  V.  Crittenden,  9,  16,  505. 
NicoU  V.  Boyd,  268,  269. 

V.  Spowers,  430. 
Niell  V.  Morley,  701. 
Nightingale  v.  Harris,  436. 

7/.  Withington,  641 
Nimmo  v.  Kuykendall,  28c. 
Nininger  v.  Knox,  380,  381. 
Nippes'  Appeal,  46,  422. 
Niver  v.  Crane,  87. 
Nixon  z'.  Palmer,  675. 
Noble  V.  Hines,  219,  407. 

V.  Holmes,  116,  127. 

V.  Noble,  541. 
Noice  V.  Brown,  599. 
Noonan  v.  Lee,  216. 
Norcum  v.  Sheahan,  693. 
Norcutt  z>.  Dodd,  42,  47. 
Norris  7/.  Wait,  695,  697. 
North  V.  Bradway,  84,  172,  198,  229. 
North  Amer.  Fire  Ins.  Co.  ?/.  Graham, 
124,  126,  139,  140. 


Northern  Liberties  v.  St.  John's  Church, 

606. 
Northern  Pacific  R.R.  Co.  v.  Kindred, 

660. 
Northington,  Ex  parte,  652. 
Northwestern  Ins.  Co.  v.  Elliott,  608. 
Norton  v.  Doolittle,  357,  364. 

V.  Norton,  166,  167,  179. 
Noyes  v.  Morrill,  386. 
Nuckolls  V.  Pinkston,  380. 
Nudd  V.  Hamblin,  224. 
Nunn  V.  Wilsmore,  326. 
Nussear  v.  Arnold,  665. 

Oakes  v.  Turquand,  588. 
Gates  V.  Hudson,  669. 
Oatis  zi.  Brown,  386,  387. 
Oberholser  v.  Greenfield,  81. 
O'Brien  v.  Chamberlain,  371. 

V.  Coulter,  125,  134,  135. 
Ocean  Nat.  Bank  v.  Olcott,  87,   128, 

130.  132,  140. 
Ockerman  v.  Cross,  100,  467. 
O'Conner  7/.  Ward,  28,  72,  75,  550. 
'  )'Daniel  v.  Crawford,  167. 
•  dell  V.  Flood,  416. 

V.  Montross,  334. 
O'Donnell  v.  Segar,  12,  74. 
Oelrichs  v.  Spain,  92,  98,  142. 
Offutt  V.  King,  125,  180. 
Ogden  V.  Arnot,  187. 

V.  Peters,  446,  459. 

V.  Prentice,  144. 

V.  Saunders,  405. 

V.  Wood,  69. 
Ogilvie  V.  Jeaffreson,  589. 

7'.  Knox  Ins.  Co.,  56,  190. 
Olcott  V.  Tioga  R.R.  Co.,  587. 
Old  Dominion  S.  S.  Co.  v.  Burckhardt, 

631. 
Old  Folks'  Society  v.  Millard,  248. 
Oldham  v.  Oldham,  491. 
Oliver  v.  Houdlet,  572,  689,  690. 

V.  Moore,  272,  313. 

v.  Piatt,  69,  226,  525. 
Oliver  Lee  &  Co.'s  Bank  v.  Talcott, 

18,  27. 
Olney  T'.  Tanner,  185,  1S6,  189,  455. 
O'Mahoney  z>.  Belmont,  270. 
Onions  v.  Cohen,  575. 
Ontario  Bank  v.  Root,  217. 
Ordendorf  7'.  Budlong,  78,  88,  195. 
Oriental  Bank  v.  Haskins,  334,  545. 
Orleans  v.  Piatt,  626. 
Orr  ZK  Gihnore,  250. 
Orton  7'.  Orton,  470. 
Osborne  7'.  County  of  Adams,  607. 
V.  TuUer,  357. 


He/ere/ice^         TABLE     OF     CASES.         [are  to ^ag^es. 


x\v 


Osborne  v.  Williams,  548,  550. 
Osen  V.  Sherman,  356,  361. 
Osgood  V.  Lay  tin,  185,  188. 
V.  Ogden,  187,  188. 
V.  Thome,  530. 
Osmond  v.  Fitzroy,  649. 
Otis  V.  Cullum,  626. 

V.  Sill,  361. 
Otley  V.  Manning,  23. 
Ottawa  V.  Carey,  607. 

V.  National  Bank,  607. 
Oulds  v.  Sansom,  639. 
Overman  v.  Quick,  479. 
Overman's  Appeal,  498. 
Overton  v.  Banister,  697. 

V.  Holinshade,  324. 
Owen  V.  Arvis,  340,  434. 
V.  Body,  447. 
V.  Long,  642. 
Owens  V.  Missionary  Society,  572. 
Ovving's  Case,  567. 
Owings  V.  Hull,  674. 
Oxley  V.  Tryon,  639. 

Pace  V.  Pace,  495. 
Pacific  Bank  v.  Robinson,  61. 
Pack  V.  Bathurst,  63,  64. 
Packard  v.  Wood,  352,  354. 
Paddon  v.  Taylor,  501,  503,  630,  631. 
Page  V.  Waring,  183,  506. 
Paget  V.  Perchard,  470. 
Paliquioque  Bank  7/.  Bethel  Bank,  208. 
Paige  V.  Cagvvin,  384. 
V.  O'Neal,  631. 
Painter  v.  Drum,  390. 

z'.  Henderson,  678. 
Palen  v.  Bushnell,  85. 
Palmer  z*.  Foley,  619. 

V.  Goodwin,  405. 
V.  Miller,  642. 
V.  Whitmore,  63. 
Pancoast  v.  Gowen,  58. 
Parduc  v.  Givens,  4S5. 
Parish  v.  Murphree,  149,  151. 
Parker  v.  Baker,  690. 

V.  Browning,  187. 
V.  Byrnes,  630. 

V.  Conner,  501,  506,  508,  509, 
513.  5'5.   517,   519.   520. 
524. 
V.  Flagg,  179,  229. 
V.  Phettcplace,  in,  394. 
Parkersburg  7^.  Brown,  573,  601,  606, 

607,  608. 
Parkhurst  7/.  Hosford,  634. 

V.  McGraw.  6,  232,  238,  395. 
Parkinson  v.  Trousdale,  269. 
Parkman  v.  Welch,  155,  156,  239,  242. 


Parks  V.  Evansville,  etc.,  R.R.  Co.,  688. 

V.  Parks,  466. 
Parshall  v.  Eggert,  480. 
Parsons  v.  Bowne,  235. 

V.  Dickinson,  352. 
7'.  Hill,  691. 
V.  Keys,  646. 
7/.  Lloyd,  618. 
V.  Loyd,  615. 
V.  Thompson,  596. 
Partee  v.  Mathews,  81,  88,  140. 
Partelo  v.  Harris,  283. 
Parton  v.  Hervey,  438,  439. 
Partridge  v.  Gopp,  33,  66,  86,  302. 
V.  Messer,  597. 
7'.  Stokes,  158,  290. 
Pan^in  v.  Capewell,  420. 
Paschal  v.  Acklin,  558. 
PashbyT/.  Mandigo,  178. 
Passavant  v.  Cantor,  243,  427. 
Patrick  v.  Grant,  599. 
Patten  v.  Casey,  281,  344. 

7'.  Smith,  75. 
Patterson,  Matter  of,  666. 

V.  Bodenhamer,  323. 
V.  Brown,  534. 
7/.  Gaines,  61 1,  612. 
V.  Lynde,  200. 
V.  McKinney,  149.  258,  344. 
V.  Todd,  624. 
Patten  V.  Conn,  410. 

V.  Taylor,  216. 
Paul  7f.  Crooker,  378. 
Paulk  V.  Cooke,  166. 
Paulling  V.  Slurgus,  369. 
Paulsen  7>.  Van  Steenbergh,  115. 
Pawle  V.  Gunn,  601 ,  603. 
Pawley  7/.  Vogel,  164. 
Paxton  V.  Boyce,  9. 
Payne  v.  Becker,  54.  95. 
7'.  Drewe,  1 1 1. 
V.  Eden,  536, 
v.  Graham,  107. 
7/.  Hook,  189. 
V.  Miller,  422. 
7'.  Sheldon,  133.  140,  215. 
V.  Stanton,  159,  166. 
Payson  7'.  Hadduck.  209. 
Pcakc  7'.  Stout,  294. 
Pearce  7'.  Creswick,  92. 
Pearl  v.  McDowell,  653. 
Ptarse  7'.  Morrice,  566. 
Pearsoll  7'.  Chai)in,  566,  572.  575,  578. 

5S6,  589.619. 
Pearson  v.  Carter,  357. 
7.  Howe,  515. 
Pease  7'.  Crcque,  675. 
V.  Walsh,  592. 


xlvi 


Ke/erencesj        TABLE     OF    CASES.         \_afeiojiiiges. 


Peaslee  v.  Barney,  178. 

Peay  7/.  Morrison's  Ex'rs,  135. 

Peck  V.  Burr,  438,  439,  592. 

V.  Gary,  665,  666. 

V.  Grouse,  291,  432. 

V.  Hibbarcl,  405. 
Peckham  v.  Haddock,  599. 
Peebles  v.  Horton,  318,  321,  340. 
Peet  V.  Morgan,  107. 
Peirce  v.  Partridge,  322. 
Peirsoll  v.  Elliott,  708. 
Peiser  v.  Peticolas,  16,  292,  470, 
Pelham  v.  Aldrich,  144, 
Pence  7/.  Croan,  148,  150. 
Pendleton  7^.  Hughes,  145,  193. 

V.  Perkins,  48,  55,  113,  134, 

135- 
Penn  v.  Lord  Baltimore,  558. 
Pennell  v.  Deffell,  69. 
Pennington  v.  Cardale,  621. 
V.  Clifton,  87. 
.  V.  Seal,  38,  42,  144,  178, 

Pennock  o.  Freeman,  403. 
Penrod  v.  Morrison,  97. 
People  V.  Albany  &  Vt.  R.R.  Co.,  205. 

V.  Baker,  294. 

V.  Bristol,  475. 

V.  Cavanagh,  614. 

v.  Cook,  280. 

{ex    rel.   Hoyt)   v.    Comrs.    of 
Taxes,  100. 

V.  Kelly,  270. 

V.  Kendall,  644. 

V.  Liscomb,  614. 

V.  McLeod,  614. 

V.  Mead,  93. 

V.  Open  Board  of  Brokers,  660, 
688. 

V.  Rogers,  667. 

V.  Supervisors,  581. 

V.  Tioga  Common  Pleas,  429. 

V.  Young   Men's,  etc.,  Society, 
672. 
People's  Sav.  I3ank  v.  Bates,  114,  133. 
Pepper  z/.  Carter,  159,  166. 
Perkins  ■y.  Center,  218. 

V.  Hays,  496. 

V.  Kendall,  121. 

V.  Perkins,  344,  421. 

V.  Sanders,  200. 

V.  White,  624. 
Perrett's  Case,  688. 
Perrin  v.  Wilson,  646. 
Perry  v.  Corby,  458. 
V.  Ensley,  263. 
V.  Meddowcroft,  23. 
Person  v.  Chase,  639,  691. 

V.  Warren,  651. 


Persse,  In  re,  652. 
Peters  7/.  Goodrich,  507. 

V.  Light,  51. 
Peterson  v.  Brown,  541,  553,  554. 

V.  Mayor,  etc.,  687. 
Petrie  v.  Han  nay,  609. 

V.  Shoemaker,  651. 
Pettee  v.  Dustin,  481. 
Pettibone  v.  Stevens,  23. 
Pettit  V.  Shepherd,  575. 
Petty  V.  Petty,  no,  423. 
Peyton  v.  Lamar,  81, 

V.  Rose,  84. 
Pfohl  V.  Simpson,  175. 
Phalen  v.  Clark,  224,  608. 
Pharis  v.  Leachman,  208. 
Phelan  v.  Boylan,  195, 

V.  Kelly,  370. 
Phelps  V.  Borland,  405, 

V.  Curts,  19,  182. 

V.  Foster,  81,  82. 

V.  McDonald,  182,  183,  559, 

V.  Piatt,  125,  179. 

V.  Worcester,  647. 
Phettiplace  v.  Sayles,  1 50,  368. 
Philbrook  v.  Belknap,  604, 

V.  Eaton,  352. 
Philips  V.  Green,  693,  697. 
Phillips  V.  Frye,  410. 

V.  Mullings,  64. 
V.  Negley,  400. 
V.  Reitz,  356. 

V.  Wooster,  151,  163,  165,  553. 
Philpot  V.  Bingham,  636,  640. 
Phinizy  v.  Clark,  318,  334. 
Phipps  V.  Sedgwick,  69,  259,  418. 
Phoenix  Bank  v.  Stafford,  164. 
Phoenix  Ins.  Co.,  Ex  parte,  560. 
Pickett  z'.  Pipkin,  216,  323. 
Pickler  v.  State,  641, 
Pickstock  V.  Lyster,  288,  460. 
Piddock  V.  Brown,  378, 
Pier  V.  Dufif,  385. 
Pierce  x/.  Brew,  313. 

z/.  Hill,  51. 

V.  Hoffman,  393. 

V.  Milwaukee    Constr.    Co.,    56, 

174.  190- 
V.  Pierce,  665,  666. 
Piercy  v.  Roberts,  53. 
Pike  V.  Bacon,  21,  461. 

V.  Miles,  25,  72. 
Pilling  V.  Armitage,  240. 

■V.  Otis,  21,  318,339. 
Pillsbury  v.  Kingon,  184. 
Pimental  v.  City  of  San  Francisco,  606. 
Pinckard  v.  Woods,  512. 
Pinckney  v.  Pinckney,  682. 


J^e/erence/^         TABLE     OF     CASES.         [are  io /ajsrs. 


xlvii 


Pinckston  v.  Brown,  547,  550. 

Pine  V.  Rikert,  464. 

Pinnock  v.  Clough,  661. 

Piper  z/.  Johnston,  75,  76. 

Pitney  v.  Leonard,  507. 

Pitts  V.  Wilder,  553. 

Pittsburgh  &  S.  R.R.  Co.  v.  Gazzam, 

674. 
Pixley  V.  Huggins,  576. 
Place  V.  Langworthy,  470. 

V.  Minster,  389. 
Planck  V.  Schermerhorn,  431. 
Planters'  Bank  7/.  Union  Bank,  584,611. 

V.  Willea  Mills,  21. 
Planters'  &  M.  Bankt/.  Borland,  297. 

V.  Walker,  32,  90. 
Platte-.  Hudson  River  R.R.  Co., 602. 

V.  Hunter,  466. 

V.  Lott,  465. 

V.  Matthews,  134. 

V.  Mead,  125,  133,  182,  218,  219. 

v.  Preston,  229. 

V.  Routh,63. 
Plattsmouth  z'.  Fitzgerald,  627. 
Plumb  7'.  Fluitt,  506. 
Poillon  V.  Lawrence,  406. 
Pollard  V.  Vinton,  682. 
Pomeroy  v.  Bailey,  148,  312,  344,  393. 

v.  Pomeroy,  423. 
Ponce  V.  Underwood,  582,  586. 
Pond  V.  Doneghy,  639. 
Ponsford  v.  Hartley,  175,  209. 
Poole  v.  Mitchell,  371. 
Pope  V.  Allen,  348. 

V.  Cole,  93. 

V.  Wilson,  15,  156. 
Pope's  Ex'rs  v.  Elliott,  492,  497. 
Porter  v.  Green,  504. 
V.  Lazear,  425. 
V.  Pittsburg  Bessemer  Steel  Co., 

163. 
V.  Williams,  94,  185,  187,  188. 
Portland  BIdg.  Assoc,  v.  Creamer,  266. 
Post  V.  Dart,  195. 

V.  Stiger,  42,  145,  193,  259,412. 
Posten  V.  Posten,  344. 
Postlewait  7'.  Howes,  133,  208. 
Potter?'.  Gracie,  26,  276,  305,  311. 
V.  Holland,  62. 
V.  McDowell,   13,    15,   219,  280, 

281,  344.  383- 
V.  Payne,  292,  362. 
V.  Phillips,  201. 
Potts  V.  Blackwell,  83. 

V.  Hart,  470,  473. 
Powell  V.  Bradlee,  630. 

V.  Howell,  48,  55,  115. 
V.  Ivey,  528,  542. 


Powell  V.  Spaulding,  172. 

V.  Waldron,  58. 
Power  V.  Alston,  19. 

V.  Cassidy,  572. 
Powers  7/.  Graydon,  146,  171,  192. 
Powles  V.  Dilley,  240. 
Prather  v.  Parker,  358. 
Pratt  V.  Adams,  598. 

V.  Burr,  76. 

V.  Chase,  405, 

V.  Curtis,  150. 

V.  Pratt,  7,  394. 

V.  Putnam,  673. 
Premo  v.  Hewitt,  72. 
Prentice  v.  Harrison,  615,  619. 
Presas  v.  Lanata,  107. 
Prescott  V.  Hayes,  335. 
V.  Norris,  644. 
Prestidge  v.  Cooper,  290,  505. 
Preston  v.  Boston,  669. 
V.  Crofut,  526. 
V.  Dunn,  639. 
V.  Turner,  283. 
Preusser  v.  Henshaw,  530, 
Prevost  V.  Gratz,  222,  659. 
PrewJt  V.  Wilson,  158,   284,   297,  303, 

304,414.  519.  520. 
Price  V.  Berrington,  649. 

V.  Furman,  699,  703. 

V.  Haynes,  441,  465. 

V.  Le)burn,  603. 

V.  Mazange,  475. 

V.  Pitzer,  28,  358.  . 

V.  Sanders,  219,  647. 
Prichard  v.  Thompson,  572. 
Prickett  v.  Prickett,  309. 
Prime  v.  Brandon  Mfg.  Co.,  62. 

V.  Koehler,  67. 
Primrose  7'.  Browning,  414. 
Pringle  v.  Phillips,  507,  517. 

v.  Pringle,  181. 
Pritchard  7'.  Norton.  100. 
Probst  7'.  Wcldon,  434,  466. 
Produce  Bank  t.  Morton,  121,  341. 
Prosser  7'.  Edmonds,  196,  555. 

7'.  Henderson,  327. 
Prout  7'.  Vaughn,  72. 

7'.  Wiley,  695,  696. 
Pryor  7'.  Downey.  573. 
Public  Works  v.  Columbia  College,  1 14. 

115,  234. 
Pulliam  V.  Taylor,  140. 
Pullis  V.  Robinson,  167. 
Pulver  7/.  Harris,  429. 
Purcell  7'.  McNamara,  688. 
Purkitt  7'.  Polack,  204,  336,  344. 
Pusey  7'.  Gardner,  6,  342,  377,  401.  543. 
Putnam  7'.  Bicknell,  413. 


xlviii 


KrA-re>icc-s]         TaBLE     OF     CASES.  \_areiojia^es. 


Putnam  v.  Hubbell,  432. 

V.  Os<;ood,  349,  482. 
Pyle  V.  Cravens,  640. 

Quackenbos  v.  Sayer,  396. 
Quarles  v.  Kerr,  482. 
Queen  (The).     See  Reg. 
Queensbury  v.  Culver,  607. 
Quimby  v.  Dill,  168. 
Quinby  v.  Strauss,  97,  257. 
Quincy  ■y.  Hall,  191. 
Quiriaque  v.  Dennis,  372. 
Quirk  V.  Thomas,  547. 

Radich  ?'.  Hutchins,  670. 
Railroad  Co.  v.  Grant,  574. 

V.  Howard,  190. 
V.  Soutter,  277. 
v.  Trimble,  61. 
Raleigh  v.  Griffith,  439. 
Ralston  v.  Turpin,  651. 
Randall  v.  Buffington,  74. 
V.  Phillips,  587. 
v.  Sweet,  691. 
V.  Turner,  603. 
v.  Vroom,  29. 
Randegger  v.  Ehrhardt,  384,  385. 
Randolph  ?'.  Daly,  202,  215,  228. 
Ranken  v.  Patton,  551. 
Ranlett  v.  Blodgett,  474. 
Rapalee  v.  Stewart,  450,  463,  464. 
Rappleye  v.  International  Bank,  619. 
Ratcliff  V.  Trimble,  9,  327. 
Rathbun  v.  Platner,  433. 
Raventas  v.  Green,  372. 
Ravisies  v.  Alston,  446. 
Rawdon  v.  Rawdon,  611. 
Rawley  v.  Brown,  348,  370. 
Rawson  v.  Fox,  250. 
Ray  V.  Roe  ex  dcvi.  Brown,  329. 

V.  Teabout,  238.     • 
Raymond,  Matter  of,  429. 
V.  Loyl,  647. 
V.  iMorrison,  7. 
7'.  Richmond,  247. 
Raynor  v.  Mintzer,  197. 
Rea  V.  McEachron,  656. 

V.  Missouri,  10,  283,  295,  390,  391, 

392- 
Read  v.  Worthington,  19,  463. 
Reade  v.  Livingston,  147,  148,  152, 154, 

156,  163,  167,  421. 
Reber  v.  Gundy,  522. 
Rede  v.  Farr,  622. 
Redfield  v.  Buck,  324,  385. 
Redtield  &  Rice  Mfg.  Co.  v.  Pysart, 

328. 
Redington  v.  Roberts,  630. 


Reed  v.  Batchelder,  685. 
V.  Emery,  456. 
V.  Gannon,  508,  515. 
V.  Mclntyre,  460,  531. 
V.  Noxon,  12. 
V.  Pelletier,  466. 
V.  Stryker,  84,  172,  228. 
V.  Wheaton,  142. 
V.  Woodman,  168,  334. 
Reader  7'.  Speake,  125. 
Reehling  7>.  Byers,  342. 
Reese  River  Min.  Co.  v.  Smith,  586, 

588. 
Reeves  v.  Ayers,  83. 

V.  Dougherty,  9. 
V.  Reeves,  612. 
Reg.  V.  Saddlers'  Co.,  629. 

V.  Smith,  244. 
Regli  V.  McClure,  365. 
Reichart  v.  Castator,  541. 
Reifsnyder  v.  Hunter,  485. 
Reiger  v.  Davis,  343,  345. 
Remington  v.  Linthicum,  108. 
Remington  Paper  Co.  v.  O'Dougherty, 

195. 
Renfrew  v.  McDonald,  552. 
Renney  v.  Williams,  342. 
Rennie  v.  Bean,  456. 
Retzer  v.  Wood,  404. 
Reubens  v.  Joel,  114. 
Rex  V.  Duchess  of  Kingston,  23. 
V.  Earl  of  Nottingham,  481. 
Reynell  v.  Sprye,  22. 
Reynolds  v.  Crook,  337. 
V.  Harris,  616. 
V.  Park,  211. 
V.  Robinson,  310. 
V.  Welch,  114. 
Rhawn  v.  Pearce,  405. 
Rhea  v.  Jordan,  605. 
Rhead  v.  Hounson,  88,  216. 
Rheinstein  v.  Bixby,  265,  267. 
Rhem  v.  Tull,  178. 
Rhine  v.  Ellen,  312. 
Rhoads  v.  Blatt,  327. 
Rhode  Island  v.  Massachx'.setts,  581. 
Ricard  v.  Sanderson,  67. 
Rice  V.  Cunningham,  378. 
V.  Cutler,  630,  631. 
V.  Peet,  648. 
V.  Perr}',  280. 
V.  Savery,  67. 
Rich  V.  Levy,  81. 
Richards  v.  Allen,  602. 
V.  Kountze,  9. 
V.  Levin,  442. 
V.  Pierce,  227. 
Richardson  v.  Boright,  703. 


J7^/eyenC£sj         TABLE     OF     CASES.         [are  (a M^es. 


xlix 


Richardson  v.  Duncan,  668,  669. 

V.  iVIarqueze,  73,  441,  530. 
V.  Mounce,  402. 
V.  Rardin,  358. 
V.  Rhodus,  148. 
V.  Root,  178. 
V.  SmalKvood,  166, 
V.  Strong,  652. 
V.  Thurber,  535. 
V.  Trimble,  1 19. 
■z/.^Wyman,  425, 
Riches  v.  Evans,  289. 
Richmond  v.  Irons,  230. 
Richtmeyer  ?',  Remsen,  429. 
Rickards  v.  Attorney-General,  30, 
Riddel  v.  Pakeman,  616. 
Riddle  v.  Lewis,  528. 

V.  Mandeville,  209. 
Rider  7/.  Kidder,  55,  144,  178. 

V.  Mason,  70. 
Ridgely  v.  Bond,  92,  221. 
Ridgway  v.  English,  309. 
Ridout  V.  Burton,  355. 
Rife  V.  Geyer,  54,  497. 
Riggins  V.  Brown,  380. 
Riggs  V.  American  Tract  Soc,  704. 
V.  Murray,  27,  472,  481,  529. 
Righter  v.  Roller,  705. 
Riley  v.  Mallory,  698. 

V.  Mayor,  etc.,  of  N.  Y.,  294. 
Rinchey  v.  Stryker,  89,  127,  128,  191. 
Rinehart  v.  Long,  227. 
Ringgold  7/.  Waggoner,  336. 
Ringo  V.  Binns,  661. 
Riper  v.  Poppenhausen,  379. 
Rippon  7/.  Norton,  497. 
Ritch  V.  Smith,  674. 
Ritter's  Appeal,  666. 
Ritterband  v.  Baggett,  57.  , 

Roach  7/.  Bennett,  412. 
7/.  Brannon,  308. 
7v.  Duckworth,  662. 
Robb  V.  Brewer,  72. 

V.  Irwin's  Lessee,  639. 
Robbins  v.  Butcher,  448. 
7/.  Eaton,  685. 
V.  Oldham,  358. 
7,'.  Parker,  482. 

7'.  Sand  Creek  Turap.  Co.,  172. 
Robert  7/.  Hodges,  112. 
Roberts  v.  Albany  &  \V.  S.  R.R.  Co.. 
104,  105,  533. 
V.  Anderson,  39,  269,  526,  527. 
7/.  Davey,  621. 
V.  Gibson,  232. 
V.  Guernsey,  9. 
V.  Medbery,  385. 
V.  Shepard,  337. 


Roberts  v.  Tennell,  604. 
V.  Wiggin,  693. 
V.  Wyatt,  621. 
Robertson  v.  Western,  etc.,  Ins.  Co., 

661. 
Robinson  v.  Bates,  425. 
V.  Clark,  411. 
V.  Elliott,  21,  372,  470,  471, 

475,  476.  481. 
V.  Gltadow,  675. 
V.  Hoskins,  684. 
If.  Huffman,  49. 
7'.  International  L.  A.  Soc, 

584.  593. 
7K  Kalbtleisch.  586.  682. 
v.  Memphis  &  C.  R.R.  Co., 

682. 
7/.  Stewart,    50,  51,   93,    114, 
166,  242,  278,  416,  533. 
V.  Wallace,  420. 
V.  Weeks,  636,  639,  703.        ' 
7'.  Williams,  309. 
Rocheblave  v.  Potter,  358. 
Rochford  v.  Hackman,  53,  491,  497. 
Rockwell  V.  McGovern,  466. 
Rodgers  7'.  Dibrell,  173. 
Rodman  7/.  Henry,  94,  185, 
Roe  V.  Mitton,  297. 
V.  Moore,  284. 
Roeber  v.  Bowe,  284,  507. 
Roffey  V.  Bent,  491. 
Rogers  v.  Brent,  108. 
7K  Brown,  404. 
V.  Burlington,  607. 
7'.  Gosnell,  67. 
V.  Hall,  389. 
V.  Hurd,  685. 
V.  Jones,  48,  55,  505. 
V,  Rogers,  118,  211. 
V.  Walsh,  626. 
Rollins  7/.  Mooers,  501. 
Romaine  v.  Hendrickson,  660. 
Roman  7'.  Mali,  546,  547,  664. 
Rome  Exchange  Bank  7'.  Eame?,  484. 
Romine  t-.  Romine,  262. 
Rood  7'.  Welch,  184. 
Roof  7'.  Stafford,  693. 
Rooker  7'.  Rooker,  297, 
Root  v.  Reynolds,  298. 
7>.  Stevenson,  643. 
Roper  7/.  McCook,  137. 
Rose  7'.  Bates,  604. 

7'.  Brown,  49,  157,  290. 
7'.  Colter,  150,  311,  356.  407. 
7'.  Mynatt.  663. 
7'.  Sharjiless,  75. 
Rosenberg  v.  Moore.  84,  266. 
Rosenthal  v.  Walker,  223,  224. 


J^e/ereuces'J        TABLE     OF     CASES.         [are  io MS^"- 


Rosewarne  ?'.  Billing,  6oi. 
Ross  V.  Bridge,  270. 

V.  Crutsinger,  330. 
V.  Duggan,  335. 
V.  Hardin,  77. 
V.  McLung,  1 10. 
V.  Terry,  624,  625. 
V.  Wood,  119. 
Rothchild  v.  Rovve,  355. 
Rothgerber  v.  Gough,  340. 
Rourke  v.  Bullens,  354. 
Rouse  V.  Southard,  224. 
Rowland  v.  Coleman,  216. 
Rowley  v.  Bigelow,  630,  631. 
Roy  V.  Bishop  of  Norwich,  38, 
Royal  Baking  Powder  Co.  v.  Sherrell, 

60. 
Royall  V.  McKenzie,  380. 
Royce  v.  Gazan,  293,  377. 
Royer  Wheel  Co.  v.  Fielding,  140,  205, 

308,  458. 
Rozier  v.  Williams,  358. 
Ruchizky  v.  De  Haven,  638,  691,  703. 
Rucker  v.  Abell,  272. 
Ruckman  v.  Conover,  542. 

V.  Ruckman,  593. 
Ruddell  V.  Landers,  599. 
Ruffing  V.  Tilton,  174. 
Ruggles  V.  Brock,  1&8. 
Ruhl  V.  Phillips,  283,  336,  337,  432. 
Rumery  v.  McCulloch,  541. 
Runals  v.  Harding,  264. 
Rupe  V.  Alkire,  19,  281, 
Rush  V.  Barr,  403, 

V.  Vought,  92. 
Russell,  Ar/^«r/^,  161. 

V.  Clark,  133,  134,  135. 
V.  Dyer,  89,  108. 
V.  Grinnell,  496. 
V.  Lasher,  211. 
V.  O'Brien,  365. 
V.  Winne,  108,  276,  281,  322, 
472.  473,  478,  600. 
Rutherford  v.  Chapman,  41 5. 
Ryall  V.  RoUe,  30,  33,  86. 
Ryan  v.  Dox,  604. 
V.  Jones,  56. 
V.  Mackmath,  707. 
V.  Ryan,  593. 
Ryder  v.  Hulse,  420. 

V.  Wombwell,  391,  647. 
Ryhiner  v.  Ruegger,  426. 
Ryland  v.  Callison,  108,  195. 
Ryle  V.  Falk,  102. 

Safford  v.  Douglas,  533. 
Sage  V.  Mosher,  172,  204. 
St.  John  V.  Benedict,  543. 


St.  John  V.  Pierce,  174. 
Salisbury  v.  Morss,  206. 
Salmon  v.  Bennett,  148,  343. 

V.  Smith,  148,  240. 
Salter  v.  Hilgen,  571,  613. 
Salt  Lake  City  v.  Hollister,  605. 
Saltus  V.  Everett,  632. 
Sampeyreac  v.  United  States,  574. 
Sams  V.  Stockton,  647. 
Sanborn  v.  Batchelder,  705. 

V.  Kittredge,  92. 
Sanders  v.  Clason,  68. 
Sands  v.  Codwise,  31,    182,    183,  273, 
340. 
V.  Hildreth,  237. 
Sanford  v.  Lackland,  53. 
V.  Sanford,  312, 
Sanger  z/.  Upton,  107. 
Sangston  v.  Gaither,  15. 
Sankey  v.  O'Maley,  268. 
Sargent  v.  Salmond,  33,  55,  86. 
Sarle  v.  Arnold,  315,  324,  355,  390. 
Sartwell  v.  Horton,  669. 
Satterlee  v.  Matthewson,  574. 
Saunders  v.  Reilly,  308. 
Saunderson  v.  Marr,  640. 
Savage  v.  Dowd,  530. 

V,  Foster,  695. 

V.  Hazard,  501. 

V.  Knight,  39. 

7/.  Murphy,  no,   153,   154,   166, 
285,  286,  416. 

V.  O'Neil,  100,  loi,  410. 

V.  Smith,  408. 
Saver}'  v.  King,  663. 
Savings  Bank  of  New  Haven  v.  Bates, 

467. 
Savoye  v.  Marsh,  405. 
Sawin  v.  Guild,  61. 
Sawyers-.  Hoag,  107,  188,  190,  212. 

V.  Lufkin,  652. 

v.  Noble,  175. 
Sayre  v.  Flournoy,  56. 

V.  Fredericks,  29,  242,  244,  297, 

324- 
V.  Hewes,  322. 
Scales  V.  Scott,  128. 
Schafer  v.  Reilly,  98. 
Schaferman  v.  O'Brien,  204,  328. 
Schaffer  v.  Lavretta,  638. 
Schatz  V.  Kirker,  327. 
Scheble  7'.  Jordan,  385. 
Scheitlin  v.  Stone,  238,  341. 
Schermerhorn  v.  Merrill,  51. 
V.  Negus,  485. 
Schiele  v.  Healy,  466. 
Schleisinger  v.  Sherman,  89. 
Schmidlapp  v.  Currie,  83,  307. 


J^e/erence/j         TABLE     OF     CASES.         ^are/opa^es. 


li 


Schmidt  v.  Opie,  297. 
Schnicker  v.  People,  3S3. 
Schoeffler  v.  Schwartinj;-,  269. 
Scholey  7/.  Muniford,  668. 
Scholle  V.  Scholle,  678. 
Schooner  Freeman  7j.  Buckingham,  682. 
Schrenkeisen  7'.  jNIiller,  253. 
Schribar  v.  Piatt,  75. 
Schroeder  v.  Walsh,  283. 
Schuff  7/.  Ransom,  701. 
Schuman  7a  Peddicord,  593. 
Schuster  v.  Stout,  145. 
Schwed  7A  Smith,  560. 
Schwinger  v.  Hickok,  94. 
Scoggin  V.  Schloatii,  312,  313. 
Scott  V.  Alford,  470,  471. 
V.  Buchanan,  693. 
V.  Depeyster,  220. 
7/.  Gill,  67. 

V.  Hartman,  145,  193. 
V.  Indianapolis    Wagon    Works, 

42,  81. 
7/.  McFarland,  214. 
V.  McMillen,  134,  135. 
V.  Nevins,  jo,  71. 
V.  Onderdonk,  576. 
V.  Wallace,  137. 
V.  Winship,  328,  362. 
Scottish  Amer.  Mortgage  Co.  v.  Fol- 

lansbee,  175. 
Scouton  V.  Bender,  235. 
Scovill  V.  Thayer,  570,  573. 
Scoville  7/.  Canfield,  212. 
Scranton  v.  Stewart,  638,  693. 
Scribblehill  v.  Brett,  597. 
Scribner  v.  Fisher,  405. 
Scrivenor  zk  Scrivenor,  331. 
Sea  Ins.  Co.  7/.  Stebbins,  268. 
Seale  v.  Vaiden,  444. 
Seaman  7/.  Stoughton,  182. 
Sears  v.  Hanks,  25. 

V.  Shafer,  340,  672. 
Seaver  7/.  Bigelows,  172,  560. 
Sebrauth  7k  Dry  Dock  Sav.  Bank,  94. 
Second  Nat.  Bank  7'.  Brady,  545. 

7/.  Burt,  676. 
Secor  7'.  Lord,  67. 
Sedgwick  7'.  Stanton,  25. 
7'.  Tucker,  293. 
Seeley  7/.  Price,  651. 
Seitz  V.  Mitchell,    239,  342,   411,419, 

420. 
Seivers  7/.  Dickover,  273. 
Selby  V.  Jackson,  653. 
Self  7/.  Taylor,  697. 
Selleck  v.  Phelps,  277. 
Selover  7'.  Coe,  209. 
Semmens  v.  Walters,  6,  420. 


Semmes  7'.  Hartford  Ins.  Co.,  133. 

Sample  v.  Morrison,  640. 

Sentance  v.  Poole,  655. 

Senter  7>.  Mitchell,  94. 

Sere  7'.  Pitot,  184. 

Settlemier  7'.  Sullivan,  616. 

Seward  7'.  Jackson,  145,  147,   149,   152, 

163,  298. 
Sexey  7'.  Adkinson,  114. 
Sexton  7'.  Wheaton,  49,  78,  81,  86,  149, 
153,  162,  163,   166,  176,  178,  326, 
416. 
Seymour  7'.  O'Keefe,  357,  363. 

7'.  Wilson,   26,   293,   294,   313, 
483,  500. 
Shackelford  t.  Shackelford.  83. 
Shackleford  7'.  Collier,  182. 
Shaeffer  7'.  Fithian,  274. 
Shainwald  7'.  Lewis,  94,  234,  264. 
Shand  7'.  Hanley,  158,    175,   211,  236, 

249,  272,  275,  290. 
Shankland's  Appeal,  492,  497,  498. 
Shanks  7'.  Klein,  308. 
Shannon  v.  Commonwealth,  481. 
Sharp  7'.  Caldwell,  610. 
7'.  Cosserat,  491. 
7'.  Curds,  622. 
V.  Jones,  631. 
7'.  Sharp,  234. 
7'.  Speir,  656. 
7/.  Teese,  536. 
Sharpe  7'.  Davis,  541. 

V.  Freeman,  179. 
Shattuck  7'.  Freeman,  455. 
Shaver  7'.  Brainard,  198. 
Shaw,  Ex  parte,  614. 
V.  Boyd,  703. 
7/.  Dwight,    118,    124,    140,    141. 

196,  376. 
7>.  Levy,  357. 
V.  Millsaps,  201,  208,  541. 
7'.  Nudd,  673. 
7'.  Spencer,  507. 
71.  Thompson,  355. 
V.  Wilshire,  355. 
7>.  Woodcock.  668. 
Shea  7'.  Knoxvillc  &  Ky.  R.R.  Co.,  126. 
Sheafe  7'.  Sheafe,  81,  90,  127,  12S. 
Shealy  v.  Edwards,  318,  3S9,  530. 
Shean  7'.  Shay,  145,  193,  329. 
Shcaron  7\  Henderson,  342. 
Shee  7'.  Hale.  491. 
Sheldon  v.  Harding,  651. 
7'.  Rice.  659. 
7'.  Weeks,  72. 
Sheldon  H.  B.  Co.  7'.  Eickemever.   H 

B.  M.Co.,  176,673,686,688. 
Shelley  v.  Boothe,  530. 


lii 


J^e/erences'j         TABLE     OF     CASES.  [are  io/a£:es. 


Shellington  7a  Howland,  132,  133. 
Shelton  v.  Church,  327. 
Shepard  v.  Walker,  45. 
Shepherd  v.  Trigg,  358. 

7'.  Woodfolk,  271,  272. 
Sheppard  v.  Thomas,  162,  169. 
Sherk  v.  Endress,  587,  593. 
Sherman  v.  Barrett,  26. 

V.  Blodgett,  380. 

V.  Elder,  415,  429. 

V.  Hogland,    150,    219,    318, 
326,  342,  388,  394. 

V.  Wright,  697. 
Sherrill  Roper  Air  Engine  Co.  v.  Har- 

wood,  270. 
Sherron  v.  Humphreys,  356. 
Sherwood  v.  Sutton,  402. 
Shiffner  v.  Gordon,  593. 
Shine  7/.  Gough,  503. 
Shipman  v.  ^tna  Ins.  Co.,  184. 

V.  Furniss,  23,  306. 

V.  Horton,  698. 
Shirley  v.  Long,  184. 
v.  Teal,  458. 
Shirras  7/.  Caig,  321. 
Shoemaker  v.  Cake,  22. 
Shone  v.  Lucas,  219. 
Shontz  V.  Brown,  144,  145,  176. 
Short  V.  Tinsley,  271. 
Shorten  v.  Woodrow,  131. 
Short  Staple  (The),  9. 
Shrock  V.  Crowl,  691. 
Shryock  v.  Waggoner,  457. 
Shufeldt  V.  Boehm,  81,  82,  107,  134. 
Shultz  V.  Hoagland,  8,  342,  434,  435, 

436,  456,  457.  466. 
Shumway  v.  Rutter,  354. 

'V.  Shumway,  263. 
ShurtlefifT^.  Willard,  354,  482. 
Shurts  7'.  Howell,  125,  180. 
Shute  V.  Dorr,  602. 
Sibly  V.  Hood,  358. 
Sibthorp  v.  Moxom,  66. 
Sickles  V.  Sharp,  39. 
Sidensparker  v.  Sidensparker,  118,  376, 

502. 
Sides  7^.  McCullough,  170. 
Siebold,  Ex  parte,  614. 
Sigler  V.  Knox  County  Bank,  83. 
Sillick  V.  Mason,  70. 
Sillyman  v.  King,  413. 
Silvers  v.  Hedges,  9. 
Silverthorn  v.  McKinster,  677. 
Si  mar  7/.  Canaday,  no,  172,  423. 
Simmons  %•.  Ingram,  ^T,  208,  290. 

7'.  Jenkins,  470. 

V.  McKay,  639. 
Simms  V.  Morse,  8,  342,  394,  419. 


Simpson  v.  Del  Hoyo,  501. 
V.  Eggington,  675. 
V.  Hornbeck,  618. 
V.  Lamb,  664. 
V.  Lord  Howden,  708. 
7A  Warren,  184. 
Sims  V.  Everhardt,  693,  694,  695,  696, 
698,  703. 
V.  Gaines,  15,  42,  54,  335,  378. 
V.  Thomas,  49,  64. 
Simson  v.  Brown,  67. 
Singer  v.  Goldenburg,  335. 

V.  Jacobs,  513,  518. 

V.  Wheeler,  95. 
Singree  v.  Welch,  297. 
Sinking  Fund  Cases,  574. 
Sipe  V.  Eamian,  328,  433. 
Skarf  7/.  Soulby,  42. 
Skeele  v.  Stanwood,  113. 
Skidmore  v.  Romaine,  653. 
Skinner  v.  Maxwell,  691,  703. 
Skipwith  V.  Cunningham,  328. 
Skowhegan  Bank  v.  Cutler,  30. 
Slade  V.  Van  Vechten,  632. 
Slater  v.  Sherman,  42. 
Slaughter  v.  Cunningham,  639,  642. 

V.  Froman,  706. 
Sledge  7/.  Obenchain,  169. 
Sleeper  v.  Chapman,  316,  475. 
Slocum  V.  Hooker,  689,  690. 
Small  V.  Boudinot,  217. 

V.  Owings,  92. 
Smallcombe's  Case,  687. 
Smart  v.  Bement,  503,  504. 
Smets  V.  Williams,  45. 
Smillie  v.  Ouinn,  46,  72. 
Smith  V.  Acker,  469. 

V.  Allen,  72,  304. 

V.  Babcock,  233. 

■V.  Barclay,  57. 

V.  Blake,  96. 

V.  Bowen,  69. 

V.  Bromley,  550,  597,  598. 

V.  Bryan,  560. 

V.  Buchanan,  406. 

V.  Champney,  372. 

V.  City  of  Newburgh,  687. 

V.  Clark,  485. 

V.  Conk  Wright,  20,  481. 

V.  Cratt,  176,  456,  529,  530,  531, 

537,  538. 
V.  Crisman,  370. 
7'.  Cuff,  597. 
V.  Davis,  466. 
7'.  Ely,  470,  473,  480. 
V.  Emerson,  75. 
V.  Ferguson,  639. 
V.  Garey,  63. 


He/erences'j         TABLE     OF     CASES.  [are  io /ages. 


Illl 


Smith  V.  Greer,  156. 

V.  Grim,  201,  208. 

V.  Henkel,  9. 

V.  Henry,  519. 

V.  Howard,  442,  541. 

V.  Hul)bs,  592,  593,  594.? 

V.  Hurst,  481. 

V.  Johnson,  435. 

V.  Kay,  217,  550. 

V.  Kearney,  47. 

V.  Kehr,  25. 

V.  Kelley,  268. 

V.  Lansing,  657. 

V.  Longmire,  128,  139. 

V.  Lowell,  344,  378. 

V.  Mayo,  638,  685,  690. 

V.  Meaghan,  192. 

V.  Millett,  114. 

V.  Mitchell,  73,  429. 

V.  Moore,  53. 

v.  Muirheid,  123. 

V.  Onion,  334. 

V.  Quartz  Min.  Co.,  557. 

V.  Railroad  Co.,  1 13. 

V.  Rumsey,  25,  75,  127. 

V.  Sanborn,  52. 

V.  Schulting,  174. 

?A  Schwed,  393,  532. 

V.  Shaw,  618. 

V.  Skeary,  530. 

v.  Smith,  280, 405,  423,  630,  637, 
706. 

V.  Stone,  597. 

V.  Vodges,  148,  162,  344. 

V.  Vreeland,  147. 

V.  Weeks,  93,  138. 

V.  Welch,  362. 

ZK  Williams,  45. 

V.  Yell,  344. 
Smith's  Will,  Matter  of,  664,  671. 
Snedecor  v.  Watkins,  404. 
Snelling  v.  Mclntyre,  278. 
Snodgrass   v.  Andrews,  84,   125,  138, 
172,  178. 
?'.  Branch  Bank  of  Deca- 
tur, 402. 
Snow  V.  Lang,  545. 
V.  Paine.  293. 
Snowdon  v.  Dales,  53,  497. 
Snyder  7^  Christ,  164,  290. 
Sockman  7/.  Sockman,  90. 
Soden  t.  Soden,  328. 
Sohier  2'.  Johnson,  59. 
Solinger  t.  Earle,  536. 
Solinsky  v.  Lincoln  Sav.  Bank,  257. 
Somerville  t.  Donaldson,  263. 
Somes  7'.  Brewer,  566,  570,  571,  582, 
583.  587,  631. 


Somes  V.  Skinner,  393. 

Sommerville  7'.  Horton,  482,  600. 

Songer  7*.  Partridge,  541. 

Souder's  Appeal,  92,  98. 

Soule  V.  Chase,  405. 

Southard  7'.  Benner,  47,  113,  115,  134, 

179,  182,  184,429.470,473- 
South  Carolina  v.  Gaillard,  574. 
South  Sea  Co.  v.  Wymondsell,  402. 
Southworth  v.  Adams,  in. 
Spackman  v.  Evans,  13. 
Spader  7^.  Davis,  104,  120. 
Sparhawk  7/.  Cioon,  43,  54,  496. 
Sparks  7/.  Dawson,  12. 

V.  De  La  Guerra,  47. 

V.  Mack,  378,  470. 
Sparman  z>.  Keim,  682,  691. 
Spaulding  7/.  Blythe,  219,  286,  407. 
7'.  Fisher,  131. 
V.  Strang,  443,  444,  462,  530, 

538. 
Speer  v.  Sample,  588. 
Speers  v.  Sewell,  651. 
Speiglemyer  7A  Crawford,  126,  177. 
Spence  v.  Bagwell,  431. 
Spencer  7/.  Armstrong,  125,  iSo. 

V.  Ayrault,  307. 

7/.  Carr,  694. 

V.  Cuyler,  93. 

V.  Godwin,  147,  148. 

7'.  Jackson.  461. 

V.  St.  Clair,  705. 

V.  Spencer,  424. 
Spicer  V.  Ayers,  125. 
7/.  Hunter,  254. 
7'.  Spicer,  8. 
Spindle  v.  Shreve,  48,  54,  70,  71,  iii, 

494. 
Spirett  V.  Willows.  49. 
Splawn  V.  Martin,  283. 
Sprague  7/.  Duel,  701. 
Spraights  ?'.  Hawley,  350.  470. 
Spring  7'.  Short.  47,  184.  185,  429. 
Sprott  7'.  United  States,  585. 
Staats  7/.  Bergen,  660. 
Stacy  7/.  Deshaw,  45.  395. 
Stafford  V.  Roof.  691.  698. 
Stall  V.  Fulton.  413. 
Slanbro  7'.  Hopkins,  375. 
Stanford  7'.  Lockwood.  429. 
Stanley  7'.  Bunce,  466. 

7>.  Robbins.  302. 

7'.  Stanton,  225. 
Stanton  7'.  Green.  243. 

7'.  Kirsch.  413. 

7'.  Shaw.  546. 
Staples  V.  Bradley.  89.  loS. 
V,  Smith,  393. 


liv 


AV/c'r.v/,,«]         TABLE     OF     CASES.         [areiopagvs. 


Staples  V.  Staples,  658,  659. 

Starin  v.  Kelly,  31,  284,  293,  377,  433, 

434.  501. 
Starke  v.  Littlepage,  547,  554. 
Starr  v.  Peck,  8,  9. 

V.  Starr,  313. 
State  V.  Bevers,  584,  5S5. 

7/.  Civil  District  Court,  575. 

7A  Estel,  15. 

TJ.  Evans,  311. 

V.  Keeler,  341,  433. 

V.  King,  363. 

{ex  rel.  Peirce)  v.  Merritt,  336, 
340. 

V.  Miller,  loi. 

V.  Mueller,  20. 

V.  Phcenix  Bank,  392. 

7/.  Plaisted,  642, 691,  694,  698, 699. 

V.  Richmond,  578,  590,  591,  620. 

V.  Rosenfeld,  363. 

V.  Shacklett,  581. 

V.  Thomas,  83. 

V.  Williams,  406. 
State  Board  of  Agriculture  v.  Citizens' 

Street  Ry.  Co.,  606. 
Staton  V.  Pittman,  184. 
Steadman  v.  Wilbur,  410,  411. 
Stearns  v.  Gage,  285,  508,  509,  510,  511, 

515.  5-0. 
V.  Page,  223,  402. 
Stebbins  v.  Miller,  382. 
Steele  v.  Benham,  361,  362. 
V.  Curie,  598. 
V.  Ward,  283. 
Steelwagon  v.  Jeffries,  365. 
Steere  v.  Hoagland,  69,  123,  133,  134, 

257,  328. 
Stein  V.  Hermann,  255. 

V.  Munch,  480. 
Stephens  v.  Cady,  60,  61. 

v:  Whitehead,  115. 
Stephenson  v.  Donahue,  419. 
Stern  Auction  &  C.  Co.  v.  Mason,  327. 
Sterry  v.  Arden,  303,  506. 
Stetson  V.  Miller,  458. 
Stevens  v.  Dillman,  328,  340,  382. 
V.  Gladding,  61. 
V.  Hauser,  582. 
V.  Hinckley,  334,  335. 
V,  Hyde,  572,  631. 
V.  Merrill,  2. 
7/.  Myers,  269. 
V.  Robinson,  18,  344. 
7'.  Works,  144. 
Stevenson  v.  Stevenson,  42. 

V.  White,  76. 
Steward  v.  Thomas,  369. 
Stewart  v.  Beale,  132. 


Stewart  %'.  Dunham,  in,  560. 
V,  Emerson,  630. 
V.  English,  48,  55. 
V.  Fagan,  114. 
V.  Fenner,  383,  390. 
V.  Hopkins,  331. 
V.  Johnson,  388. 
V.  Lispenard,  567,  650. 
7/.  McMartin,  95,  96. 
7'.  Piatt,    183,    300,    469,    470, 

541,  632. 
V.  Rogers,  150. 
7'.  Stewart,  424. 
V.  Thomas,  385. 
7'.  Wilson,  328. 
Stileman  v.  Ashdown,  149,  162,  325. 
Still  V.  Spear,  492,  498. 
Stilwell  V.  Swarthout,  655,  656. 

V.  Van  Epps,  102. 
Stimson  v.  White,  413. 

7/.  Wrigley,  144,  353,  371,481. 
Stinson  v.  Hawkins,  287,  288,  321. 

V.  Williams,  48,  55. 
Stockwell  V.  Blamey,  386. 
7'.  Silloway,  291. 
Stoddard  v.  Butler,  30,  328. 

7'.  United  States,  675. 
Stokoe  V.  Cowan,  42,  47. 
Stone  V.  Anderson,  128. 
V.  Chisolm,  107, 
7'.  Damon,  666. 
7'.  Grubham,  325. 
V.  Locke,  37. 
7'.  Myers,  145. 
7'.  Peacock,  372. 
7'.  Spencer,  288,  289. 
7'.  Stone,  423. 
7'.  Wythipol,  685. 
Storey  v.  Agnew,  289. 
Storm  7'.  Davenport,  184,  430. 
V.  United  States,  404. 
7/.  Waddell,  61,  93,  104.  533,  534. 
Stout  V.  Stout,  204,  674. 
Stovall  V.  Farmers'  &  M.  Bank,  273. 
Stover  7/.  Herrington,  321,  335. 
Stowe  V.  Taft,  355. 
Stowell  V.  Hazelett,  384. 
Strader  v.  Mullane,  390. 
Strang  v.  Bradner,  406. 
Strange  v.  Graham,  587. 
Stratford  v.  Ritson,  209. 
Strauss  v.  Kranert,  10. 
Strike  v.  McDonald,  175. 
Striker  v.  Kelly,  656. 
V.  Mott,  466. 
Stronach  v.  Stronach,  706. 
Strong  V.  Clem,  95. 
7'.  Foote,  647. 


J?e/erences'j         TABLE     OF     CASES.         \^are  io /^a^cs 


Iv 


Strong  7'.  Skinner,  51. 
V.  Strong,  42. 

V.  Taylor     School     Township, 
172,  231. 
Stroud  7/.  Marshall,  648, 
Strouse  v.  Becker,  75. 
Stuart  z'.  Palmer,  575,  576. 

V.  Stuart,  145. 
Stucky  V.  Masonic  Sav.  Bank,  522. 
Studwell  7'.  Shapter,  644,  645. 
Stump  7'.  Rogers,  178. 
Sturges  7'.  Vanderhilt,  1 14. 
Sturtevant  7/.  Ballard,  23,  351. 
Suffern  7'.  Butler,  269. 
Sugg  7'.  Tillman,  73. 
Suiter  7'.  Turner,  369. 
Sullice  7'.  Gradenigo,  179. 
Sullivan  7/.  Iron  &  Silver  Min.  Co.,  218. 
V.  Portland&K.R.R.Co.,40i. 
V.  Sullivan,  348. 
Summers  7/.  Babb,  425. 
Sumner  7'.  Brady,  536. 
V.  Cook,  385. 
7/.  Dalton,  355,  365. 
7'.  Hicks,  no,  in,  439,  451. 
Surles  7'.  Pipkin,  652. 
Susong  7'.  Williams,  527. 
Susquehanna  Valley  Bank  7>.  Loomis, 

626. 
Sutherland,  /«  re,  58. 
Sutphen  7.'.  Fowler,  558. 
Sutton  7'.  Ballou,  358,  367. 

7-'.  Han  ford,  21. 
Suydain  7'.  Northwestern  Ins.  Co.,  214. 
Swafford  7/.  Ferguson,  642. 
Swaine  7'.  Perine,  423. 
Swan  V.  Robinson,  522. 

V.  Smith,  127.  177,  272. 
Swayze  v.  Hull,  596. 
Sweet  V.  Tinslar,  543,  593. 
Sweetser  v.  Bates,  3S2. 
Swift  V.  Agnes,  348. 
V.  Hart.  530. 

V.  Mass.  Mut.  Life  Ins.  Co.,  383. 
Switzer  v.  Skiles,  661. 
Sydnor  v.  Gee,  360. 
Syracuse  Chilled   Plow  Co.   v.  Wing, 
291,  297,  417. 

Taaffe,  Ex  parte,  491. 
Tabor  v.  Van  Tassell,  385,  432. 
Taff  z/.  Hosmer,  196. 
Taggart  v.  Stanbery,  313. 
Talcott  V.  Hess,  294,  466. 
Tallmadge  v.  Sill,  63. 
Tallman  v.  McCarty,  614. 
Tallon  7'.  Ellison,  471. 
TamsT/.  Bullitt,  184. 


Tantum  v.  Green,  48,  56,  519,  520. 

V.  Miller,  540,  549,  593. 
Tappan  v.  Evans,  102,  142. 
Tarback  v.  Marbury,  333. 
Tarbell  v.  Griggs,  123. 
Tasker  v.  Moss,  1 1 5. 
Tate  V.  Liggat,  1 14. 
Tatum  V.  Kelley,  598,  599. 
Taylor  v.  Atwood,  272. 

V.  Baker,  507. 

7/.  Bowker,   113,   n4,   n^,   wj, 

133- 

V.  Chichester  &  M.  Ry.  Co.,  568. 

V.  Cloud,  559. 

V.  Dansby,  690. 

V.  Dickinson,  269. 

V.  Holmes,  1 16,  176. 

V.  Jones,  33,  86,  302. 

V.  Mason,  485. 

V.  Patrick,  651. 

V.  Robinson,  385. 

V.  United  States,  38. 

V.  Webb,  199,  201,  208,  385. 

V.  Weld,  557. 

V.  Ypsilanti,  607. 
Teabout  v.  Daniels,  370. 
Tedrowe  v.  Esher.  386.  3S8. 
Teed  v.  Valentine,  n8,  153,  154,  290, 

376. 
Teese  7>.  Huntingdon,  392. 
Teller  7^  Randall.  186. 
Tenant  v.  Elliott,  610. 
Ten  Broeck  v.  Sloo,  56,  57. 
Tennent  v.  Battey,  127. 
Tennessee  Nat.  liank  7'.  Ebbert,  470, 

475- 
Tenney  7>.  Evans,  50,  283. 
Terrell  v.  Green,  318. 
Terrill  v.  Auchaucr,  566. 
Terry  v.  Anderson,  1 17. 
V.  Bissell,  627. 
V.  Cainan,  175. 
V.  Hopkins,  424. 
7'.  Tubman,  141. 
7>.  Wheeler,  367. 
Tessier  7'.  Wyse,  266. 
Tevis  V.  Doe,  87. 
Texas  v.  Chiles,  375. 
V.  White,  584. 
Thacher  7A  Phinney,  156,  293. 
Thames?'.  Rembert,  238,  315,  500,  501, 

526. 
Thayer  7'.  Thayer,  423. 
7'.  Turner,  705. 
Thomas  v.  Brownville.  F.  K.  &  P.  R.R. 
Co.,  658. 
7'.  City  of  Richmond,  5S4,  5S5, 
59-.  597.  5yS.  605. 


ivi 


Re/i'roiccs 


TABLE    OF    CASES. 


a  re  to  pages. 


Thomas  v.  Dickinson,  603. 
V.  Hubbell,  376. 
V.  Markey,  215,  217,  219. 
V.  McEwen,  45. 
V.  Pyne,  328. 
V.  Sullivan,  316. 
V.  Talmadge,  433. 
Thomason  v.  Neeley,  89,  245. 
Thompson  v.  Adams,  58. 

V.  Bickford,  50. 

V.  Blanchard,  355,  362. 

V.  Brown,  180. 

V.  Cundiff,  422. 

V,  Diffenderfer,  83. 

V.  Drake,  321. 

V.  Duff,  520. 

V.  Feagin,  411. 

V.  Furr,  28. 

V.  Hall,  381. 

V.  Kyner,  666. 

7'.  Lay,  685. 

7'.  Leach,  633,  640,  654. 

V.  Moore,  37,  171. 

V.  Nixon,  56. 

V.  Paret,  357. 

V.  Pennell,  334. 

V.  Rose,  630. 

V.  Sanders,  240. 

V.  Sherrard,  267. 

V.  Towne,  62. 

V.  Van  Vechten,  133,  195. 

7/,  Wilhite,  372. 

7/.  Yeck,  358. 
Thompson's  Appeal,  118. 
Thomson  v.  Dougherty,  158,    161,  166, 

167. 
Thorington  v.  Smith,  584,  585. 
Thornberry  v.  Baxter,  204. 
Thornburgh  v.  Hand,  408. 
Thorne  v.  Bank,  356. 
Thornton  v.  Hook,  6. 

V.  Tandy,  385. 
Thorp  V.  Keokuk  Coal  Co.,  67. 
Thouron  v.  Pearson.  330,  331. 
Thrall  v.  Newell,  623,  625,  627. 
Throckmorton  v.  Rider,  377. 
Thrupp  V.  Fielder,  685. 
Thurber  v.  Blanck,  89,  128,  138,  139, 

191. 
Thurlow  7/.  Gilmore,  684. 
Thurston  v.  Blanchard,  631,  705. 
Tibbals  v.  Jacobs,  369. 
Tichenor  v.  Alien,  204. 
Ticknor  v.  McClelland,  358,  372. 
Ticonic  Bank  v.  Harvey,  133. 
Tiernan  v.  Poor,  221. 
Tiernay  v.  Claflin,  503. 
Tiffany  v.  Clark,  658. 


Tildcslcy  v.  Lodge,  503. 

Tilford  V.  Burnham,  104. 

Tillinghast  v.   Bradford,   53,  484,  494, 

495.  497- 
Tillotson  V.  Wolcott,  73,  94. 
Tillou  V.  Britton,  531. 
Tilson  V.  Terwilliger,  362,  364,  385,  387. 
Tilton  7',  Beecher,  242. 

V.  Cofiekl,  206,  235,  525. 

V.  Russell,  646. 
Titcomb  v.  Vantyle,  649. 

V.  Wood,  629,  631. 
Tobie  &  Clark  Mfg.  Co.  v.  Waldron, 

145- 
Todd  V.  Lorah,  307. 

V.  Monell,  28,  54. 
V.  Nelsoh,  153,  154,  155. 
Tognini  v.  Kyle,  6,  16,  315,  367. 
Toker  v.  Toker,  64. 
Tolbert  v.  Horton,  114. 
ToUes  7'.  Wood,  70,  492. 
Tolman  v.  Marlborough,  66. 
Tolputt  V.  Wells,  322. 
Tolson  V.  Garner,  704. 
Tomlinson  v.  Matthews,  411. 
Tompkins  7/.  Fonda,  54,  56,  95,425. 
V.  Nichols,  239,  369,  377. 
V.  Purcell,  94,  123. 
V.  Sprout,  26,  275,  277. 
Toney  v.  McGehee,  6,  7,  9,  1 56. 
Tool  Co.  V.  Norris,  597. 
Topping  V.  Lynch,  361. 
Torrey  v.  Bank  of  Orleans,  657,  662, 

679. 
Totten  V.  Brady,  530. 

V.  United  States,  592. 
Towers  v.  Hagner,  410. 
Towle  7'.  Dresser,  641,  698. 

V.  Hoit,  27,  378. 
Town  of  Oueensbury  7'.  Culver,  607. 

Venice  7'.  Woodruff,  208,  706. 
Towne  v.  Fiske,  387. 
V.  Smith,  405. 
Townsend  v.  Early,  491. 

7'.  Little,  365,  503,  506. 

V.  Mayor  of  New  York,  194, 

575- 
V.  Steams,    ■};]■],   436,    463, 

464,  465- 

11.  Townsend,  574. 

V.  Tutlle,  146. 

7'.  Whitney,  177. 
Townshend  7'.  Windham,  63,  64,  167. 
Township  of  Burlington  7'.  Beasley,  607. 
Tracy  v.  Cover,  75. 

7'.  Tracy,  605. 
Trade-Mark  Cases,  59,  60. 
Traer  v.  Clews,  452. 


References'^  iAbl.L     ^jl^    CASES.         ^are  to  pages. 


Ivii 


Train  v.  Kendall,  467. 

Traip  z'.  Gould,  90. 

Trapnall  7'.  State  Bank,  639. 

Trappes  v.  Meredith,  497. 

Trask  7'.  Bowers,  365. 

Trefts  V.  King,  506. 

Trego  V.  Skinner,  84,  205,  211. 

Tremper  v.  Barton,  588. 

Trenton  Banking  Co.  71.  Duncan,  397, 

399- 
Tresch  7'.  Wirtz,  414. 
Trimble  v.  Turner,  167. 

V.  Woodhead,  182,  183,  186. 
Tripp  7'.  Vincent,  232. 
Trippe  v.  P'razier,  572. 
Trist  V.  Child,  597,  600. 
Troll  V.  Carter,  543. 
Trotter  v.  Watson,  387. 
Trough,  Estate  of,  422. 
Troughlon  7-.  Troughton,  63. 
Troup  7'.  Smith,  403. 
Trovinger  7'.  McBurney,  599. 
Troxall  7'.  Applegarth,  6. 
Truax  v.  Slater,  384,  385. 
Trueblood  v.  Trueblood,  640,  681. 
Truesdell  7'.  Sarles,  232. 
Trullenger  7'.  Todd,  616. 
Truscott  V.  King,  309,  312, 
Trust  Co.  V.  Sedgwick,  259. 
Trustee  Relief  Act,  Itt  re,  42. 
Tryon  7-.  Whitmarsh,  515. 
Tucker  v.  Andrews,  285. 
■     V.  Drake,  75. 

V.  Moreland,  683,  692,  693,  698, 
699,  700,  703. 

V.  Tucker,  84,  423. 

V.  Zimmerman,  210. 
Tumlin  v.  Crawford,  24. 
Tupper  V.  Cadwell,  647. 

7/.  Thompson,  81,  89. 

7'.  Wise,  560. 
Turbeville  v.  Gibson,  321. 
Turnbull  7'.  Bowyer,  623,  625. 
Turner  7'.  Adams,    113,   117,    133,    134, 

135. 

V.  Cheesman,  666. 

V.  Fe'gite,  615. 

V.  First  Nat.  Bank,  208. 

V.  Fowler,  485. 

V.  Jaycox,  464,  465. 

7'.  Nye,  410. 

V.  Robinson,  205. 

V.  Turner,  145,  193. 

V.  Tutile,  627. 

7'.  V'aughan,  72. 
Turnley  v.  Hooper,  49. 
Turpin's  Admr.  7'.  Turpin,  691. 
Tuxbury  v.  Miller,  536. 


Tuxworth  7'.  Moore,  365. 

Twin   Lick  Oil  Co.  v.   Marbury,   657, 

659. 
Twyne's  Case.  30,  31,  38,  39,  41,  298, 

302,  317,  325,  328,  349.  352. 
Tyberandt  7'.  Raucke,  342. 
Tyler  v.  Angevine,  295,  388,  402. 

7'.  Defrees,  581. 

V.  Peatt,  114. 

V.  Tyler,  541,  543. 

Uhl  7'.  Dillon,  81,  82,  265. 

V.  Robison,  356. 
Uhlfelder7'.  Levy,  85,  118. 
Uhre  V.  Melum,  214. 
Underwood  z\  Sutclifie,  185,  186. 
Union  Bank  of  Tenn.  t'.  EUicott,  467. 
Union  Nat.  Bank  1'.  Warner,  249,  255, 

256,  272,  532. 
United  States  7'.  Amistad,  23,  91. 

7'.  Arrcdondo,  581. 

V.  Bainbridge,  636,  689. 

7/.  Beebee,  399. 

7'.  Bell  Telephone  Co.,  226. 

V.  Drew,  667. 

V.  Forbes,  667. 

7'.  Griswold,  162,  272,  321,  386. 

V.  Grossmayer,  569,  586,  598. 

V.  Hooe,  28,  309. 

V.  Lotridge,  328. 

7'.  McGlue,  666. 

V.  Stiner,  1 54. 

V.  Thirty-six  Barrels  of  High 
Wines,  392. 

V.  Throckmorton.  119. 
Updike  V.  Ten  Broeck,  309. 

V.  Titus,  309. 
LTpshaw  71.  Gibson,  696. 
Urquhart  v.  Macpherson,  705. 
Upton  V.  Englehart,  188. 

7A  McLaughlin,  224,  402,  404. 
V.  Tribilcock,  188.  190,  212. 
Usher  v.  Hazelline,  k68,  501. 
Utterson  v.  Vernon,  30. 

Valentine,  Matter  of,  656. 

Van  Alstvne  7'.  Cook,  236. 

Van  Bibber  7-.  Mathis,  16,  292,  421. 

Van  Bramer  ?'.  Cooper,  689. 

Van  Buskirk  7>.  Warren,  100. 

Vance  7'.  Phillips,  291,  292. 

V.  Schroyer,  191,  705. 
Vandcrpoel  7'.  Ke.irns,  661. 

7'.  Wan  V'alkenburgh,  199, 
205. 
Van  Deuscn  7-.  Sweet,  268,  583,  654, 

704. 
Van  Doren  v.  Mayor,  etc.,  194,  708. 


Iviii 


7;!c/c;e>!cci]         TABLE     OF     CASES.         [areioM^es. 


Van  Dyck  v.  McQuade,  219. 

Van  Epps  v.  Van  Epps,  658,  660,  676. 

Van  Etten  v.  Ilurst,  127. 

Van  Heusen  ?'.  Radcliff,  116,  184. 

Van  Horn  v.  Hann,  652. 

Van   Kleeck  v.   Miller,    118,  205,  229, 

416,417. 
Van  Liew  v.  Johnson,  705. 
Van  Nest  v.  Yoe,  431,  440. 
Van  Patten  v.  Beals,  655. 
Van  Rensselaer  v.  Dennison,  485. 
Van  Schaick  v.  Third  Ave.  R.R.  Co., 

67. 
Van  Shaack  v.  Robbins,  566,  571,  573, 

620. 
Van  Trott  v.  Wiese,  705. 
Van  Valkenburgh  v.  Torrey,  39. 
Van  Wee!  v.  Winston,  216. 
Van  Wickle  7>.  Calvin,  178. 
Van  Winkle  v.  McKee,  541. 
Van  Wy  v.  Clark,  541. 
Van  Wyck  v.  Baker,  218,  250,  251,  271. 
zf.  Brasher,  665. 
V.  Seward,  144,  151,  165. 
Vasse  V.  Smith,  644. 
Vasser  v.  Henderson,    104,    114,    137, 

140. 
Vattier  v.  Hinde,  503. 
Vaughan  7'.  Thompson,  25. 
Vause  V.  Woods,  267. 
Veazie  v.  Somerby,  354. 
Veeder  v.  Mudgett,  570,  573,  687. 
Venable  v.  Bank  of  the  U.  S.,  211,  321. 
Venice  7/,  Woodruff,  208,  706. 
Verner  v.  Downs,  141. 
Vernon  v.  Morton,  431,  440. 
Vcrplank  v.  Sterry,  149,  303. 
Verselius  7'.  VerseHus,  221. 
Vertner  v.  Humphreys,  412. 
Very  v.  McHenry,  405. 
Vicif  V.  Lane,  200. 
Violett  V.  Violett,  283. 
Virginia,  Ex  parte,  614. 
Vogler  V.  Montgomery,  25,  75. 
Vogt  V.  Ticknor,  376. 
Von  Sachs  7'.  Kretz,  384. 
Voorhees  v.  Bank  of  the  U.  S.,  586, 
587. 
V.  Boaesteel,  216,  414,  415. 
7'.  Howard,  90,  113,  142. 
V.  Seymour,  118,  376,  533. 
Voorhis  7'.  Gamble,  199. 
Voshell  7'.  Hynson,  269. 
Vredenbergh  7'.  White,  354. 
Vreeland  71.  N.  J.  Stone  Co.,  i,  396. 
Vrooman  v.  Turner,  67. 

W\  V.  B.  (32  Beav.  574),  550,  575. 


Wabash,  St.  L.  &  P.  Ry.  Co.  v.  Ham, 

163. 
Waddams  7'.  Humphrey,  379. 
Waddell  7'.  Lanier,  90,  181. 
Waddingham  v.  Loker,  6. 
Wade  71.  Rusher,  85. 
Wadhams  7>.  Gay,  92. 
Wadsworth  v.  Sherman,  653. 

7'.  Schisselbauer,  104. 

V.  Williams,  156,  182,  288, 

385. 
Waggoner  v.  Speck,  47. 
Wagner  v.  Smith,  28. 
Wait  V.  Bull's  Head  Bank,  317. 
V.  Day,  26,  87,  305. 
v.  Maxwell,  654,  681. 
Waite,  Matter  of,  190,  467,  558. 

71.  Harper,  536. 
Wake  V.  Griffin,  416. 
Wakeman  v.  Dalley,  7,  9,  436,  437. 

7'.  Grover,  106,456. 
Waldele  v.  N.  Y.  Central  &  H.  R.  R.R. 

Co.,  383. 
Walden  7'.  Murdock,  367,  530. 
Waldman  v.  O'Donnell,  95. 
Walkenhorst  71.  Lewis,  639. 
Walkenshaw  7'.  Perzel,  379. 
Walker  v.  Adair,  538. 
7J.  Denne,  267. 
7'.  Lovell,  146. 
7'.  Powers,  175,  209,  226. 
7'.  Reamy,  420. 
V.  Sleight,  581. 
7'.  Vincent,  485,  487. 
Wall  V.  Fairley,  172,  173,  208. 

v.  Provident  Inst.,  181. 
Wallace  7'.  Eaton,  198. 

V.  Latham,  693,  696. 

7'.  Lawyer,  48,  55. 

7'.  Lewis,  703. 

7>.  Morss,  643. 

7'.  Penfield,  158,  160,  163,  166, 

235- 
Waller  7'.  Shannon,  205. 

7'.  Todd,  127. 
Wallis  7'.  Bardwell,  647. 
Walradt  7'.  Brown,  42,  193. 
Walsh  7'.  Ketchum,  344. 

v.  Powers,  680,  683,  684. 

7>.  Young,  699,  703,  704. 
Walter  7'.  Gernant,  371. 

7).  Lane,  12,  149,  154,  162. 
71.  Riehl,  204,  211. 
Walthall  V.  Rives,  214. 
Waltham  7'.  Broughton,  5. 
Walton  7'.  Bonham,  547. 

V.  Tusten,  543,  554,  587,  593. 
Wamsley  v.  Robinson,  586. 


He/erefices'j        TABLE     OF     CASES.         [«>"<■/<; /»a^<^j. 


llX 


Waples  V.  Hastings,  640. 
Ward  V.  Dewey,  576,  577,  707. 
V.  Northumberland,  174. 
V.  Roy,  95. 
V.  Saunders,  386. 
V.  Trotter,  440. 
Warden  v.  Railroad  Co.,  657. 
Warden  v.  Jones,  49. 

v.  Marshall,  366. 
Wardour  v.  Berisford,  392. 
Ware  v.  Galveston  City  Co.,  192. 

V.  Gardner,  325. 
Waring  v.  Mackreth,  241. 
Warner  v.  Blakeman,  24,  90,  92,  217, 
221,  257. 
V.  Callendar,  85. 
V.  Daniels,  80. 
V.  Dove,  148,  219. 
V.  Hopkins,  397. 
2/.  Jaffray,  429,  430,  467. 
V.  Mower,  467. 
V.  Norton,  330,  356,  357,  362. 
V.  Percy,  295. 
V.  Warren,  282. 
Warnock  v.  Campbell,  666. 
Warren  v.  Jones,  530. 
V.  Lee,  458. 
V.  Moody,  182. 
V.  Warren,  227. 
■z/.  Warren  Thread  Co.,  59,  60. 
2f.  Williams,  146,  385,  393, 
Warren  County  v.  Marcy,  235. 
Wartman  v.  Wartman,  280. 
Warwick  v.  Petty,  322. 
Washband  v.  W^ashband,  284,  298. 
Washburn  v.  Goodheart,  75. 

V.  Sproat,  50. 
Washer  z/.  Brown,  269. 
Washington  Central    Bank  v.  Hume, 

47.  422. 
Washington  Union  Ins.  Co.  v.  Wilson, 

12. 
Waterbury  z'.  Sturtevant,  317. 
Waterman  v.  Sprague  Mfg.  Co.,  397. 
Waters  v.  Cullen,  665. 
V.  Dashiell,  184. 
V.  Taylor,  5. 
Watkins,  Ex  parte,  581,  614. 
7A  Abrahams,  639. 
V.  Baird.  668,  669. 
V.  Dorsett,  55. 
V.  Worlhington,  381. 
V.  Wortman,  123. 
Watrous  v.  Lathrop,  142. 
Watson  i>.  Bourne,  405. 
V.  Dodd,  53. 
V.  Riskamire,  14,  2S5. 
Watt  V.  Grove,  339. 


Watts  V.  Creswell,  695. 

Waverly  Nat.  Bank  v.  Halsey,  461,  466. 

Way  V.  Bragaw,  205,  228. 

Waymire  v.  Jetmore,  612. 

Weaver  v.  Barden,  632. 

V.  Carpenter,  640. 
V.  Owens.  291,  315,  319. 
Webb  V.  Helion,  85. 

V.  Ingham,  340,  411. 
V.  Odell,  624. 
V.  Read,  234. 
Weber  v.  Armstrong,  471. 

V.  Rothchild,  243. 
Webster  v.  Clark,  113,  115. 
V.  Folsom,  87,  131. 
V.  Hildreth,  49. 
V.  Lawrence,  114,  127. 
V.  Peck,  364. 
V.  Upton,  188. 
V.  Withey,  501. 
V.  Woodlord,  648. 
Weed  V.  Davis,  344. 

V.  Pierce,  42,  47,  86. 
Weeden  v.  Hawes,  321,  600. 
Weeks  v.  Hill.  307. 

V.  Prescott,  355. 
Wehle  V.  Butler,  617. 

V.  Haviland,  618. 
Weigtman  v.  Hatch.  107,  i2o,  137,  140. 
Weil  V.  Lankin5.  127. 
Weir  V.  Day,  42,  145,  193. 
Weis  V.  Goetter,  264. 
Weise  v.  Wardle,  201. 
Weismer  v..  Village  of  Douglas,  607. 
Welch  V.  .McGrath,  676,  677. 
Welcker  z*.  Price,  241. 
Welde  V.  Scotten,  177,  193. 
Welles  V.  Fish,  403. 
Wellington  7/.  Small,  96. 
Wells  V.  Langbein,  480,  481. 
V.  Morrow,  504. 
V.  O'Connor,  i  iS,  376. 
Welsh  V.  Britton,  444. 

V.  Welsh.  179.  230. 
Wendell  v.  Van  Rensselaer,  398. 
Wentworth  v.  Tubb,  652. 
Werts  V.  Spearman,  383. 
Wescott  ?'.  Gunn.  469. 
West  V.  Moore.  644. 
V.  Penny,  639. 
V.  Raymond,  664. 
V.  Snodgrass,  27,  48 1. 
Weslerman  v.  Westennan,  192. 
Western  Transp.  Co.  v.  Kilderhouse. 

212 
Westmoreland  v.  Powell.  193. 
Weston  V.  Blake,  227. 
West  Side  Bank  v.  Pugslcy,  93,  94. 


Ix 


/^e/erence/j         TABLE     OF     CASES.         ^are/o  pages. 


Wetherbee  v.  Baker,  20c. 
Wetmore  v.  Truslow,  71. 
Weyand  7'.  Tipton,  408. 
Weymouth  7'.  Chicago   &    N.  W.  Ry. 

Co.,  413. 
Whaley  ?'.  Dawson,  174. 
Wharton  7>.  Mackenzie,  646. 

7A  May,  378. 
Wheatcroft  ?'.  Hickman,  447. 
Wheaton  7'.  East,  638. 
Whedbee  7'.  Stewart,  15. 
Wheelden  7'.  Wilson,  13,  294,  316,  325, 

339.  342. 
Wheeler  v.  Billings,  313. 
V.  Konst,  356. 
V.  Russell,  592. 
7/.  Wallace,  257. 
7/.  Wheedon,  211. 
Whelpdale's  Case,  589. 
Whichcote  7'.  Lawrence,  587. 
Whipple  7'.  Pope,  464. 
Whitaker  7'.  Whitaker,  310. 
Whitbread  v.  Jordan,  507,  508. 
Whitcomb  v.  Denio,  705. 
ZK  Fowle,  445. 
V.  Joslyn,  703, 
White  7'.  Albertson,  639. 
7'.  Banks,  430. 
v.  Branch,  703. 
7'.  Cotzhausen,    458,    465,    529, 

532. 
V.  Fagan,  441. 
V.  Fisk,  572. 
V.  Franklin  Bank,  608. 
7^  Garden,  629. 
V.  Geraerdt,  126. 
V.  Givens,  75. 
7'.  McPheeters,  280. 
V.  Perry,  6,  7,  8,  24,  390. 
7'.  White,  54,  497. 
White's  Bank  of  Buffalo  v.  Farthing, 

172,  173,  248,  249,  267. 
Whitehead  t'.  Kennedy,  663. 
Whitesel  v.  Hiney,  219. 
Whiting  V.  Barrett,  72. 

7'.  Sheboygan,  etc.,  R.R.  Co., 
606,  607. 
Whitney  v.  Dutch,  63S,  640,  641,  680, 
685. 
7/.  Martine,  660,  664,  675. 
V.  National  Bank  of  P.,  625. 
Whitney  Arms  Co.  7a  Barlow,  568. 
Whiton  V.  Snyder,  409,  410,  413. 
Whitridge  7'.  Parkhurst,  604. 
Whittaker  7'.  Merrill,  429. 
Whittington  7'.  Jennings,  63. 
Whittlesey  v.  Delaney,  118,  217,  376. 
Wich  7'.  Parker,  244. 


Wiggin  V.  Bush,  536. 
V.  Day,  630. 
Wiggins  V.  Armstrong,  82,  116,  120, 

7/.  McDonald,  67. 
Wilber  V.  Paine,  604. 
Wilcox  7'.  Fitch,  42. 

7'.  Kellogg,  83. 
7'.  Roath,  685. 
Wilcoxen  v.  Morgan.  345,  525. 
Wildes  7'.  Vanvoorhis,  620. 
Wiles  7/.  Suydam,  212. 
Wiley  7/.  Gray,  412. 

V.  Knight,  15. 
Wilkes  7/.  Ferris,  465. 
Wilkinson  v.  Babbitt,  277. 

V.  Scott,  603. 

7'.  Yale,  123. 
Willetts  V.  Vandenburgh,  120. 
Williams  7'.  Albany  City  Ins.  Co.,  619, 
620. 

V.  Ayrault,  559. 

7/.  Banks,  162,  169,  178,  344. 

V.  Benedict,  iii, 

7'.  Brown,  638. 

?'.  Bruffy,  585. 

7'.  Carle,  424. 

7/.  Davis,  23,  164. 

7/.  East  India  Co.,  599. 

7/.  Evans,  16. 

7'.  Ewing,  235. 

7'.  Given,  629,  631. 

7'.  Harrison,  642. 

7'.  Hart,  387. 

7'.  Higgins,  541,  542. 

7'.  Hubbard,  79. 

7'.  Jackson,  503. 

7/.  Kirtland,  no. 

7K  Leech,  485. 

7A  Lomas,  64. 

7'.  Lord,  9. 

V.  Marshall,  587. 

7'.  Merritt,  182. 

7'.  Michenor,  128. 

7'.  Neel,  228. 

7'.  Rawlins,  25. 

7'.  Sexton,  93. 

7'.  Smith,  615,  616,  619. 

7'.  Thorn,  70,  71,  93,  484,  492. 

7'.  Whedon,  445. 

7'.  Williams,  593. 

7'.  Winsor,  184,  476. 
Williamson  7/.  Brown,  505,  507,  517. 
7'.  Goodwyn,  328. 
7'.  Parisien,  612. 
7A  Russell,  631. 
7'.  Williams,    6,    239,    257, 

387. 
Willis  V.  Twambly,  698. 


References']^         TABLE     OF     CASES.  \are  to  pages. 


Ixi 


Willison  V.  Desenberg,  32 r. 
Willoughby  -u.  Moulton,  631. 

7J.  Willoughby,  503,  504. 
Wilson  V.  Anthony,  401. 
V.  Berg,  435. 

V.  Forsyth,  171,  432,  434. 
V.  Fuller,  631. 
V.  Hill,  367. 
V.  Horr,  232,  529. 
V.  Hunter,  521. 
v.  Jordan,  327,  657. 
V.  Kohlheim,  148. 
V.  Lazier,  9. 
V.  Lott,  320,  342. 
V.  Pearson,  289. 
V.  Prewett,  283,  518. 
V.  Robertson,  270,  308,  466. 
V.  Sullivan,  479. 
V.  Troup,  587. 
v.  Watts,  23. 
V.  White,  630. 
W^ilson  Bros.  W.  &  T.  Co.  v.  Daggett, 

426. 
Wilt  V.  Franklin,  15. 

V.  Welsh,  644. 
Wimbish  v.  Tailbois,  38. 
Winch's  Appeal,  194. 
Winchester  v.  Charter,   150,   156,   161, 
281,    292,    295,    321, 

344,  385.  390- 
V.  Gacldy,  72. 
V.  Thayer,  690. 
Winchester  &  P.  Mfg.  Co.  v.  Creary, 

385.  389- 
Wingler  7>.  Sibley,  475. 
Winkley  v.  Hill.  478. 
Winslow  V.  Dousman,  204. 
Winsor  7/.  McLellan,  184. 
Wirebach  v.  First  Nat.  Bank,  649. 
Wise  V.  Tripp,  66. 

V.  Wheeler,  386. 
V.  Wimer,  433. 
Wisner  v.  Barnet,  405. 
Wiswall  V.  Sampson,  in. 
Wiswell  V.  Jarvis,  419. 
Witherwax  v.  Riddle,  326. 
Withrovv  v.  Biggerstaff,  393. 
Witmer's  Appeal,  265. 
Wolf  7/.  Dietzsch,  705. 
Wolfe  V.  Davis,  617. 
Wollaston  v.  Tribe,  64. 
WoUensak  t.  Reiher.  223. 
Wood  v.  Amory,  216. 

V.  Carprnter,  223,  225,  521,  522 
524. 

7/.  Chambers,  25,  72. 

V.  Chajiin,  195. 

V.  Clark,  7. 


Wood  V.  Dixie,  289,  531. 
V.  Downe,  663. 
V.  Dumnier,  188. 
V.  Goff's  Curator,  271. 
V.  Hunt.  272. 
V.  McCain,  675. 
V.  Robinson,  211,  504. 
V.  Stark,  297. 
V.  United  Slates,  392. 
V.  Yeatman,  630. 
Woodbridge  7'.  Allen,  405. 
Woodburn  7>.  Mosher,  452. 
Woodcock  V.  Bennet,  613. 
Woods  V.  Bugbey,  358,  367. 
V.  Dilie,  604. 
V.  Morrell,  241. 
Woodward  7>.  Marshall,  446. 
V.  Wyman,  302. 
Woodworth  t/.  Bennett,   592,  608,  610, 
611. 
V.  Paige,  425. 
V.  Sweet,  414,  417. 
Wooldridge  v.  Gage,  145. 
Wooster  v.  Sherwood.  632. 
Wooten  V.  Clark,  27,  378. 
Wordall  v.  Smith,  352,  365. 
Worman  v.  Kramer,  357,  365. 
Wormley  7'  Wormle) ,  504,  660. 
Worseley  v.    Dematlos,   23.  315.  330. 

333.  470- 
Worthinglon  v.  Bullitt,  275,  344. 

V.  Shipley,  344. 
Worthy  v.  Brady,  281. 
Wray  v.  Davenport,  28. 
Wright  V.  Campbell  121,  125,  133. 

V.  Delalifld,  232. 

V.  Hale,  574. 

V.  Hencock,  323. 

V.  Linn,  390. 

V.  McCormick,  340,  349.  358. 

V.  Nostnind,  80,  93. 

V.  Oroville  M.  Co.,  92. 

V.  Wheeler.  238. 

V.  Wright.  303. 

V.  Zeigler,  426. 
Wyatt  7'.  Brooks,  236. 
Wyckoff  7'.  Carr,  384. 
Wyman  7'.  Adams,  625. 

7'.  Brown,  157,  505. 

Xenia  Bank  v.  Stewart,  81. 

Yates  V.  Lyon,  642,  643.  689. 

V.  Yates.  370.  386. 
Yauger  v.  Skitiner,  648. 
Yeamans  7'.  James,  664. 
Yeatman  7'.  Savings  Iiisl.,  183.632. 
'  Yeaton  7-.  Lenox,  172. 


1X11 


Re/ere>ices'^         TABLE     OF     CASES.  l_are  iff Mses. 


Yellow  Jacket  S.  M.  Co.  v.  Stevenson, 

674. 
Yocum  7/.  BuUit,  107. 
York  V.  Bright,  403. 
V.  Merritt,  536. 
Yost  V.  Hudiburg,  344. 
Youmans  v.  Boomhower,  45,  72. 
Young  V.  Cole,  625,  627. 

v.  Edwards,  12. 

V.  Frier,  1 20. 

V.  Glendenning,  605. 

V.  Heermans,  17,  20,  28,  38,  54, 
144,  219,  378. 

V.  Kimball,  706. 

V.  Lathrop,  527. 

V.  McClure,  357,  364. 


Young  V.  McKee,  684. 

V.  Ward,  272. 

V.  Willis,  28. 
Youngs  V.  Carter,  1 10,  423. 
Youse  V.  Norcoms,  638. 

Zabriskie  v.  Smith,  429. 
Zane  v.  Fink,  543. 
Zimmerman  v.  Heinrichs,  517. 

V.  Willard,  218. 
Zoeller  v.  Riley,  248,  501,  504. 
ZoU  v.  Soper,  178,  208. 
Zouch  v.  Parsons,  640,  680. 
Zule  V.  Zule,  612. 
Zuver  V.  Clark,  194. 


FRAUDULENT   CONVEYANCES 


CREDITORS'   BILLS. 


FRAUDULENT    CONVEYANCES 


AND 


CREDITORS'    BILLS. 


CHAPTER   I. 


INTRODUCTORY  OBSERVATIONS. GROWTH    OF   THE    LAW  CON- 
CERNING   FRAUDULENT   CONVEYANCES. PHASES  OF  THE 

SUBJECT. 


§    I.  Severity  of    the    Roman    law — 
Modern  changes. 

2.  Prevalence   of  fraudulent   trans- 

fers— The  cause. 

3.  Scope  of  the  inquiry. 

4.  Forms  of  relief. 

5.  )  Onus   as    to    fraud — Suspicions 
>     insufficient — Absence  of  pre- 

6.  )      sumptions. 

7.  Judge  Black's  views. 

8.  Proof  of  moral  turpitude. 

9.  Fraud  in  fact  and  fraud  in  law. 

10.  The  cases  considered. 

11.  Words    "hinder,    delay,    or    de- 

fraud." 

12.  Word  "  disposed  "  construed. 


§  13.  No  definition  of  fraud. 

14.  Restraints  upon  alienation. 

15.  Fraudulent    conveyances — Char- 

acteristics and  classes. 

16.  Fraudulent  conveyances  at  com- 

mon    law — Statutes     declara- 
tory. 

17.  Covinous  transfers  of  choses  in 

action. 

18.  Early  statutes   avoiding   fraudu- 

lent conveyances. 

19.  Statute,  13  Eliz.  c.  5,  and  its  ob- 

ject. 

20.  Its  interpretation  and  construc- 

tion. 

21.  Statute,  27  Eliz.  c.  4. 

22.  Twyne's  Case. 


"  The  rule  is  universal,  whatever  fraud  creates,  justice  will  destroy." — Vice-Chancellor  Van 
Fleet  in  Vreeland  v.  New  Jersey  Stone  Ct;.,  29  N.  J.  Eq.  190. 

§  I.  Severity  of  the  Roman  law— Modern  changes.— It  has 
been  truly  observed  that  the  protection  and  preservation 
of  the  rights  of  creditors  must  be  a  fundamental  policy  of 
all  enlightened  nations.^     The  method  by  which  this  pro- 


1  I  Story's  Eq.  Jur.  §  350  ;  Creditors  are  "  a  favored  class,"  Fouche  v.  Brower, 
74  Ga.  251. 


INTRODUCTORY    OBSERVATIONS. 


§' 


tection  may  be  extended  and  rendered  practically  effectual 
is,  however,  a  problem  very  difficult  of  solution.  The  bar- 
barous practice  which  prevailed  among  the  ancient  Romans 
of  putting  an  insolvent  to  death,  or  selling  him  into  slavery, 
pictures  to  our  imaginations  the  strong  legal  and  moral 
foundation  which  a  pecuniary  obligation  had  in  the  minds 
of  the  people  in  early  times.  The  penalty  for  the  failure 
to  pay  a  debt  was  as  severe  as  that  which  is  now  ordinarily 
imposed  upon  criminals  for  the  commission  of  the  most 
heinous  of  crimes.^ 

The  chains  which  held  a  debtor  in  the  power  of  his 
creditor  have  one  by  one  been  broken,^  but  the  sacredness 
of  a  promise  to  pay  a  debt,  notwithstanding  the  abrogation 
of  the  ancient  penalties,  is  still  voluntarily  cherished  by  the 
mass  of  mankind.  Yet,  unfortunately,  the  protection  and 
preservation  of  the  rights  of  creditors  is  often  the  last  con- 
sideration with  a  numerous  class  of  careless  or  dishonest 


'  "  After  the  judicial  proof  or  confes- 
sion of  the  debt,  thirty  days  of  grace 
were  allowed  before  a  Roman  was  de- 
livered into  the  power  of  his  fellow- 
citizens.  In  this  private  prison,  twelve 
ounces  of  rice  were  his  daily  food  ;  he 
might  be  bound  with  a  chain  of  fifteen 
pounds'  weight ;  and  his  misery  was 
thrice  exposed  in  the  market-place,  to 
solicit  the  compassion  of  his  friends 
and  countrymen.  At  the  expiration  of 
sixty  days,  the  debt  was  discharged  by 
the  loss  of  liberty  or  life  ;  the  insolvent 
debtor  was  either  put  to  death,  or  sold 
in  foreign  slaver)'  beyond  the  Tiber  ; 
but,  if  several  creditors  were  alike  ob- 
stinate and  unrelenting,  they  might 
legally  dismember  his  body,  and  sati- 
ate their  revenge  by  this  horrid  parti- 
tion. The  advocates  for  this  savage 
law  have  insisted,  that  it  must  strongly 
operate  in  deterring  idleness  and  fraud 
from  contracting  debts  which  they 
were  unable  to  discharge."     Gibbon's 


History  of  the  Decline  and  Fall  of  the 
Roman  Empire,  vol.  iv.,  pp.  372-373. 
It  seems  incredible  that  the  following 
extract  could  ever  have  found  its  way 
into  an  English  report  :  "  If  a  man 
be  taken  in  execution,  and  lie  in  prison 
for  debt,  neither  the  plaintiff  at  whose 
suit  he  is  arrested,  nor  the  sheriff  who 
took  him,  is  bound  to  find  him  meat, 
drink,  or  clothes  ;  but  he  must  live  on 
his  own,  or  on  the  charity  of  others  : 
and  if  no  man  will  relieve  him,  let  him 
die  in  the  name  of  God,  says  the  law  ; 
and  so  say  I."  Hyde,  Justice,  in  Manby 
V.  Scott,  I  Mod.  132  (A.D.  1663). 

*  "  The  tendency  of  legislation  for  the 
last  century  has  almost  uniformly  been 
in  favor  of  the  poor  but  honest  debtor, 
and  the  object  of  nearly  every  law  upon 
the  subject  has  been  to  discourage  and 
discountenance,  or  entirely  prevent,  the 
efforts  of  unfeeling  creditors  to  oppress 
and  punish  him  for  his  poverty."  Ste- 
vens v.  Merrill,  41  N.  H.  315.; 


§   2  INTRODUCTORY    OBSERVATIONS.  3 

insolvents.  Satisfied  of  utter  inability  to  pay  maturing 
debts,  their  remaining  property  is  frequently  diverted  to 
inequitable  purposes  or  squandered  with  reckless  profusion. 
The  confiding  creditor,  when  driven  to  the  necessity  of 
seeking  a  discovery  of  equitable  assets,  often  finds  at  the 
end  of  the  litigation  nothing  but  a  mass  of  worthless  secu- 
rities or  "  a  beggarly  account  of  empty  boxes."  ^  The  un- 
derlying reasons  for  this  deplorable  condition  of  affairs  will 
be  briefly  considered. 

§  2.  Prevalence  of  fraudulent  transfers— The  cause. — Since 
the  general  abolition  of  imprisonment  for  contract  debts, 
dishonest  people  have  grown  bolder  and  more  reckless,  and 
the  power  of  creditors  to  enforce  payment  of  just  obliga- 
tions has  been  correspondingly  diminished.  This  humane 
reform  in  our  law,  which  was  inspired  by  the  desire  to  re- 
lieve honest  but  unfortunate  debtors  from  the  painful  con- 
sequences formerly  incident  to  insolvency,  is  now  eagerly 
availed  of  by  unscrupulous  people  who  contract  obligations 
with  little  expectation  and  no  probability  of  fuHilling  them. 
Abolition  of  imprisonment  for  debt  removed  the  chief  bar- 
rier and  preventive  of  fraudulent  conveyances,  viz.  :  the 
terror  of  the  debtor's  prison.  The  personal  liberty  of  the 
debtor  being  no  longer  at  stake,  the  natural  tendency  has 
been  to  promote  reckless  and  extravagant  expenditures, 
and  to  encourage  and  foster  wild  business  speculations. 

The  cost  of  every  reform  must  be  borne  by  some  person 
or  class  of  persons,  and  creditors  are  at  the  jiresent  time 
paying  the  great  price  exacted  by  this  radical  change  in 
remedies.  The  collection  of  a  debt  by  ortlinary  process 
of  execution  against  property  on  a  judgment  is  now  com- 
paratively a  rare  occurrence.  Hence  we  have  in  our  modern 
jurisprudence  a  perplexing  problem  with  which  our  fore- 
fathers were  little  vexed, — /.  e.,  the  ()uesii()n  iiow  to  neu- 
tralize   or  avoid,   in   favor  of  creditors,   colorable   or   cov- 


'  Burtus  V.  Tisdall,  4  Barb.  (N.  Y.)  590. 


4  INTRODUCTORY    OBSERVATIONS.  §   2 

incus  transfers  of  property  which  this  violent  change  in 
remedies  has  rendered  it  difficult,  if  not  impossible,  to  pre- 
vent or  suppress.  Collusive  voluntary  conveyances  and 
secret  fraudulent  trusts  and  reservations  of  a  thousand  dyes, 
calculated  to  hinder  and  defraud  creditors,  are  the  constant 
and  daily  subject  of  investigation  in  our  courts.  The  temp- 
tation of  debtors  who  have  not  the  skill  to  acquire  property 
honestly,  or  who  have  been  overwhelmed  by  some  unavoid- 
able disaster,  to  enrich  themselves  at  the  expense  of  their 
creditors,  by  some  transaction  "  wearing  a  deep  complexion 
of  fraud,"  seems  to  be  irresistible.  This  is  especially  the 
case  in  a  country  such  as  ours,  where  the  comforts  and  de- 
lights which  accumulated  property  brings  are  so  accessible 
and  well  guarded,  and  in  which  the  acquisition  of  wealth 
may  be  regarded  as  a  profound  passion.  It  may  be  possible 
to  pity  the  infirmity  of  the  human  mind,  sinking  under  an 
approaching  pressure  of  distress,  and  resorting  to  fraudulent 
means  of  protection  and  provision  for  a  family,  but  the  law 
cannot  approve  or  sanction  such  transactions.^  Probably 
the  most  severe  trial  to  which  an  honest  man  can  be  sub- 
jected is  the  inability  to  pay  his  debts,  even  by  the  applica- 
tion of  all  his  means.  He  is  assailed  by  temptations  of  in- 
terest, of  pride,  of  shame,  of  affection,  to  wander  from  the 
straight  line  of  duty  and  integrity,  while  at  the  same  time  he 
is  intrusted  by  the  law  with  dominion  over  property  which 
equitably  and  justly  should  be  devoted  to  his  creditors,^ 

The  quantity  of  litigation  engendered  by  fraudulent  con- 
veyances is  appalling,  and  the  cunning  devices  and  intri- 
cate schemes  resorted  to  by  debtors  to  elude  the  vigilance 
of  creditors  would,  if  no  moral  turpitude  was  involved,  chal- 
lenge admiration.  The  condition  of  the  body  of  our  law 
upon  this  subject  is  far  from  satisfactory,  and  may  be  said 
to  still  be  in  a  formative  and  unsettled  state. 


1  See  Croft  v.  Townsend,  3  Desaus.        -  Hafner  v.   Irwin,    i   Ired.  (N.  C.) 
(S.  C.)  229.  Law,  499. 


§§  3>  4  FORMS    OF    RELIEF.  5 

§  3.  Scope  of  the  inquiry. —  It  will  be  the  purpose  of  the 
first  portion  of  this  treatise  to  elucidate  the  principles  of 
law  affecting  conveyances  made  in  fraud  of  creditors,  both 
in  this  country  and  in  England,  and  to  point  out,  somewhat 
at  length,  the  practical  methods  by  which  such  collusive 
trusts  can  be  successfully  unraveled,  the  property  regained 
for  creditors,  and  the  prevalent  modern  tendency  of  debtors 
to  hinder,  delay,  and  defraud  their  creditors  correspondingly 
repressed.  Bills  filed  to  reach  equitable  assets,  not  subject 
to  execution,  will  necessarily  receive  incidental  considera- 
tion. 

The  power  of  a  creditor  to  inflict  anything  in  the  nature 
of  a  punishment  upon  his  debtor  being  practically  abro- 
gated in  civil  procedure,^  his  right  to  a  thorough  and  search- 
ing investigation  as  to  transfers  of  the  debtor's  property,  in 
the  disposition  of  which  the  creditor  may  justly  claim  to 
have  an  equitable  interest,^  at  least  to  the  extent  of  his  de- 
mand, should  manifestly  be  facilitated.  Such,  we  are  happy 
to  notice,  is  the  general  modern  tendency  of  the  law,  and 
one  of  the  aims  of  this  treatise  will  be  to  show  the  need  of 
a  still  further  enlargement  of  these  facilities.  The  practical 
details  of  procedure  in  this  class  of  litigation  will  receive 
particular  attention.  The  rights  of  bona  fide  purchasers 
and  grantees  of  debtors  for  valuable  consideration  will  nec- 
essarily be  embraced  in  the  discussion. 

§  4.  Forms  of  relief. — It  may  be  observed  that  the  general 
purpose  of  creditors'  actions  is  two-fold  ;  fust,  to  reach 
assets,  such  as  choses  in  action,  which  by  their  intrinsic 
nature  cannot  be  taken,  on  execution  at  law  ;  and  second, 
to  recover  property,  whether  tangible  or  intangible,  which 


'  It  is  not  the  function  of  a  court  of  See  Waters  v.  Taylor,  2  Vcs.  &  B.  299. 

equity  to  consider  fraud  in  the  light  of  Chancery  jurisdiction  in  cases  of  fraud 

a  crime,  nor  to  punish  the  guilty  party  may  be  invoked  in  a  civil  but  not  in  a 

by    imposing    exemplary   costs.      See  criminal  point  of  view. 
Waltham  v.  Broughton.  2  Atk.  43.    Nor        "  See  Egery  v.  Johnson,  70  Me.  261. 

to    exercise    any  censorial    authority.  See  §  14. 


6  ONUS    AS    TO    FRAUD.  §  5 

has  been  fraudulently  alienated  by  the  debtor.^  In  the  one 
case  the  creditor  comes  into  court  "  to  obtain  satisfaction 
of  his  debt  out  of  the  property  of  the  defendant,  which  can- 
not be  reached  by  execution  at  law";  in  the  other  case  he 
proceeds  "for  the  purpose  of  removing  some  obstructions 
fraudulently  or  inequitably  interposed  to  prevent  a  sale  on 
execution."  ^  It  is  believed  that  as  to  the  first  class  of  cases 
the  jurisdiction  of  equity  in  favor  of  creditors  was  created 
to  supplement  the  imperfect  relief  given  by  execution. 

§  5.  Onus  as  to  fraud — Suspicions  insufficient — Absence  of 
presumptions. — The  great  obstacles  to  the  effective  develop- 
ment of  the  branch  of  our  law  under  consideration  are  the 
natural  tendency  of  the  courts  not  to  presume  fraud  ^  in 
the  absence  of  substantial  proof  of  it,  and  the  extreme  diffi- 
culty attendant  upon  showing  that  a  transaction,  fair  and 
perfect  on  its  face,  and  having  every  semblance  of  validity, 
the  guilty  participants  in  which  are  often  the  chief  witnesses 


'  See  Chapter  III.  Hook,  36  Cal.  223 ;  Foster  v.  Brown, 

2  Cornell  v.  Radway,  22  Wis.  264 ;  65  Ind.  234 ;  Parkhurst  v.  McGraw,  24 

Beck  V.  Burdett,  i  Paige  (N.  Y.)  305.  Miss.  134;  Henckley  v.  Hendrickson, 

In  Jones  v.  Green,  i  Wall.  331,  Field,  5  McLean  170;   Bartlett  v.  Blake,  37 

J.,  said:  "A  court  of  equity  exercises  Me.   124;  Waddingham   v.  Loker,  44 

•its  jurisdiction  in  favor  of  a  judgment-  Mo.  132;  Kellogg  v.  Slavvson,  15  Barb. 

creditor  only  when  the  remedy  afforded  (N.  Y.)  58;  Brigham  v.  Tillinghast,  15 

him  at  law  is  ineftectual  to  reach  the  Barb.  (N.  Y.)  618;  Ex  parte  Conway, 

property  of  the  debtor,  or  the  enforce-  4  Ark.   356 ;  Burgert  v.  Borchert,   59 

ment  of  the  legal  remedy  is  obstructed  Mo.  80;  Herring  v.  Wickham,  29Gratt. 

by  some  incumbrance  upon  the  debt-  (Va.)  628;   Semmens  v.  Walters,    55 

or's  property,  or  some  fraudulent  trans-  Wis.  684 ;  James  v.  Van  Duyn,  45  Wis. 

ferof  it."  512;  Fuller  v.  Brewster,  53  Md.  359; 

^  See  Crawford  v.  Kirksey,  50  Ala.  Grover  v.  Wakeman,  1 1  Wend.  (N.  Y.) 

591;   Kempner  v.  Churchill,  8  Wall.  192;   Troxall  v.    Applegarth,   24   Md. 

369;  Erb  V.  Cole,  31  Ark.  556;  Pusey  163;  Anderson  v.  Roberts,  18  Johns. 

V.  Gardner,  21  W.  Va.  469 ;  Toney  v.  (N.  Y.)  515;  Cunningham  v.  Dwyer, 

McGehee,    38   Ark.   427;    Matthai   v.  23  Md.  219;  Juzan  v.  Toulmin,  9  Ala. 

Heather,  57  Md.  484 ;  White  v.  Perry,  662;  Nichols  v.  Patten,   iS  Me.  231; 

14  W.  Va.  86;  Hord's  Adm'r  v.  Col-  Cowee  v.  Cornell,  75  N.  Y.  99;  Killian 

bert,  28  Gratt.  (Va.)  49 ;  Williamson  v.  v.  Clark,  3  MacAr.  (D.  C.)  379,  affi'd 

Williams,  11   Lea  (Tenn.)  356;  Tog-  as  Clark   v.  KiUian,   103  U.    S.   766; 

nini  v.  Kyle,  15  Nev.  464;  Hempstead  Jones  v.  Simpson,  116  U.  S.  615. 
V.  Johnston,  18  Ark.  123;  Thornton  v. 


§  5  ONUS    AS    TO    FRAUD.  7 

in  subsequent  judicial  inquiries,  is  in  fact  vicious  and  color- 
able. Then  there  exists  in  some  quarters  an  unconscious 
sympathy  with  or  for  debtors  whose  fraudulent  acts  and 
transactions  bear  the  imprints  of  intellectual  acuteness. 
The  clever  or  brilliant  scoundrel  too  often  escapes  with  his 
ill-gotten  gains  in  the  maze  of  admiration  excited  by  his 
audacity.  Fraud,  it  is  also  argued,  will  not  be  lightly  im- 
puted,^ and  cannot  be  established  by  circumstances  of  mere 
suspicion.^  Irregularities  and  carelessness  sufficient  to  arouse 
a  suspicion  do  not  supply  the  place  of  proof  of  fraud. '^  It 
will  not  be  presumed  where  an  instrument  admits  of  an 
opposite  construction.^  The  common  law,  it  is  said,  is 
tender  of  presuming  fraud  from  circumstances,  and  expects 
that  it  be  manifest  or  plainly  inferable.^  Courts  will  attrib- 
ute errors  to  mistake  rather  than  to  fraud, ^  and  will  not 
base  conclusions  of  fraud  upon  mistaken  expressions  of 
opinion.'''  A  dishonest  purpose  should  not  be  presumed.^ 
Again,  it  is  vaguely  asserted  that  fraud  is  a  fact  which  must 
be  proved.  Courts  will  not  strive  to  force  conclusions  of 
fraud.^  There  must  be  something  more  than  mere  specu- 
lative inference.^''  And  if  the  party  charging  fraud  does  no 
more  than  create  an  equilibrium  he  fails  to  make  out  his 
case."  As  we  shall  presently  see,  it  is  not  enough  to  create 
a  suspicion  of  wrong.^^     The  creditor  must  prove  tangible 

'  Jones  V.  Simpson,  1 16  U.  S.  6i  5.  'See  Hubbell  v.  Meigs,  50  N.  Y.  480  ; 

"^  Erb  V.  Cole,  31   Ark.  556;  Pratt  v.  Wakeman  v.  Dalley,  51  N.  Y.  27. 

Pratt,  96  111.  184;  Myers  V.  Sheriff,  21  "Raymond    v.    Morrison,    59    Iowa 

La.  Ann.  172;  White  v.  Perry,  14  W.  374;  Hager  v.  Thomson,  i  Black  80; 

Va.  86;   Bryant  v.  Simoneau,   51    111.  Grant  v.  Ward,  64  Me.  239;  Jones  v. 

327;  Buckv.  Sherman,  2  Doug.  (Mich.)  Simpson,    116   U.   S.   615;    Brown    v. 

176;  Jewett  V.  Bowman,  29  N.J.  Eq.  Dean,  52  Mich.  267;  Wood  v.  Clark. 

174;  Batchelder  v.  White,  80  Va.  103;  121  111.  359. 

Daniel  v.Vaccaro,  41  Ark.  325.  "  Crawford  v.  Kirkscy,  50  Ala.  591. 

3  Jewett  V.  Bowman,  29  N.J.  Eq.  174.  '°  Battles  v.  Laudenslager.  84  Pa.  St. 

*  Bank  of  Silver  Creek  v.  Talcott,  22  451  ;  ^-^  ArrA-  Conway,  4  Ark.  356; 
Barb.  (N.  Y.)  560.  Toney  v.  McGehee.  38  Ark.  427  ;  Good- 

*  Roberts  on  Fraud.  Conv.,  p.  12.  man  v.  Simonds,  20  How.  360. 

«  Ayres  v.  Scribner,  17  Wend.  (N.  Y.)         "  Kainc  v.  Weiglcy.  22  Pa.  St.  179. 
407  ;  Goode  v.  Hawkins,  2  Dev.  Eq.         '■  Crow  v.   Andrews,   24  Mo.  App. 
(N.  C.)393.  159- 


8  ONUS    AS    TO    FRAUD.  §  6 

facts  from  which  a  legitimate  inference  of  a  fraudulent  in- 
tent can  be  drawn.^  The  evidence  must  convince  the  under- 
standing that  the  transaction  was  entered  into  for  a  purpose 
prohibited  by  law.^  Hence  "  a  court  will  not  presume  fraud 
and  undue  influence  merely  from  the  fact  that  the  convey- 
ance is  made  by  a  sister  to  a  brother";^  nor  from  circum- 
stances which  merely  indicate  unusual  generosity.*  pinch, 
J.,  in  delivering  the  opinion  of  the  New  York  Court  of 
Appeals,  said  :  "  Fraud  is  to  be  proved  and  not  presumed.® 
It  is  seldom,  however,  that  it  can  be  directly  proved,  and 
usually  is  a  deduction  from  other  facts  which  naturally  and 
logically  indicate  its  existence.  Such  facts,  nevertheless, 
must  be  of  a  character  to  warrant  the  inference.  It  is  not 
enough  that  they  are  ambiguous,  and  just  as  consistent  with 
innocence  as  with  guilt.  They  must  not  be,  when  taken 
together  and  aggregated,  when  interlinked  and  put  in 
proper  relation  to  each  other,  consistent  with  an  honest  in- 
tent. If  they  are,  the  proof  of  fraud  is  wanting."  ^  Dan- 
iels, J.,  said,  in  Marsh  v.  Falker  :^  "  In  all  actions  for  deceit 
the  presumption  is  in  favor  of  innocence;  and  on  that 
account  the  intent  or  design  to  deceive  the  plaintiff  must 
be  affirmatively  made  out  by  evidence."^ 

§  6.  —  The  badges  and  evidences  of  fraud  will  be  dis- 
cussed presently.^  We  may  here  observe  that  mere  inad- 
equacy of  consideration,  unless  extremely  gross,  does  not 


'  Jaeger   v.   Kelley,    52  N.  Y.   276 ;  *  First  National   Bank  v.  Irons,  28 

White  V.  Perry,  14  W.  Va.  86  ;  Hord's  N.  J.  Eq.  43. 

Adm'r  v.  Colbert,  28  Gratt.  (Va.)  49;  »  Siting    Grover    v.    Wakeman,    11 

Herring  v.  Wickham,  29  Gratt.  (Va.)  Wend.  (N.  Y.)  188. 

628.  Circumstances  amounting  to  mere  ^  Shultz  v.  Hoagland,  85  N.  Y.  467. 

suspicion  of  fraud  are  not  to  be  deemed  See  Ames  v.  Gilmore,  59  Mo.  537. 

notice  of  it.    Simms  v.  Morse,  4  Hughes  '  40  N.  Y.  566. 

582.     See  Grant  v.  National  Bank,  97  »  See  Fleming  v.  Slocum,  18  Johns. 

U.  S.  80.  (N.  Y.)  403  ;  Jackson  v.  King,  4  Cowen 

'  Pratt  V.  Pratt,  96  111.  184.  (N.  Y.)  220;  Starr  v.  Peck,  i  Hill  (N. 

»  Spicer  v.  Spicer,  22  J.  &  S.  (N.  Y.)  Y.)  270. 

281.  9  See  Chap.  XVI. 


§  6  ONUS    AS    TO    FRAUD.  9 

per  se  prove  fraud.^  The  disparity  as  to  consideration 
must  be  so  glaring  as  to  satisfy  the  court  that  the  con- 
veyance was  not  made  in  good  faith.^  Neither  can  fraud 
be  presumed  unless  the  circumstances  on  which  such  pre- 
sumption is  founded  are  so  strong  and  pregnant  that  no 
other  reasonable  conclusion  can  be  drawn  from  them,'^  and 
it  seems  that  even  strong  presumptive  circumstances  of 
fraud  will  not  always  outweigh  positive  testimony  against 
it ;  *  nor  will  fraud  be  inferred  from  an  act  which  does  not 
necessarily  import  it.^  If  an  honest  motive  can  be  imputed 
equally  as  well  as  a  corrupt  one,  the  former  should  be  pre- 
ferred.^ 

Good  faith  in  business  transactions  is  a  settled  presump- 
tion of  law,'''  and  the  burden  of  proof  is  on  the  party  who 
assails  good  faith  and  legality.^  Many  an  important  case 
has  been  wrecked  at  the  trial,  or  abandoned  by  the  cred- 
itor, on  account  of  the  great  embarrassments  which  this  for- 
midable onus  imposed.  This  presumption  is  the  creditor's 
stumbling-block  on  the  one  hand  and  the  shield  of  unscru- 
pulous debtors  on  the  other.  The  creditor  is  constantly 
forced  to  carry  the  war  into  the  enemy's  country,  and  to 
take  by  storm  the  fortifications  which  the  fraudulent  debtor 
or  his  allies  have  carefully  constructed  to  impede  or  repel 
the  attack.     It  is  said  in  Nicol  v.  Crittenden,^  that  it  is 


'  Kempner  v.  Churchill,  8  Wall.  369 ;  weiler  v.  Lackmann,  39  Mo.  91  ;  Rob- 
Smith  V.  Henkel,  81  Va.  529.  erts  v.  Guernsey,  3  Grant  (Pa.)  237  ; 

'^  Fuller   V.    Brewster,   53   Md.    361.  Reeves  v.  Dougherty,  7  Yerg.  (Tenn.) 

Compare  Feigley  v.  Feigley,  7  Md.  537  ;  222  ;  Richards  v.  Kountze,  4  Neb.  200 ; 

Copis  V.  Middleton,  2  Madd.  410 ;  Rat-  Best  on  the  Right  to  Begin  and  Reply. 

cliffy.  Trimble,  12  B.  Mon.  (Ky.)  32.  p.  57  ;  Williams  v.  Lord,  75  Va.  390; 

2  Paxton  V.  Boyce,  i  Tex.  317.     See  Wakeman   v.    Dalley.    51    N.    Y.    31  ; 

Clemens  v.  Brillhart,  17  Neb.  337.  Marsh  v.  Falker.  40  N.  Y.  566  ;  Starr 

•*  The  Short  Staple,  i  Gail.  104.  v.  Peck,  i  Hill  (N.  Y.)  270  ;  Bcatty  v. 

^  Toney  v.  McGehee.  38  Ark.  427.  Fishel,  ico  Mass.  448. 

«  Herring   v.    Richards,   i    McCrary        "  Gutzwciler  v.   Lackmann.   39  Mo. 

574.  91  ;  Silvers  v.  Hedges,  3  Uana  (Ky.) 

•>  Hager  v.  Thomson,  i   Black  80;  439;  Wilson  v.  Lazier,  ii  Gratt.  (Va.) 

Cooper  V.   Galbraith,    3    Wash.    546  ;  477. 
Blaisdell  v.  Cowell,  14  Me.  370  ;  Gutz-        "  55  Ga.  497. 


lO 


JUDGE    black's    views.  §   7 


impossible  for  a  transfer  to  be  in  fraud  of  creditors  unless 
it  is  made  with  a  fraudulent  intent,  and  that  the  nature  of 
the  intent  will  not  be  presumed  as  matter  of  law,  but  is  to 
be  inferred  by  the  jury  from  the  facts  in  evidence.  This 
broad  statement  of  the  principle  is  at  least  debatable  and 
will  be  considered  presently.^  Then  in  Cummins  v.  Hurl- 
butt,*^  it  was  asserted  that  to  set  aside  a  written  instrument 
on  the  orround  of  fraud,  the  evidence  of  the  fraud  must  be 
clear,  precise,  and  indisputable.  A  jury  should  not  be  per- 
mitted to  find  fraud  to  impeach  a  settlement  in  writing  on 
any  fancied  equity,  or  on  vague,  slight,  or  uncertain  evi- 
dence, even  though  they  might  think  it  fairly  and  fully  sat- 
isfied them.  As  a  general  rule  the  transaction  which  is  the 
subject  of  attack  has  been  evidenced  in  writing,  and  the 
cases  show  that  a  deliberate  deed  or  writing,  or  a  judgment 
of  a  court,  is  of  too  much  solemnity  to  be  brushed  away  by 
loose  and  inconclusive  evidence.^ 

Fraud,  on  the  other  hand,  is  rarely  perpetrated  openly 
and  in  broad  daylight.  It  is  committed  in  secret  and  pri- 
vately, and  is  usually  shrouded  in  mystery  and  hedged  in 
and  surrounded  by  all  the  guards  which  can  be  invoked  to 
prevent  discovery  and  exposure.  Its  operations  are  invari- 
ably circuitous  and  difficult  of  detection.^  The  proof  of  it 
is  very  seldom  positive  and  direct,^  but,  as  we  shall  pres- 
ently see,  is  dependent  upon  very  many  little  circumstances 
and  conclusions  to  be  drawn  from  the  general  aspects  of 
the  case.'' 

§  7.  Judge  Black's  views.  —  The   learned    Chief  -Justice 


'  See  Coleman  v.  Burr,  93  N.  Y.  31,  *  Strauss   v.    Kranert,    56   111.    254; 

and  cases  cited.     See  §§  9,  10.  Rea  v.  Missouri,  17  Wall.  532  ;  Dens- 

-  92  Pa.  St.  165.  more  v.  Tomer,  ir  Neb.  118;   Lock- 

^  See  Rowland  v.  Blake,  97  U.  S.  hard  v.  Beckley,  loW.  Va.  87 ;  Farmer 

624  ;  Fick  V.  Mulholland,  48  Wis.  413  ;  v.  Calvert,  44  Ind.  209. 

Kent  V.  Lasley,  24  Wis.  654  ;  Harter  ^  Newman  v.  Cordell,  43  Barb.  (N. 

V.  Christoph,  32  Wis.  246  ;  McClellan  Y.)  448-461.     See  z«/ra.  Chapter  XVI. 

V.  Sanford,  26  Wis.  595.  on  Indicia  or  Badges  of  Fraud. 

*  Kaine  v.  Weigley,  22  Pa.  St.  182. 


§  7  JUDGE    black's    views.  II 

Black  urged  that  the  proposition  that  fraud  could  never  be 
presumed,  but  must  be  proved,  could  be  admitted  only  in 
a  qualified  and  very  limited  sense.  The  idea  that  it  was  a 
fundamental  maxim  of  the  law,  incapable  of  modification, 
and  open  to  no  exception,  was  denied,  and  the  principle 
was  said  to  have  scarcely  extent  enough  to  give  it  the  dig- 
nity of  a  general  rule.  This  vigorous  writer  observes  :  "It 
amounts  but  to  this  :  that  a  contract,  honest  and  lawful  on 
its  face,  must  be  treated  as  such  until  it  is  shown  to  be 
otherwise  by  evidence  of  some  kind,  either  positive  or  cir- 
cumstantial. It  is  not  true  that  fraud  can  never  be  pre- 
sumed. Presumptions  are  of  two  kinds,  legal  and  natural. 
Allegations  of  fraud  are  sometimes  supported  by  one  and 
sometimes  by  the  other,  and  are  seldom,  almost  never,  sus- 
tained by  that  direct  and  plenary  proof  which  excludes  all 
presumption.  A  sale  of  chattels  without  delivery,  or  a  con- 
veyance of  land  without  consideration,  is  conclusively  pre- 
sumed to  be  fraudulent  as  against  creditors,  not  only  with- 
out proof  of  any  dishonest  intent,  but  in  opposition  to  the 
most  convincing  evidence  that  the  motives  and  objects  of 
the  parties  were  fair.  This  is  an  example  of  fraud  estab- 
lished by  mere  presumption  of  law.  A  natural  presumption 
is  the  deduction  of  one  fact  from  another.  For  instance  : 
a  person  deeply  indebted,  and  on  the  eve  of  bankruptcy, 
makes  over  his  property  to  a  near  relative,  who  is  known 
not  to  have  the  means  of  paying  for  it.  From  these  facts 
a  jury  may  infer  the  fact  of  a  fraudulent  intent  to  hinder  and 
delay  creditors.  A  presumption  of  fraud  is  thus  created, 
which  the  party  who  denies  it  must  repel  by  clear  evidence, 
or  else  stand  convicted.  When  creditors  are  about  to  be 
cheated,  it  is  very  uncommon  for  the  perpetrators  to  pro- 
claim their  purpose,  and  call  in  witnesses  to  see  it  done.  A 
resort  to  presumptive  evidence,  therefore,  becomes  abso- 
lutely necessary  to  protect  the  rights  of  honest  men  from 
this,  as  from  other  invasions."  ^     The  statement  that  "  fraud 

'  Kaine  v.  Weigley,  22  Pa.  St.  183. 


^ 


12  MORAL    TURPITUDE.  §  8 

will  not  be  presumed  "  must  be  accepted  understandingly, 
for  it  certainly  can  be  inferred  from  facts  and  circumstances,^ 
and  it  is  considered  to  be  error  to  charge  a  jury  that  they 
cannot  predicate  fraud  upon  inference  or  implication,^  or 
that  the  proof  must  be  "  irresistible,"  '^or  "clear  and  undoubt- 
ed,'"* or  that  it  must  be  established  beyond  a  reasonable 
doubt, ^  for  evidence  that  satisfies  the  mind  will  support  a 
conclusion  of  fraud  although  it  may  not  lead  to  a  convic- 
tion of  absolute  certainty.*^ 

§  8.  Proof  of  moral  turpitude. — The  authorities  have  been 
multiplying,  in  certain  quarters  at  least,  to  strengthen  the 
efforts  of  creditors  to  overcome  this  difficulty  arising  from 
the  presumption  of  validity  and  good  faith.  Many  of  the 
cases  attach  but  little  importance  to  the  sworn  assertion 
of  perfect  good  faith  and  entire  honesty  on  the  part  of  the 
purchaser,'^  or  of  the  seller,  and  the  courts  are  trying  to 
unravel  these  transfers  without  exacting  explicit  proof  of 
moral  turpitude.^     The  intent  or  intention  is  regarded  as 

^Lovvryv.  Beckner,5B.Mon.(Ky,)43.  v.  Bailey,  5  Fla.  20;  Walter  v.  Lane,  i 
'■*  Bullock    V.    Narrott,    49    111.    62 ;  MacAr.  (D.  C.)  275. 
O'Donnell    v.    Segar,   25  Mich.   367;        ^  Mr.  May  says:  "The  statute  is  di- 
Reed  v.  Noxon,  48  III.  323.  rected  not  only  against  such  transfers 
^  Carter  v.  Gunnels,  67  111.  270.  of  property  as  are  made  with  the  ex- 
■*  Abbey  v.  Dewey,  25  Pa.  St.  413.  press  intention  of  defrauding  creditors, 
'  Kane  v.  Hibernia  Ins.  Co.,  39  N.  but  ....  extends  as  well  to  such  as 
J.  L.  697  ;  Lee  v.  Pearce,  68  N.  C.  76 ;  virtually   and    indirectly    operate    the 
Sparks  V.  Dawson,  47  Tex.  138;  Wash-  same  mischief,  by  abusing  their  con- 
ington  Union  Ins.  Co.  v.  Wilson,  7  Wis.  fidence,  misleading  their  judgment,  or 
169;  ^tna  Insurance  Co.  v.  Johnson,  secretly  undermining  their  interests; 
1 1  Bush  (Ky.)  587.  to  obviate  which  it  has  gradually  grown 
^  Marksbury  v.  Taylor,  10  Bush  (Ky.)  into  a  practice  to  regard  certain  acts  or 
519;  O'Donnell  V.  Segar,  25  Mich.  367;  circumstances  as   indicative   of  a   so- 
Lee  V.  Pearce,  68  N.  C.  76  ;  Linn  v.  called  fraudulent  intention  in  the  con- 
Wright,  18  Texas  317  ;    Lockhard  v.  struction  of  the  statutes,  although  per- 
Beckley,    10  W.   Va.   87  ;    Young    v.  haps  there  was,  in  fact,  no  actual  fraud 
Edwards,  72  Pa.  St.  257  ;    Bryant   v.  or  moral  turpitude.     It  is  difficult   in 
Simoneau,  51  111.  324.  many  cases  of  this  sort  to  separate  the 
'  See  Hadden  v.   Spader,  20  Johns,  ingredients    which    belong  to  positive 
(N.  Y.)  572,  573;  Hendricks  v.  Robin-  and  intentional  fraud  from  those  of  a 
son,  2  Johns.  Ch.  (N.  Y.)  300  ;  Fellows  mere  constructive  nature,   which   the 
V.  Fellows,  4  Cow.  (N.  Y.)  709;  Barrow  law  thus  pronounces  fraudulent  upon 


§  8  MORAL   TURPITUDE.  I  3 

an  emotion  of  the  mind,  shown  by  acts  and  declarations, 
and,  as  acts  speak  louder  than  words,  if  a  party  is  guilty  of 
an  act  which  defrauds  another,  his  declaration  that  he  did 
not  by  the  act  intend  to  defraud,  is  weighed  down  by  the 
evidence  of  his  own  act.^  A  person  would  not  be  likely  to 
accomplish  an  act  and  afterward  say  that  it  was  prompted 
by  corrupt  motives.  The  moral  sense  is  much  weaker  in 
some  men  than  in  others,  and  it  would  be  a  strange  rule 
which  made  one  man's  rights  dependent  upon  another's 
moral  sense.  There  are  certain  rules  founded  in  experience 
and  established  by  law  for  determining  the  validity  of  trans- 
fers under  the  statutes  concerning  fraudulent  conveyances ; 
and  a  transgression  of  these  rules  will  justify  courts  and 
juries  in  avoiding  the  transaction  without  regard  to  the 
opinions  of  the  parties  to  it,  and  their  evidence  should  have 
little  weight.^ 

In  French  v.  French,^  Lord  Chancellor  Cranworth  re- 
marked :  "  I  shall  not  say  that  the  transfer  was  voluntary 
ox  fraMclulent,  but  simply  void  as  against  the  creditors  of 
William  French."  Again  he  observed  in  Spackman  v. 
Evans  :"*  "I  do  not  attribute  moral  fraud  to  the  appellant, 
but  the  whole  transaction  was  fictitious."  So  in  Backhouse 
V.  Jett,^  Chief-Justice  Marshall  said:  "The  policy  of  the 
law  very  properly  declares  this  gift  void  as  to  creditors,  but 
looking  at  the  probable  views  of  the  parties  at  the  time, 
there  appears  to  be  no  moral  turpitude  in  it."*^  This  prin- 
ciple may  be  further  illustrated  from  Gardiner  Bank  v. 
VVheaton,'^  where  the  court  say  :  "  When  we  pronounce  the 
transaction  between  the  defendants,  in  respect  to  the  con- 
veyance  from  Gleason  to  Cole,  as  fraudulent,  wc  do  not 


principles  of  public  policy."     May  on  '  6  De  G.,  M.  &  G.  103. 

Fraudulent  Conveyances,  p.  4.  ■*  L.  R.  3  Kng-  «-''^'  •''•  ^pp.  1S9. 

1  Babcock  v.  Eckler,  24  N.  Y.  623;  '  1  Brock.  511. 

Newman  v.  Cordell,  43  Barb.  (N.  Y.)  '  See  Logan  v.  Brick,  2  Del.  Ch.  206. 

456.     See /«/rrt,  chapter  on  Intention.  "  8  Me.  3S1.     See  Whccldcn  v.  Wil- 

"^  Potter  V.  McDowell,  31  Mo.  73.  son,  44  Me.  11. 


14  MORAL    TURPITUDE.  §  8 

mean  to  insinuate  that  there  was  any  moral  turpitude  on  the 
part  of  Prince  ;  nor  do  we  believe  there  was  any  ;  but 
though  the  motives  of  a  party  may  be  good  in  such  a  trans- 
action, still,  where  the  design,  if  sanctioned,  would  defeat  or 
delay  creditors  ....  neither  law  nor  equity  can  sanction 
the  proceeding ;  and  on  that  account  it  is  termed  a  legal 
fraud,  or  a  fraud  upon  the  law."  '  "  It  was  not  necessary," 
said  Dwight,  C,  in  Cole  v.  Tyler,^  "that  there  should  be 
any  actual  fraudulent  intent.^  The  requisite  intent  may  be 
inferred  from  the  circumstances  of  the  case."  ^  The  act  may 
be  adjudged  covinous  although  the  parties  deny  all  inten- 
tion of  committing  a  fraud,^  and  it  is  not  necessary  to  im- 
pute to  the  parties  "a  premeditated  or  wicked  intention  to 
destroy  or  injure"  the  interests  of  others.^  A  man  may 
commit  a  fraud  without  believing  it  to  be  a  fraud.^  The 
statute,  13  Eliz.,  refers  to  a  legal,  and  not  a  moral  intent; 
that  is,  not  a  moral  intent  as  contradistinguished  from  a 
legal  intent.  It  supposes  that  every  one  is  capable  of  per- 
ceiving what  is  wrong,  and,  therefore,  if  he  does  that  which 
is  forbidden,  intending  to  do  it,  he  will  not  be  allowed  to 
say  that  he  did  not  intend  to  do  a  prohibited  act.  A  man's 
moral  perceptions  may  be  so  perverted  as  to  imagine  an  act 
to  be  fair  and  honest  which  the  law  justly  pronounces 
fraudulent  and  corrupt.^  "  It  is  not  important  what  motives 
may  have  animated  the  parties,"  if  the  necessary  effect  of 
the  disposition  is  to  hinder  and  delay  creditors.^  It  results 
that  the  mental  operation  or  emotion  of  the  debtor,  and  the 
legal  conclusion  from  the  acts  and  circumstances  may  be 
diametrically  opposed. 

'  See   Jenkins  v.    Lockard,  66    Ala.  ^  Kirby  v.    Ingersoll,    i    Harr.    Ch. 

381  ;  Bibb  v.  Freeman,  59  Ala.  6i2.-  (Mich.)  191. 

*  65  N.  Y.  T].  »  Kirby  v.  Ingersoll,  i  Doug.  (Mich.) 

*  Citing  Mohawk  Bank  v.  Atwater,  477,  493. 

2  Paige  (N.  Y.)  54.  "^  Emma  Silver  Mining  Co.  v.  Grant, 

■•  Compare  Watson  v.  Riskamire,  45  L.  R.  17  Ch.  D.  122. 

Iowa  233;  Coleman  v.  Burr,  93  N.  Y.  "  Grover  v.  Wakeman,  11  Wend.  (N. 

31  ;   Graham   v.   Chapman,    12  C.   B.  Y.)  225. 

85.  *  Moore  v.  Wood,  100  111.  451. 


§  9  FRAUD    IN    FACT.  I  5 

§  9.  Fraud  in  fact  and  fraud  in  law. — Some  of  the  cases 
maintain  that  there  is  not,  for  any  practical  purpose,  so  far 
as  the  validity  of  the  particular  transaction  may  be  con- 
cerned, any  difference  between  fraud  in  fact  and  fraud  in 
law  ;  ^  between  a  fraud  proved  by  direct  evidence,  and  a 
fraud  inferred  by  law  from  facts  which  are  consistent  with 
the  absence  of  an  actual  intent  to  defraud.  Whenever 
the  effect  of  a  particular  transaction  with  a  debtor  is  to 
hinder,  delay,  or  defraud  creditors,  the  law  infers  the  intent, 
though  there  may  be  no  direct  evidence  of  a  corrupt  or 
dishonorable  motive,  but  on  the  contrary,  an  actual  honest 
motive  existed.  The  law  interposes,  and  declares  that  every 
man  is  presumed  to  intend  the  natural  and  necessary  con- 
sequences of  his  acts  ;  and  the  courts  must  presume  the 
intention  to  exist,  when  the  prohibited  consequences  must 
necessarily  follow  from  the  act,  and  will  not  listen  to  an 
argument  against  it.^  Hence  it  has  been  remarked  that 
where  a  conveyance  by  its  terms  operates  to  hinder,  delay, 
or  defraud  creditors,  the  intent  to  do  so  is  imputed  to  the 
parties,  and  no  evidence  of  intention  can  change  that  pre- 
sumption. A  different  intent  cannot  be  shown  and  made 
out  by  the  reception  of  parol  testimony,  nor  deduced  from 
surrounding  circumstances.'^  What  is  meant  by  these  cases 
is  that  whether  the  fraudulent  intent  is  reasoned  out  and 
declared  by  the  court  by  the  proper  application  of  the  rules 


'  See  §  51.  supposition  of  an    immoral   intention, 

-  Sims  V.  Gaines,  64  Ala.  396  ;  Pope  yet   it   has  been  judged  necessary  to 

V.  Wilson,  7  Ala.  694 ;  Wiley  v.  Knight,  determine,  that  certain  circumstances, 

27  Ala.  336;  Potter  v.  McDowell,  31  which,  in  their  nature,  tend  to  deceive 

Mo.  69.     See  Bentz  v.  Rockey,  69  Pa.  and  injure  creditors,  shall  be  considered 

St.  77  ;  Harman  v.  Hoskins,  56  Miss,  as  sufficient  evidence  of  fraud." 
142;  Allan  V.  McTavish,  8  Ont.  App.         ^Farrow    v.    Hayes,    51    Md.    505; 

Rep.  440,  and  cases  cited  ;  Coleman  v.  Green  v.  Trieber,  3  Md.  1 1.  See  Sang- 

Burr,  93   N.  Y.  31,  and    cases   cited,  ston  v.  Gaither,  3  Md.  40;    Malcolm 

Compare  State  v.  Estel,  6  Mo.  App.  6.  v.  Hodges,  8  .Md.  418;  Inlocs  v.  Amer. 

In  Wilt  v.  Franklin,  i  Binn.  (Pa.)  517,  Ex.  Bank,  11  Md.  173  ;  Bamitz  v.  Rice, 

the   court   observed  :    "  Although   the  14  Md.  24  ;  Whedbee  v.  Stewart.  40 

statute,  13  Eliz.,  is  bottomed  on  the  Md.  414. 


1 6  FRAUD    IN    LAW.  §   lO 

of  legal  construction  and  interpretation  to  the  particular 
transaction  or  instrument  under  consideration,  or  whether 
it  is  found  by  a  jury  to  exist  as  matter  of  fact/  in  either 
case  the  transfer  is  made  with  the  intent  to  defraud  credit- 
ors, and  may  be  avoided.  Hence  it  is  said  that  where  the 
fraudulent  intent  is  not  apparent  on  the  face  of  the  deed, 
it  is  a  question  of  fact  for  the  jury,^  and  the  court  has  not 
the  power  to  infer  the  intent.^ 

§  10.  The  cases  considered.— This  subject  may  perhaps  be 
illustrated  from  the  case  of  Harman  v.  Hoskins,''  where  it 
is  laid  down  that  the  intent  may  be  vicious,  though  the 
deed  is  fair  and  regular  upon  its  face,  and  a  full  price  was 
paid.  The  intent  must  then  be  proved  aliunde.  In  cases 
where  the  transaction  on  its  face  is  fair,  if  it  sprung  from 
the  motive  to  "  hinder,  delay,  or  defraud  "  creditors,  then 
the  intent  is  purely  a  question  of  fact  to  be  established  by 
the  testimony.  But  a  party  will  be  held  as  intending  the 
natural  and  inevitable  legal  effects  of  his  acts.  Hence  if 
his  deed  by  its  recitals  necessarily  operates  to  interpose  un- 
reasonable hindrance  and  delay  to  creditors,  or  to  entirely 
defeat  their  claims,  the  question  of  intent  will  be  practically 
a  conclusion  of  law.  A  deliberate  act  which  naturally  and 
inevitably  produces  a  certain  result,  must  in  law  be  held  to 
have  been  contrived  and  performed  to  carry  out  and  con- 
summate that  result.  The  court  in  such  a  case  arrives  at 
the  conclusion,  by  a  proper  construction  of  the  instrument, 
that  such  is  its  direct  and  inevitable  effect,  and  its  result, 
as  matter  of  law,  that  the  statute  is  satisfied.  In  other 
words,  the  transaction  itself  so  palpably  and  conclusively 
establishes  the  intent  that  testimony  upon  that  point  would 

'  Nicol  V.  Crittenden,  55  Ga.  497  ;  ^  Ehrisman  v.  Roberts,  68  Pa.  St. 

Williams  v.  Evans,  6  Neb.  216.  308  ;  Kelly  v.  Lenihan,  56  Ind.  450  ; 

2  Van  Bibber  v.  Mathis,  52  Tex.  409.  Tognini  v.  Kyle,  15  Nev.  468  ;  Mon- 

See  Briscoe  v.  Bronaugh,  i  Tex.  327  ;  teith  v.  Bax,  4  Neb.  166. 

Bryant  v.  Kelton,  i  Tex.  415  ;  Peiser  •*  56  Miss.  142. 
V.  Peticolas,  50  Tex.  638. 


§    lO  THE    CASES    CONSIDERED.  I  7 

be  superfluous,  and  a  finding  of  a  jury  of  an  intent  different 
from  that  which  the  legitimate  construction  of  the  instru- 
ment furnishes,  would  be  erroneous.^  Thus  in  Voung  v. 
Heermans,^  a  conveyance  by  a  debtor  of  all  his  property, 
real  and  personal,  without  consideration,  and  in  trust  for 
the  grantor's  benefit  during  his  life,  and  after  his  death  for 
the  payment  of  his  debts,  was  declared  to  be  fraudulent 
per  sc ;  no  evidence  aliu7ide  being  deemed  necessary  to 
establish  the  fraudulent  intent.  Proof  of  the  intention  to 
enter  into  the  prohibited  transaction  is  all  that  is  requisite. 
When  the  courts  declare  an  instrument  fraudulent  on  its 
face,  it  does  not  necessarily  mean  that  it  was  the  offspring 
of  a  corrupt  intent  considered  as  a  mental  operation,  but 
that  "  it  is  an  instrument  the  law  will  not  sanction  or  give 
effect  to,  as  to  third  persons,  on  account  of  its  susceptibility 
of  abuse,  and  the  great  danger  of  such  contracts  being  used 
for  dishonest  purposes."  ^ 

It  may  scarcely  be  proper  to  say  in  these  cases  that  there 
is  a  presumption  or  conclusion  of  law  that  the  transaction 
is  fraudulent,  but  rather  that  the  circumstances  of  the  trans- 
action, or  the  transaction  itself,  furnish  conclusive  evidence 
of  fraud  ;  and  if,  against  such  evidence,  a  jury,  a  judge,  or 
referee  should  find  that  there  was  no  fraud,  a  new  trial 
would  be  granted,  not  because  any  legal  presumption  or 
conclusion  had  been  violated,  but  because  the  finding  was 
against  the  weight  of  evidence  ;  against  conclusive  evi- 
dence.* The  intent  is  gathered  from  the  instrument,  and 
no  external  aid  is  necessary  to  develop  it.^  The  fraud  is 
self-evident.*'  But  to  find  fraud  as  matter  of  law  it  must  so 
expressly  and  plainly  appear  in  the  instrument  as  to  be  in- 
capable of  explanation  by  evidence  dehors? 

'  See  Dunham  v.  Waterman,  17  N.  ''  Harman  v.  Hoskins,  56  ^Tiss.  145. 

Y.  21.  ''  Hardy  v.  Simpson,  13  Irid.  (N.  C.) 

'■^  66  N.  Y.  374.  Law,  132,  139;  Bigelow  on  Fraud,  p. 

^  Gay  V.  Bidwell,  7  Mich.  531,  dis-  468. 

senting  opinion  of  Manning,  J.  '  Cheatham    v.  Hawkins,  76    N.  C. 

^  Babcock  v.  Eckler,  24  N.  Y.  632.  335. 
2 


1 8  THE    CASES    CONSIDERED.  §   lO 

Grover,  J.,  an  able  judicial  officer,  and  vigorous  writer, 
ignored  the  distinction  between  fraud  in  law  and  fraud  in 
fact,  in  these  words  :  "A  distinction  is  attempted,  in  some 
of  the  cases,  between  fraud  in  law  and  fraud  in  fact.  I  think 
there  is  no  solid  foundation  for  it.  When  upon  the  face  of 
the  assignment  any  illegal  provision  is  found,  the  presump- 
tion at  once  conclusively  arises  that  such  illegal  object  fur- 
nished one  of  the  motives  for  making  the  assignment ;  and 
it  is  upon  this  ground  adjudged  fraudulent  and  void.  The 
result  is  the  same  w^hen  the  illegal  design  is  established  by 
other  evidence.  The  inquiry  is  as  to  the  intention  of  the 
assignor."^  Coleman  v.  Burr^  is  an  extreme  illustration. 
The  referee  found  that  the  conveyance  was  honest,  but  the 
transaction  was  set  aside  because  from  the  facts  found  the 
inference  of  fraud  was  inevitable. 

"  Fraud,"  said  Mr.  Justice  Duller,  in  Estwick  v.  Caillaud,^ 
"  is  sometimes  a  question  of  law,  sometimes  a  question  of 
fact,  and  sometimes  a  mixed  question  of  law  and  of  fact." 
Perhaps  it  would  be  more  accurate  to  say  that  fraud  is  never 
purely  a  question  of  law,  nor  exclusively  a  question  of  fact,* 
though  it  frequently  partakes  more  largely  of  the  one  quality 
than  of  the  other.  Fraud  is  not  to  be  considered  as  turn- 
ing solely  on  intent  as  an  emotion,  but  as  a  legal  deduction. 
"  What  intent,"  said  Ruffin,  J.,  "  is  in  law  fraudulent,  the 
court  must  inform  the  jury,  else  the  law  can  have  no  rule 
upon  the  doctrine  of  fraud  ;  and  every  case  must  create  its 
own  law."^  Perhaps  the  clearest  division  of  fraud  is  into 
three  classes  ;  first,  fraud  that  is  self-evident,  with  which  the 
jury  have  nothing  to  do  ;  second,  fraud  which  depends  upon 
a  variety  of  circumstances  usually  connected  with  motive 

1  Oliver  Lee  &  Co.'s  Bank  v.  Talcott,         ''  93  N.  Y.  31. 

19  N.  Y.  148.     See,  in  this  connection,         ^  5  T.  R.  420. 

Lukins  v.  Aird,  6  Wall.  79,  per  Davis,  *  Foster  v,  Woodfin,  11  Ired.  (N.  C.) 

J. ;  Burr  v.  Clement,  9  Col.  i  ;  Stevens  Law,  339. 

V.  Robinson,   72  Me.  381  ;  French  v.  ^  Leadman  v.  Harris,  3  Dev.  (N.  C.) 

Holmes,  67  Me.  189;  Cunningham  v.  Law,  146. 

Freeborn,  1 1  Wend.  (N.  Y.)  252. 


^ 


1 1 


WORDS    "  HINDER,    DELAY,    OR    DEFRAUD. 


19 


and  intent,  which  is  an  open  question  of  fact  for  the  jury, 
with  instructions  as  to  what  constitutes  fraud  ;  third,  pre- 
sumptive fraud  where  the  presumption  may  be  rebutted.^ 

§  II.  Words  "  hinder,  delay,  or  defraud." — To  hinder  and 
delay  creditors  is  to  do  something  which  is  an  attempt  to 
defraud,  rather  than  the  successful  accomplishment  of  a 
fraud  ;  to  put  some  obstacle  in  the  path,  or  interpose  un- 
justifiably some  period  of  time  before  the  creditor  can  reach 
his  debtor's  property  and  apply  it  toward  the  liquidation  of 
the  debt.^  The  words  "  hinder,"  "  delay,"  '^  and  "  defraud  " 
are  not  synonymous.'*  A  conveyance  may  be  made  with 
intent  to  hinder  or  delay  without  an  intent  to  absolutely 
defraud.  Either  intent  is  sufficient.^  The  statute  is  in  the 
disjunctive  and  attempts  to  attach  a  separate  and  specific 
meaning  to  each  of  the  words  which  it  employs.*^  An  in- 
stance of  hindrance  and  delay  within  the  statute  is  given  in 


'  Hardy  v.  Simpson,  13  Ired.  (N.  C.) 
Law,  139.  In  Coburn  v.  Pickering",  3 
N.  H.  41 5,  Richardson,  C.  J.,  lays  down 
the  rule  that  whether  there  was  any 
trust  is  a  question  of  fact,  but  the  trust 
being  proved  or  admitted,  the  fraud  is 
an  inference  of  law  which  the  court 
must  pronounce.  His  exact  language, 
after  a  discussion  of  the  authorities,  is 
as  follows  :  "  It  thus  seems  to  us,  to  be 
settled,  as  firmly  as  any  legal  principle 
can  be  settled,  that  the  fraud  which 
renders  void  the  contract,  in  these 
cases,  is  a  secret  trust,  accompanying 

the   sale It   is,  therefore,  very 

clear,  that  fraud  is  sometimes  a  ques- 
tion of  fact,  and  sometimes  a  question 
of  law.  When  the  question  is,  was 
there  a  secret  trust,  it  is  a  question  of 
fact.  But  when  the  fact  of  a  secret 
trust  is  admitted,  or  in  any  way  estab- 
lished, the  fraud  is  an  inference  of  law, 
which  a  court  is  bound  to  pronounce." 
So,  upon  like  principle,  it  was  held  in 
Phelps  V.  Curts,  80  111.  112,  not  to  be 


important  what  motives  may  have  ani- 
mated the  parties,  if  they  have  so  dis- 
posed of  the  property  that  the  neces- 
sary effect  is  to  hinder  and  delay  credit- 
ors. Such  a  disposition  is,  in  judgment 
of  law,  a  legal  fraud.  To  the  same 
effect,  also,  is  Power  v.  Alston,  93  111. 
587  ;  Emerson  v.  Bemis,  69  111.  537  ; 
Moore  v.  Wood,  100  III.  454. 

"  Burnham  v.  Brennan,  42  N.  Y. 
Superior  Ct.  63. 

^  In  Read  v.  Worthington,  9  Bosw. 
(N.  Y.)  628,  Robertson,  J.,  said:  "To 
hinder  any  one  in  his  course  is,  neces- 
sarily, to  delay  him.  Not  being  able  to 
perceive  the  distinction,  I  must  hold 
that  none  exists.  Many  such  pleonasms 
are  to  be  found  in  old  English  statutes, 
where  they  are  introduced  for  caution's 
sake,  more  than  with  any  precise  idea  as 
to  what  they  were  intended  to  effect." 

••  Hickox  v.  Elliott,  22  Fed.  Rep.  21. 

'  Crow  v.  Beardsley,  68  Mo.  439 ; 
Rupe  v.  Alkire,  77  Mo.  641. 

''  Burgcrt  v.  Borchert,  59  Mo.  83. 


20  WORDS    "  HINDER,    DELAY,    OR    DEFRAUD."  §    I  I 

a  case  in  Pennsylvania,  where  a  debtor  departed  from  the 
State  leaving  no  property  subject  to  the  process  of  his 
creditor,  and  making  no  provision  for  the  payment  of  his 
debts.^  A  better  illustration  is  to  be  found  in  a  case  in  the 
New  York  Court  of  Appeals,  where  the  debtor  conveyed 
his  property  in  trust  for  his  own  benefit  during  his  life,  and 
after  his  death  for  the  payment  of  his  debts.^  The  authori- 
ties avoiding  assignments  by  the  terms  of  which  the  assignee 
is  empowered  to  sell  upon  credit  are,  perhaps,  more  in  point 
than  either  of  the  illustrations  given.  A  conveyance  of  real 
estate  by  a  debtor  upon  the  understanding  that  the  grantee 
should  hold  it  in  trust  for  the  grantor,  and  as  fast  as  money 
could  be  realized  therefrom,  should  apply  it  to  the  payment 
of  his  debts,  necessarily  operates  to  hinder  and  delay  credit- 
ors. A  debtor's  property  is  in  theory  of  law  subject  to  im- 
mediate process  issued  at  the  instance  of  his  creditors,  and 
the  debtor  will  not  be  permitted  to  hinder  or  delay  them 
by  any  device  which  leaves  it,  or  the  avails  of  it,  subject  to 
his  control  and  disposition  ;  and  it  makes  no  difference  that 
the  debtor  intends  to  apply  the  avails  of  it  to  the  payment 
of  his  debts.^  So  a  deed  of  trust  creating  a  lien  upon  per- 
sonalty for  an  indefinite  period,  the  natural  operation  of 
which  is  to  benefit  the  grantor,  is  fraudulent  as  to  creditors. '' 
The  statute  seems  to  be  aimed  at  three  things  which  it  is 
supposed  insolvents  would  possibly  be  tempted  to  do  for 
the  purpose  of  avoiding  or  deferring  the  payment  of  their 
debts.  First,  they  might  dispose  of  their  property  in  such 
manner  as  to  interpose  obstacles  to  legal  process,  with  in- 
tent to  hinder  creditors  in  the  collection  of  their  demands ; 
or,  second,  to  delay  payment  to  some  future  period  ;  or, 
third,  to  defraud  their  creditors  by  absolutely  defeating  all 


*  Heath  v.  Page,  63  Pa.  St.  108.  kins  v.  Aird,  6  Wall.  78  ;  Donovan  v. 

'^  Young  V.  Heermans,  66  N.  Y.  374.  Dunning,  69  Mo.  436  ;  Lore  v.  Dierkes. 

See  S.  P.  Graves  v.  Blondell,  70  Me.  19  J.  &  S.  (N.  Y.)  144. 

194;  Henry  v.  Hinman,  25  Minn.  199;  ^  Smith  v.  Conkwright,  28  Minn.  23. 

Macomber  v.  Peck,  39  Iowa  351  ;  Lu-  ^  State  v.  Mueller,  10  Mo.  App.  87. 


§    12  WORD    "disposed"    CONSTRUED.  2  1 

attempts  to  enforce  their  claims.  Any  one  of  these  pur- 
poses is  sufficient  to  avoid  the  transaction.^  If  the  design 
of  a  transfer  is  a  lawful  one  it  matters  not  that  a  creditor  is 
thereby  deprived  of  property  which  might  otherwise  have 
been  reached  and  applied  to  the  payment  of  his  debt. 
Hence  it  is  that  a  general  assignment,^  or  a  preference,^  is 
upheld,  though  each  is  often  made  or  given  to  thwart  some 
belligerent  creditor.^  The  secret  motives  that  prompt  the 
act  in  such  cases  are  unimportant,'"'  Speaking  of  devices  to 
aid  the  debtor,  Davis,  J.,  said,  in  Robinson  v.  Elliott:^ 
"  The  creditor  must  take  care  in  making  his  contract  that 
it  does  not  contain  provisions  of  no  advantage  to  him,  but 
which  benefit  the  debtor,  and  were  designed  to  do  so,  and 
are  injurious  to  other  creditors.  The  law  will  not  sanction 
a  proceeding  of  this  kind.  It  will  not  allow  the  creditor  to 
make  use  of  his  debt  for  any  other  purpose  than  his  own 
indemnity.  If  he  goes  beyond  this,  and  puts  into  the  con- 
tract stipulations  which  have  the  effect  to  shield  the  property 
of  his  debtor,  so  that  creditors  are  delayed  in  the  collection 
of  their  debts,  a  court  of  equity  will  not  lend  its  aid  to  en- 
force the  contract."  A  debtor  cannot  take  the  law  into  his 
own  hands  and  attempt  to  secure  the  delay  which  can  only 
be  obtained  by  the  consent  of  creditors.'' 

§  12.  Word  "disposed"  construed. — In  Bullenev.  Smith,^ 
it  appeared  that  section  398  of  the  Revised  Statutes   of 


1  Burdick  v.  Post,  12  Barb.  (N.  Y.)  Grover  v.  Wakeman,  11  Wend.  (N.  Y.) 
172,  affi'd  6  N.  Y.  522.     See  Pilling  v.  194. 

Otis,  13  Wis.  495;  Burgert  V.  Borchert,  =*  Hall  v.  Arnold,   15  Barb.   (N.  Y.) 

59  Mo.  80;  Crow  V.  Beardsley,  68  Mo.  599;    Hartshorn    v.    Eames,    31    Me. 

435 ;    Planters'   Bank  v.   The   Willea  98. 

Mills,  60  Ga.  168;  Sutton  v.  Hanford,  •'Hartshorn   v.   Eames,   31    Me.  98; 

1 1  Mich.  513  ;  Davenport  v.  Cummings,  Holbird  v.  Anderson,  5  T,  R,  235. 

15  Iowa  219;  Means  v.  Dowd,  128  U,  ^  Horwitz  v.  Ellinger,  31    Md.  504; 

S.    281.     See,  especially,    the   case   of  Pike  v.   Bacon,  21    Me.    280;    Covan- 

Nicholson  v,  Leavitt,  6  N.  Y.  510 ;  S.  C.  hovan  v.  Hart,  2i  Pa.  St.  500. 

loN.  Y.  591.  "  22  Wall.  523. 

2  Hoffman  V.  Mackall,  5  Ohio  St.  124;  "  Means  v.  Dowd,  128  U.  S.  281, 
Hefner  v.  Metcalf,  i  Head  (Tenn.)  577  ;  "  73  Mo,  151. 


2  2  NO    DEFINITION    OF    FRAUD.  §    1 3 

Missouri,  authorized  an  attachment  to  issue  in  the  follow- 
incr  amono;  other  cases  :  Where  the  defendant  had  fraud- 
ulently  conveyed  or  assigned  his  property  so  as  to  hinder  or 
delay  his  creditors ;  where  the  defendant  had  fraudulently 
concealed,  removed,  or  disposed  qI  his  property  or  effects,  so 
as  to  hinder  his  creditors.  .The  court  held  that  the  word  dis- 
posed, as  here  used,  covered  all  such  alienations  of  property 
as  might  be  made  in  ways  not  otherwise  pointed  out  in  the 
statute  :  for  example,  pledges,  gifts,  pawns,  bailments,  and 
other  transfers  and  alienations  which  might  be  effected  by 
mere  delivery  and  without  the  use  of  any  writing,  assign- 
ment, or  conveyance.  Other  species  of  conveyances  were 
excluded.  Hence  it  was  held  that  a  charge  to  a  jury  to  the 
effect  that  the  defendant  had  fraudulently  disposed  of  his 
property  was  not  supported  by  proof  that  he  had  executed 
a  fraudulent  mortgage. 
.  §  13.  No  definition  of  fraud. — Fraud  is  as  difficult  to  de- 

*^ -?  ^'  fine  ^  as  it  is  easy  to  perceive.  Courts  of  equity  have  skil- 
S  levy '^7^"^'  fully  avoided  giving  a  precise  and  satisfactory  definition  of 
^_  A  if'^  i|-  2  gQ  various  is  its  form  and  color.  It  is  sometimes  said 
^1  ^'/y  to  consist  of  "any  kind  of  artifice  employed  by  one  person 

"^]  to  deceive  another,"  conduct  that  operates  prejudicially  on 

the  rights  of  others,^  or  withdraws  the  property  of  a  debtor 
from  the  reach  of  creditors.'*  But  the  term  is  one  that  ad- 
mits of  no  positive  definition,  and  cannot  be  controlled  in 
its  application  by  fixed  and  rigid  rules.  Fraud  is  "so  sub- 
tle in  its  nature,  and  so  protean  in  its  disguises,  as  to  render 
it  almost  impossible  to  give  a  definition  which  fraud  would 
not  find  means  to  evade."  ^  It  is  to  be  inferred  or  not,  ac- 
cording to  the  special  circumstances  of  every  case.  When- 
ever it  occurs  it  usually  vitiates  the  transaction  tainted  by 


'  See  Green  v.  Nixon,  23  Beav.  530  ;  i    Atk.   352  ;   Shoemaker  v.  Cake,  83 

Reynell  v.   Sprye,  i  De  G.,  M.  &  G.  Va.  5. 

691.  2  Bunn  V.  Ahl,  29  Pa.  St.  390. 

*  See  Beach  on  Contributory  Neg.,  •»  McKibbin  v,  Martin,  64  Pa.  St.  356. 

§  2.     Compare  Chesterfield  v.  Janssen,  ^  Shoemaker  v.  Cake,  83  Va.  5. 


^  I. 


NO    DEFINITION    OF    FRAUD. 


it.^     "  Fraud  cuts  down  everything."     "  Fraud,"  said    De     < 
Grey,  C.  J.,  "is  an  extrinsic,  collateral  act,  which  vitiates     j 
the  most  solemn  proceedings  of  courts  of  justice.     Lord    | 
Coke  says  it  avoids  all  judicial  acts,  ecclesiastical  or  tem-    / 
poral."^     It  is  the  judgment  of  law  on  facts  and  intents.^ 
Its  existence  is  often  a  presumption  of  law  from  admitted 
or  established  facts,  irrespective  of  motive,  and  too  strong 
to  be  rebutted.^     "  Fraud,"  said  Story,  J.,  "  will  vitiate  any, 
even  the  most  solemn  transactions  ;  and  an  asserted  title  to 
property,  founded  upon  it,  is  utterly  void."  ^     "  Fraud  is 
always  a  question  of  fact  with  reference  to  the  intention  of 
the  grantor.     Where  there  is  no  fraud  there  is  no  infirmity 
in  the  deed.     Every  case  depends  upon  its  circumstances, 
and  is  to  be  carefully  scrutinized.      But  the  vital  question 
is  always  the  good  faith  of  the  transaction.     There  is  no 
other  test."*^     Fraud  does  not  consist  in  mere  intention,  but 
in  intention  carried  out  by  hurtful  acts.'''     "  Fraud   or  no 


'  Fenner  v.  Dickey,  i  Flippin  36. 

Undue  infiiieiice. — So  what  consti- 
tutes undue  influence  is  a  question  de- 
pending upon  the  circumstances  of 
each  particular  case.  It  is  a  species  of 
constructive  fraud  which  the  courts 
will  not  undertake  to  define  by  any 
fixed  principles,  lest  the  very  definition 
itself  furnish  a  finger-board  pointing 
out  the  path  by  which  it  may  be  evaded. 
The  following  principle,  we  think,  is 
sound,  both  in  law  and  morals,  and 
though  a  departure  from  the  former 
rule,  is  sustained  by  the  more  modern 
authorities.  When  one,  living  in  illicit 
sexual  relations  with  another,  makes  a 
large  gift  of  his  property  to  the  latter, 
especially  in  cases  where  the  donor  ex- 
cludes the  natural  objects  of  his  bounty, 
the  transaction  will  be  viewed  with 
such  suspicion  by  a  court  of  equity  as  to 
cast  on  the  donee  the  burden  of  prov- 
ing that  the  donation  was  the  result  of 
free  volition,  and  was  not  superinduced 
by  fraud  or  undue  influence.    See  Ship- 


man  V.  Furniss,  69  Ala.  555,  and  cases 
cited  ;  S.  C.  44  Am.  Rep.  528,  and  note  ; 
Leighton  v.  Orr,  44  Iowa  679  ;  Dean  v. 
Negley,  41  Pa.  St.  312. 

*  Rex  V.  Duchess  of  Kingston,  20 
How.  St.  Tr.  544;  2  Smith's  L.  C.687. 
See  Brownsword  v.  Edwards,  2  Ves. 
Sen.  246 ;  Meddowcroft  v.  Huguenin,  4 
Moo.  P.  C.  386 ;  Perry  v.  Meddow- 
croft, 10  Beav.  122  ;  Harrison  v.  Mayor, 
etc.  of  Southampton,  4  De  G.,  M.&  G. 
137  ;  Gillv.  Carter,  6  J.  J.  Marsh  (.Ky.) 
484;  Hall  V.  Hall,  i  Gill  (Md.)  391; 
Wilson  V.  Watts,  9  Md.  356. 

""  Pettibonc  v.  Stevens,  15  Conn.  26  ; 
Sturtevant  v.  Ballard,  9  Johns.  (N.  Y.) 
342 ;  Otley  v.  Manning,  9  East  64  ; 
Morgan  v.  Elam,  4  Verg.  (Tenn.)  438  ; 
Worseley  v.  Demattos,  i  Burr.  467. 

"  Belford  v.  Crane,  16  N.  J.  Eq.  265. 

^  United  States  v.  Amistad,  15  Peters 

594- 

°  Per  Swayne,  J..  Lloyd  v.  Fulton,  91 
U.  S.  485. 

"  Williams  v.  Davis,  69  Pa.  St.  28 


24  NO    DEFINITION    OF    FRAUD.  ^14 

fraud  is  generally  a  question  of  fact  to  be  determined  by  all 
the  circumstances  of  the  case."^  Direct  proof  of  positive 
fraud  in  the  various  kinds  of  covinous  alienations  which  we 
are  to  discuss,  is  not,  as  we  shall  presently  see,  generally 
attainable,  nor  is  it  vitally  essential.  The  fraudulent  con- 
spirators will  not  be  prompted  to  proclaim  their  unlawful 
intentions  from  the  housetops,  or  to  summon  disinterested 
parties  as  witnesses  to  their  nefarious  schemes.  The  trans- 
action, like  a  crime,  is  generally  consummated  under  cover 
of  darkness,  with  the  safeguards  of  secrecy  thrown  about  it 
Hence  it  must  be  scrutinized  and  judged  by  all  the  sur- 
rounding circumstances  of  the  case.  The  evidence  is  "al- 
most always  circumstantial.  Nevertheless,  though  circum- 
stantial, it  produces  conviction  in  the  mind  often  of  more 
force  than  direct  testimony."  ^  In  such  cases,  where  fraud 
is  in  issue,  "the  field  of  circumstances  ought  to  be  very 
wide."  ^  From  the  very  nature  of  the  case  it  can  rarely  ever 
be  proved  otherwise  than  by  circumstantial  evidence.  And 
if  the  facts  and  circumstances  surrounding  the  case,  and 
distinctly  proven,  are  such  as  would  lead  a  reasonable  man 
to  the  conclusion  that  fraud  in  fact  existed,  this  is  all  the 
proof  which  the  law  requires.'*  It  may  be  observed  that 
there  can  be  no  fraud  unless  there  exist  claims  and  rights 
which  can  be  delayed  and  hindered,  and  which,  but  for  the 
fraudulent  conveyance,  could  be  asserted.  The  law  takes  no 
cognizance  of  fraudulent  practices  that  injure  no  one.  Fraud 
without  injury  will  not  furnish  a  cause  of  action.  Unless  these 
elements  co-exist,  the  courts  are  powerless  to  render  any  relief.^ 
§  14.  Restraints  upon  alienation. — A  conveyance  as  regards 

1  Per  Hunt,  J.,  Humes  v.  Scruggs,  181;  Wamerv.  Blakeman,  4  Abb.  App. 

94  U.  S.  22-28.   See  McKibbin  v.  Mar-  Dec.  (N.  Y.)  535  ;  Tumlin  v.  Crawford, 

tin,  64  Pa.  St.  356  ;  Knowlton  v.  Mish,  61  Ga.  128  ;  Engraham  v.  Pate,  51  Ga. 

8  Sawyer  627.  537. 

-  See  Kempner  v.  Churchill,  8  Wall.  ^  Engraham  v.  Pate.  51  Ga.  537. 

369;    Newman   v.    Cordell,   43    Barb.  *  Lockhard   v.   Beckley,    10  W.  Va. 

(N.  Y.)  456  ;  Babcock  v.  Eckler,  24  N.  87  ;  White  v.  Perry,  14  W.  Va.  86. 

Y.  623  ;  Harnett  v.  Dundass,  4  Pa.  St.  ^  Fellows    v.    Lewis,   65   Ala.   354 ; 


§  H 


RESTRAINTS    UPON    ALIENATION. 


25 


real  property  may  be  defined  to  be  "  the  transfer  of  the  title 
of  land  from  one  person,  or  class  of  persons,  to  another,"  ^ 
or  as  "  a  deed  which  passes  and  conveys  land  from  one  man 
to  another."^  The  usual  incident  of  property  of  every  kind 
owned  or  possessed  by  persons  sui  juris  is  the  power  of 
alienation  ;  generally  speaking,  every  man  may  in  theory  of 
law  do  what  he  pleases  with  that  which  is  his  own."^  Almost 
the  sole  remaining  restraint  upon  the  power  of  alienation 
of  land  is  that  which  adjudges  void  conveyances  of  real 
property  held  adversely  by  a  third  party  at  the  date  of  the 
conveyance.  Statutes  adjudging  such  conveyances  void 
"were  originally  introduced  partly  upon  the  theory  that  it 
would  be  dangerous  to  permit  the  transfer  of  disputed  or 
'  fighting'  titles,  lest  powerful  and  influential  persons  might 
purchase  and  use  such  titles  as  a  means  of  oppressing  poor 
people."'*  But  these  statutes  are  being  rapidly  abolished, 
circumvented,  or  ignored  as  impracticable  and  unnecessary 
in  this  country,  and  even  this  restraint  upon  alienation  will 
soon  be  wholly  superseded.''     The  restriction  which  we  are 


Castle  V.  Palmer,  6  Allen  (Mass.)  401  ; 
Legro  V.  Lord,  10  Me.  161  ;  Foster 
V.  McGregor,  11  Vt.  595;  Danforth  v. 
Beattie,  43  Vt.  138  ;  Crummen  v.  Ben- 
net,  68  N.  C.  494 ;  Sears  v.  Hanks,  14 
Ohio  St.  298  ;  Vaughan  v.  Thompson, 
17  111.  78;  Mullerv.  Inderreiden,  79  111. 
382 ;  Anthony  v.  Wade,  i  Bush  (Ky.) 
no;  Morton  v.  Ragan,  5  Bush  (Ky.) 
334 ;  Lishy  v.  Perry,  6  Bush  (Ky.)  515; 
Kuevan  v.  Specker,  1 1  Bush  (Ky.)  i  ; 
Vogler  V.  Montgomery,  54  Mo.  577  ; 
.Smith  V.  Rumsey,  33  Mich.  183  ;  Hugu- 
nin  V.  Dewey,  20  Iowa  368 ;  Edmonson 
V.  Meacham,  50  Miss.  34  ;  Wood  v. 
Chambers,  20  Tex.  247  ;  McFarland  v. 
Goodman,  6  Biss.  11 1  ;  Cox  v.  Wilder, 
2  Dill.  45  ;  Smith  v.  Kehr,  2  Dill.  50  ; 
Dreutzer  v.  Bell,  11  Wis.  114;  Pike  v. 
Miles,  23  Wis.  164;  Murphy  v.  Crouch, 
24  Wis.  365  ;  Succession  of  Cotting- 
ham,  29  La.  Ann.  669.     Compare  Getz- 


ler  V.  Saroni,  18  111.  511;  Currier  v. 
Sutherland,  54  N.  H.  475  ;  Huey's  Ap- 
peal, 29  Pa.  St.  219.     See  §§46-48. 

'  Klein  v.  McNamara,  54  Miss.  105. 

'  Brown  v.  Fitz,  13  N.  H.  28 5. 
"  There  is  no  magical  meaning  in  the 
word  'conveyance';  it  denotes  an  in- 
strument which  carries  from  one  per- 
son to  another  an  interest  in  land." 
Lord  Cairns,  L.  C,  in  Credland  v.  Pot- 
ter, L.  R.  10  Ch.  App.  12. 

3  See  §  52. 

••  Sedgwick  &  Wait  on  Trial  of  Title 
to  Land  (2d  ed.),  §  190.  See  Sedgwick 
V.  Stanton,  14  N.  Y.  295 ;  Crary  v. 
Goodman,  22  N.  Y.  177  ;  McMahan  v. 
Bowe,  114  Mass.  145;  Humbert  v. 
Trinity  Church.  24  Wend.  (N.  Y.)  611  ; 
Matter  of  Department  of  Parks,  73  N. 
Y.  560;  Dawley  v.  Brown,  79  N.  Y. 
390;  Williams  v.  Rawlins,  33  Ga.  117. 

'■  Ibid. 


26  RESTRAINTS    UPON    ALIENATION.  §   1 4 

about  to  consider  upon  a  debtor's  power  of  alienation  of 
property  at  the  expense  of  his  creditor,  is  one  that  has  ex- 
isted from  time  immemorial,  and  which  will  not  outlive  its 
usefulness  so  long  as  people  are  dishonest  or  inclined  to  be 
generous  before  they  are  just.  The  claims  of  creditors,  it 
may  be  observed,  rest  upon  legal  obligations  higher  than 
the  demands  of  affection  or  generosity,  commendable  as  a 
response  to  these  may  be  when  no  duties  which  the  law  de- 
clares paramount  intervene.-^  Creditors,  as  we  have  said, 
have  an  equitable  interest  for  the  payment  of  their  claims 
in  their  debtor's  property,  or  in  "  the  means  he  has  of  satis- 
fying their  demands,"^  and  there  is  in  our  jurisprudence  a 
clear  restraint  upon  the  debtor's  right  of  alienation,  where 
it  is  attempted  to  be  exercised  for  the  purpose  of  hindering, 
delaying,  or  defrauding  his  creditors,  or  defeating  their  law- 
ful right  to  subject  his  property  by  legal  process  to  the 
satisfaction  of  their  lawful  demands.  The  cardinal  princi- 
ple running  through  all  such  cases  is,  that  the  property  of 
the  debtor  shall  not  be  diverted  from  the  payment  of  his 
debts,  to  the  injury  of  his  creditors  by  means  of  the  fraud.^ 
The  law  does  not  restrain  a  man's  dominion  over  his  own 
property  so  long  as  he  acts  with  fairness  and  good  faith  ; 
but  it  avoids  all  fraudulent  alienations  devised  to  secure 
property  from  the  pursuit  of  his  creditors  ;  it  is  fraudulent 
to  defeat  them  by  a  reservation  of  benefit  to  himself ;  it  is 
equally  fraudulent  to  defeat  them  by  benefactions  conferred 
upon  others.'* 

"  The  current  of  law,"  says  Professor  Gray,^  "  has  for  cen- 
turies been  in  favor  of  the  removal  of  old  restraints  on 
alienation  ;  in  favor  of  the  disallowance  of  new  ones  ;  and 


'  See  Potter  v.  Gracie,  58  Ala.  303 ;  ''  Lockhard  v.  Beckley,  10  W.  Va.  96  ; 

Wait  V.  Day,  4   Denio  (N.  Y.)   439 ;  Hunters  v.  Waite,  3  Gratt.  (Va.)  26. 

Sherman  v.  Barrett,  I  McMull.  (S.  C.)  ^  Restraints    on    the   Alienation    of 

Law  147.  Property,  by  John  Chipman  Gray,  Esq., 

-  Seymour  V.  Wilson,  19  N.  Y.  418.  Story  Professor   of  Law   in    Harvard 

•■*  Clements  v.  Moore,  6  Wall.  312;  University.     Boston:  Soule  &  Bugbee, 

Tompkins  v.  Sprout,  55  Cal.  36.  1883,  p.  2. 


§   15  RESTRAINTS    UPON    ALIENATION.  2/ 

especially  in  favor  of  compelling  a  debtor  to  apply  to  his 
debts  all  property  which  he  could  use  for  himself  or  give  at 
his  pleasure  to  others.  The  legislatures  and  the  courts  have 
co-operated  to  this  end.  Family  and  ecclesiastical  pride, 
natural  dishonesty,  and  narrow  precedents  have  been  for- 
midable obstacles  to  this  movement,  but  its  general  success 
has  been  unmistakable."  The  debtor  must  devote  all  his 
property  absolutely  to  the  payment  of  his  debts  ;  reserve  no 
control  for  himself ;  ^  provide  for  no  benefit  to  himself,' 
other  than  what  may  result  from  the  payment  of  his  debts  ; 
im})ose  no  condition  upon  the  right  of  the  creditors  to  par- 
ticipate in  the  fund  ;  authorize  no  delay  on  the  part  of  the 
trustee.-^  A  debtor  may  be  said  to  sustain  two  distinct  re- 
lations to  his  property  :  that  of  owner  and  quasi  trustee  for 
his  creditors.  As  owner  he  may  contract  debts  to  be  satis- 
fied out  of  his  property,  create  liens  upon  it,  and  sell  or 
give  it  to  others  at  pleasure,  and,  as  we  shall  presently  see, 
so  far  as  he  is  personally  concerned,  he  will  be  bound  by 
his  own  acts.  The  law,  however,  lays  upon  him  an  obliga- 
tion to  pay  his  debts,  and  in  behalf  of  his  creditors  holds 
him  to  the  exercise  of  good  faith  in  all  transactions  relating 
to  the  fund  upon  which  they  necessarily  depend  for  pay- 
ment. The  debtor,  therefore,  cannot  be  permitted  to  cre- 
ate fictitious  debts,  or  to  do  any  of  the  acts  specified  7nala 
fide  to  the  prejudice  of  his  creditors. 

§  15.  Fraudulent  conveyances — Characteristics  and  classes. 
— A  fraudulent  conveyance  may  be  defined  to  be  a  convey- 
ance the  object,  tendency,  or  effect  of  which  is  to  defraud 
another,  or  the  intent  of  which  is  to  avoid  some  duty  or 
debt  due  by  or  incumbent  upon  the  party  making  it.^     As 

'West  V.  Snodgrass,  17  Ala.   554;  v.   Com.  &   R.  Bank,    17   Miss.  394; 

Riggs  V.  Murray,  2  Johns.  Ch.  (N.  Y.)  Tovvle  v.  Hoit,  14  N.  H.  61. 

565  ;  Donovan  v.  Dunning,  69  Mo.  436  ;  ^  Oliver  Lee  «S:  Co.s  Bank  v.  Talcott. 

Fisher  v.  Henderson,  8  N.  B.  R.  175;  19  N.  Y.  148. 

Means  v.  Dovvd,  128  U.  S.  281.  ^  See  2  Kent's  Com.  440  ;  4  Id.  462. 

'See  Lukins  v.   Aird,  6   Wall.  79;  "  One  of  the  surest  tests  of  a  fraudulent 

Wooten  V.  Clark,  23  Miss.  75 ;  Arthur  conveyance  is  that  it  reserves  to  the 


4 


28  FRAUDULENT  CONVEYANCES.  §  1 5 

was  said  by  Lord  Mansfield  in  Cadogan  v.  Kennett:^ 
"  The  question  in  every  case  is,  whether  the  act  done  is  a 
bona  fide  transaction,  or  whether  it  is  a  trick  and  contriv- 
ance to  defeat  creditors."  The  same  test  has  been  referred 
to  as  decisive  by  Mr.  Justice  Story  ^  and  Chief-Justice 
Marshall."^  As  we  shall  presently  see,  to  constitute  such 
a  disposition  of  property,  three  elements  must  concur — 
first,  the  thing  disposed  of  must  be  of  value,  out  of  which 
the  creditor  could  have  realized  all  or  a  portion  of  his 
claim  ;  second,  it  must  be  transferred  or  disposed  of  by  the 
debtor ;  and  third,  this  must  be  done  with  intent  to  de- 
fraud.^ Stated  in  another  form  :  in  order  to  bring  a  case 
within  the  terms  of  the  statute,  there  must  exist  a  creditor 
to  be  defrauded,  a  debtor  intending  to  defraud,  and  a  con- 
veyance of  property  which  is  appropriable  by  law  to  the 
payment  of  the  debt  due.^  Usually,  to  avoid  the  transac- 
tion there  must  be  some  interest  in  the  property  left  in  the 
debtor ;  ^  some  reservation  inconsistent  with  a  true  sale  ; 
or  some  hiding  or  cloaking  of  the  surplus  so  as  to  cover  it 
up  for  the  benefit  of  the  debtor  or  his  family.'^  Whether  a 
conveyance  be  fraudulent  or  not,  as  against  creditors,  de- 
pends on  whether  it  was  made  on  good  consideration  and 


grantor  an  advantage  inconsistent  with  of  a  right  which  would  be  legally  ef- 

its    avowed    purpose,    or    an   unusual  fective  if  the  conveyance  or  device  had 

indulgence."     Thompson  v.   Furr,   57  not  been  resorted  to  ?  "     Wagner  v. 

Miss.  484.     See  Bentz  v.   Rockey,  69  Smith,  13  B.  J.  Lea  (Tenn.)  569. 

Pa.  St.  71  ;   Edwards   v.    Stinson,   59  ■*  Hoyt   v.    Godfrey,    88    N.  Y.   669. 

Ga.  443  ;  Mitchell  v.  Stetson,  64  Ga.  See  Florence  Sewing  Machine  Co.  v. 

442.     Such,  for  instance,  as  a  support.  Zeigler,  58  Ala.  224.     See  §  23. 

Graves  V.  Blondell,  70  Me.  194  ;  Henry  ^  O'Conner     v.     Ward,     60    Miss. 

V.  Hinman,  25  Minn.  199  ;  Young  v.  1036. 

Heermans,  66  N.  Y.  374.  "Means  v.   Dowd,   128   U.   S.   281; 

'  2  Cowp.  434.  Young  V.  Willis,  82  Va.  296  ;  McCor- 

°  2  Story's  Eq.  Jur.  §  353.  mick  v.  Atkinson,  78  Va.  8  ;  Wray  v. 

^  United  States  v.  Hooe,  3  Cranch  Davenport,  79  Va.  19. 

73.     "The  test  as  to  whether  a  con-  '  See  Hobbs  v.  Davis,  50  Ga.  214; 

veyance  is  fraudulent  or  void  as  to  a  Price  v.  Pitzer,  44  Md.  527  ;  Todd  v. 

creditor  is,  does  it  hinder  him  in  en-  Monell,  19  Hun  (N.  Y.)   362  ;  Young 

forcing  his  debt  ?    Does  it  deprive  him  v.  Willis,  82  Va.  296. 


§    15  CHARACTERISTICS    AND    CLASSES.  29 

bona  fide.  Il  is  not  enough  that  it  be  on  good  considera- 
tion or  bona  fide ;  it  must  be  both.  If  it  be  defective  in 
either  particular,  though  good  between  the  parties  and  their 
representatives,  it  is  voidable  as  to  creditors.^  It  has  been 
observed  that  to  avoid  a  fraudulent  transfer  three  thincrs 
are  necessary  :  Fraud  on  the  part  of  the  vendor  ;  fraud  on 
the  part  of  the  vendee ;  and  an  injury  to  the  party  com- 
plaining.^ This,  as  we  shall  see,  is  too  general  a  statement, 
for  in  certain  cases  of  voluntary  alienations  proof  of  actual 
participation  in  the  fraud  by  the  vendee  is  not  essential  to 
annul  the  transaction.  Again,  these  covinous  alienations 
with  respect  to  the  rights  of  the  creditors,  existing  and 
subsequent,  and  the  character  of  the  debtor's  interest,  are 
divisible  into  three  classes,  (i).  Where  a  debtor  conveys 
a  title  in  fraud  of  creditors.  (2).  Where  a  person  not  in- 
debted alienates  property  with  the  intention  to  defraud 
future  creditors.  (3).  Where  the  property  is  paid  for  by 
the  debtor,  but  the  conveyance  is  taken  in  the  name  of  a 
third  party.  Dillon,  J.,  observed :  "  Any  instrument  is 
fraudulent  which  is  a  mere  trick  or  sham  contrivance,  or 
which  originates  in  bad  motives  or  intentions,  that  is  made 
and  received  for  the  purpose  of  warding  off  other  credit- 
ors."^ In  another  case^  this  language  is  quoted  :  "  Whether 
the  contract  be  oral  or  in  writing  ;  whether  executed  by  the 
parties  with  all  the  solemnities  of  deeds  by  seal  and  acknowl- 
edgment ;  whether  in  form  of  the  judgment  of  a  court, 
stamped  with  judicial  sanction,  or  carried  out  by  the  device 
of  a  corporation  organized  with  all  the  forms  and  require- 
ments demanded  by  the  statute  in  that  regard,  if  it  be  con- 
taminated with  the  vice  of  fraud  the  law  declares  it  to  be  a 
nullity.  Deeds,  obligations,  contracts,  judgments,  and  even 
corporate  bodies  may  be  the  instruments  through  which 

'  Randall  v.  Vroom,  30   N.  J.  Eq.        -  Guidry  v.  Grivot.  2  Martin  N.  S. 
358 ;  I  Story's  Eq.  Jur.  §  353  ;  Sayre  v.     (La.)  13. 

Fredericks,  16  N.  J.  Eq.  205.  '  Hufjhes  v.  Cory,  20  Iowa  405. 

^  Booth  V.  Bunce,  33  N.  Y.  156. 


30     STATUTES  DECLARATORY  OF  THE  COMMON  LAW.   §  l6 

parties  may  obtain  the  most  unrighteous  advantages.  All 
such  devices  and  instruments  have  been  resorted  to  to  cover 
up  fraud,  but  whenever  the  law  is  invoked  all  such  instru- 
ments are  declared  nullities  ;  they  are  a  perfect  dead  letter  ; 
the  law  looks  upon  them  as  if  they  had  never  been  executed. 
They  can  never  be  justified  or  sanctified  by  any  new  shape 
or  cover,  by  forms  or  recitals,  by  covenants  or  sanctions 
which  the  ingenuity,  or  skill,  or  genius  of  the  rogue  may 
devise."  In  a  case  before  the  Supreme  Court  of  Maine  it 
is  said  that  "  a  fraudulent  transfer,  however  perfect  in 
form,  is  void  "  as  to  creditors.^ 

§  i6.  Fraudulent  conveyances  at  common  law — Statutes 
declaratory. — By  the  rules  of  the  common  law  all  convey- 
ances made  in  fraud  of  creditors  were  regarded  as  voidable 
at  the  instance  and  suit  of  such  creditors.^  The  famous 
statutes  of  Elizabeth,  to  be  presently  considered,  avoiding 
fraudulent  conveyances,  were  merely  declaratory  of  the 
common  law  ;^  the  same  result  would  have  been  worked 
out  without  the  aid  of  the  statutes.^  The  statutes  were 
not  necessary  to  this  result ;  ^  but  are  to  be  received 
when  such  transfers  are  brought  in  question  only  as  a  true 
and    accurate    declaration    of    the    common    law.^      Lord 


1  Skowhegan  Bank  v.  Cutler,  49  Me.  Davis  v.  Turner,  4  Gratt.  (Va.)  429. 

318.  See  §§  18-21. 

*  See  notes  to  Twyne's  Case  (3  Rep.  ^  Caclogan  v.  Kennett,  2  Cowp.  432. 

80),  I  Smith's  Leading  Cases  i,  con-  ^  Baker  v.  Humphrey,  loi  U.S.  499; 

tinued  from  1866  to  1879,  in  18  Amer-  Clements  v.  Moore,  6  Wall.  299. 

lean  Law  Register,  N.  S.  137  ;  Cado-  *^  Clark  v.  Douglass,  62  Pa.  St.  416  ; 

gan  V.  Kennett,  2  Cowper  432  ;  Curtis  Rickards  v.  Attorney  Genl.,  12  CI.  &  F. 

V.  Leavitt,  15  N.  Y.  124;  Clements  v.  44.     See  Barton  v.  Vanheythuysen,  11 

Moore,  6   Wall.    299,    312;    Nellis   v.  Hare  126-132;  Ryall  v.  Rolle,  i  Atk. 

Clark,  20  Wend.   (N.  Y.)  27  ;   Black-  178  ;  Utterson  v.  Vernon,  3  T.  R.  546. 

man  v.  Wheaton,  13  Minn.  326;  Stod-  In  Gardner  v.  Cole,  21  Iowa  209,  Dil- 

dard  v.  Butler,  20  Wend.  (N.  Y.)  516;  Ion.  J.,  after  remarking  that  the  stat- 

Clark  V.    Douglass,    62   Pa.   St.   416;  utes  13  Eliz.  and  27  Eliz.  had  never 

Brice  v.  Myers,  5  Ohio  121  ;  Baker  v.  been  legislatively  re-enacted  in  Iowa, 

Humphrey,  loi  U.  S.  499  ;  Hamilton  said  :  "  But  antedating  as  these  stat- 

v.  Russel,  I  Cranch  310.  utes  do  the  settlement  of  this  country, 

^Clements  v.  Moore,  6  Wall.  312;  and  being  mainly,  if  not  wholly,  de- 


§    l6       STATUTES  DECLARATORY  OF  THE  COMMON  LAW.  3 1 

Coke^  comments  on  the  word  "  declare"  in  the  statute  as 
showing  that  this  was  the  case,  and  Lord  Mansfield,  in  Cad- 
ogan  V.  Kennett,^  said  that  "the  principles  and  rules  of  the 
common  law,  as  now  universally  known  and  understood,  are 
so  strong  against  fraud  in  every  shape,  that  the  common  law 
would  have  attained  every  end  proposed  by  the  statutes  13 
Eliz.  c.  5  and  2  7  Eliz.  c.  4."  ^  And  Chancellor  Kent  asserted 
that  the  "  statute  of  Elizabeth  "  was  "  only  in  affirmance  of 
the  principles  of  the  common  law.""*  This  feature  of  our 
jurisprudence  is  of  the  highest  importance,  and  creditors 
are  justified  in  invoking  it  in  cases  where  it  is  sought  to 
defeat  their  claims  as  not  coming  exactly  within  the  precise 
wording  of  the  statute  avoiding  a  particular  kind  of  trans- 
fer. The  flexible  principles  of  the  common  law  supplement 
and  support  the  technical  framework  of  the  statute,  and 
constitute  the  deep  and  broad  foundation  upon  which  the 
creditor's  rio^hts  are  founded.  The  mere  omission  of  a 
provision  embracing  "goods,  chattels,  and  things  in  action," 
from  a  section  of  the  statute  declaring  void  conveyances 
and  assignments  of  estates  or  interests  in  land,  made  with 
intent  to  hinder,  delay,  or  defraud  creditors,  will  not  be 
construed  to  be  a  repeal  of  the  common-law  rule  which 
renders  a  conveyance  of  goods  and  chattels,  made  with 
such  intent,  fraudulent  and  void  as  to  creditors.^  In  Fox 
V.  Hills,*'  the  statute  concerning  fraudulent  conveyances 
was  construed  not  to  comprehend  claims  founded  on  tort. 


claratory  of  the  common  law,  which  *  Sands  v.  Codwise,  4  Johns.  (N.  Y.) 

sets  a  face  of  flint  against  frauds  in  596;  S.  C.  4  Am.  Dec.  313. 

every  shape,  they  constitute  the  basis  *  gjackman   v.  Whcaton,   13    Minn. 

of  American   jurisprudence   on   these  331.     "The  principle  of  the  court  of 

subjects,  and  are,  in  this  State,  part  of  equity  is  that  a  provision  for  the  wife, 

the  tinun-ittoi  iaw."  contrived  to  conceal  the  means  of  the 

'  Co.  Litt.  76a,  290b  ;  Twyne's  Case,  husband  from  his  creditors  by  placing 

3  Rep.  82b  (2  Coke,  219).  the  ostensible  title  in  her,  tiiough  not 

"^  2  Cowp.  434.  within  the  statute  of  frauds,  is  void  as 

2  See   Clements   v.   Moore,  6  V/all.  to  creditors,  by   the   unwritten   law." 

299;  Starin  v.  Kelly,  88  N.  Y.  421.  Bernheim  v.  Beer,  56  Miss.  151. 

'  I  Conn.  298. 


32  STATUTES  DECLARATORY  OF  THE  COMMON  LAW.       §    1 6 

but  it  appearing  that  a  voluntary  deed  had  been  given  to 
avoid  such  a  claim,  the  instrument  was  promptly  adjudged 
void  at  common  law  as  to  the  creditor.  In  Lillard  v. 
McGee,^  which  was  a  suit  to  set  aside  a  conveyance  at  the 
instance  of  a  creditor  whose  claim  was  a  judgment  for 
damages  in  an  action  of  slander,  the  court  said  :  "  Fraud  is 
one  of  the  main  pillars  of  the  jurisdiction  of  a  court  of 
equity,  and  there  is  no  question  of  its  competency,  prior  to 
the  statute,  to  give  relief  in  a  case  of  this  sort.  Now  as 
the  statute  is  made  in  affirmance,  not  in  derogation  of  the 
common  law,  it  cannot  have  the  effect  of  taking  from  a 
court  of  equity  its  jurisdiction  ;  for  it  is  a  settled  rule  that 
an  affirmative  statute  does  not  repeal  the  common  law." 

"  The  common  law  of  England,"^  says  Roberts,  "abhors 
every  species  of  covin  and  collusion  ;  but  being  tender  of 
presuming  fraud  from  circumstances,  statutes  have  been 
specially  framed  to  suit  the  exigencies  of  the  times,^  which 
are  as  fertile  in  the  artifices  of  concealment  as  in  the  oppor- 
tunities of  deceit.  It  was  the  prevention  and  not  the  pun- 
ishment of  fraud  in  which  the  common  law  was  defective, 
for  there  is  no  instrument  or  act  which  is  not  liable  by  the 
law  of  this  country  to  be  rendered  absolutely  void  by  clear 
and  explicit  evidence  of  fraudulent  intention.  So  general, 
indeed,  is  the  condemnation  of  all  fraudulent  acts  by  the 
law  of  England,  that  a  fraudulent  estate  is  said,  in  the  mas- 
culine language  of  the  books,  to  be  no  estate  in  the  judg- 
ment of  the  law." 

These  words  are  employed  in  Alabama  :  "  The  right  of 
the  creditor  to  subject  property  of  his  debtor,  fraudulently 
conveyed,  is  founded  in  that  principle  of  the  common  law 
which  enjoins  integrity  as  a  virtue  paramount  to  gener- 
osity.'"^   ' 

1  4  Bibb  (Ky.)  i66.  tonporibns  sunt  inhotiesta,  Cic.  de  Off. 

"  Roberts  on  Fraudulent  Conveyances  lib.  3. 

(ed.  1807),  p.  120.  ^  Planters'   &    Merchants'   Bank   v. 

"  QucB  natura  videntur  honesta  esse,  Walker,  7  Ala.  946. 


§    17  COVINOUS    TRANSFERS    OF    CHOSES    IN    ACTION.  7,7, 

§  17.  Covinous  transfers  of  choses  in  action.  —  By  the  law 
of  England,  before  the  American  revolution,  as  established 
by  decisions  of  Fortescue,  M.R.,  Lord  Hardwicke,  and 
Lord  Northington,  fraudulent  conveyances  of  choses  in 
action,  though  not  specified  in  the  statute,  were  voidable 
equally  with  transfers  of  tangible  assets,  but  from  the  nature 
of  the  subject-matter  the  remedy  of  the  creditors  must  be 
sought  in  equity.^ 

Gray,  C.  J.,  in  the  opinion  in  Drake  v.  Rice,^  says:  "Of 
the  only  case  before  our  Revolution  cited  in  the  learned 
argument  for  the  claimant,  we  have  but  this  brief  note  :  '  A 
man,  being  much  in  debt,  six  hours  before  his  decease  gives 
^600  for  the  benefit  of  his  younger  children  ;  this  is  not 
fraudulent  as  against  creditors  ;  though  it  would  have  been 
so  of  a  real  estate,  or  chattel  real.''^  The  report,  having 
been  published  in  1740,  cannot  have  been  unknown  to  the 
eminent  English  judges  who  made  the  decisions  already 
cited  ;  and,  as  observed  by  Lord  Redesdale,  the  book  is 
anonymous  and  of  not  much  authority.'*  The  opinions  of 
the  English  and  Irish  courts  of  chancery  since  our  Revolu- 
tion, cited  for  the  claimant,  cannot  outweigh  the  cases  above 
referred  to,  as  evidence  of  the  law  of  England  at  the  time 
of  the  separation  of  the  colonies  from  the  mother  country. 
In  the  case  at  bar,  it  is  agreed  that  the  law  of  New  York 
respecting  fraudulent  conveyances  is  the  same  as  the  com- 
mon law  and  the  law  of  Massachusetts ;  and  that  by  the 
law  of  New  York  choses  in  action,  although  they  cannot 
be  attached  or  levied  upon,  yet  may,  after  execution  issued 


'  Drake    v.    Rice,    130   Mass.   410;  v.  Tenney,  18  N.  H.   109;  Sargent  v. 

Taylor  v.  Jones,  2  Atk.  600 ;   King  v.  Salmond,  27  Me.  539.     See  §  33,  and 

Dupine,   2    Atk.  603,   note ;    Horn    v.  cases  cited. 

Horn,  Ambler,  79;  Ryall  v.  Rolle,   i  ■  130  Mass.  413. 

Atk.  165  ;  S.  C.  I  Yes.  Sen.  348  ;   Par-  '  Duffin    v.   Furness,   Sei.  Cas.  Ch. 

tridge  v.   Gopp,   i    Eden    163;    S.   C.  216. 

Ambl.    596  ;    Bayard    v.    Hoffman,   4  *  Barstow  v.  Kilvington.  5  Ves.  593. 

Johns.   Ch.   (N.  Y.)   450  ;    Hadden   v.  598 ;  Hovenden  v.  ATmesicy.  2  5ch.  tt 

Spader,  20  Johns.  (N.  Y.)  554;  Abbott  Lef.  607,  634. 
3 


34  EARLY    STATUTES.  §    1 8 

on  a  judgment  at  law,  be  reached  by  proceedings  before  a 
magistrate  in  the  nature  of  proceedings  under  the  poor 
debtor  acts  of  this  commonwealth,  and  by  the  appointment 
of  a  receiver  to  take  and  dispose  of  the  debtor's  property."  * 

§  i8.  Early  statutes  avoiding  fraudulent  conveyances. — 
The  widely  known  statute,  13  Eliz.  c.  5  (1570),  perpetu- 
ated by  29  Eliz.  c.  5  (1587),  was  not  by  any  means,  as 
many  suppose,  the  first  legislative  attempt  to  formulate  and 
declare  the  principles  of  the  common  law  on  this  subject, 
or  to  repress  covinous  transfers  by  statutory  enactment. 
By  3  Hen.  VIL  c.  4  (1487),  "all  deeds  of  gift  of  goods 
and  chattels  made  or  to  be  made  of  trust  to  the  use  of  the 
person  or  persons  that  made  the  same  deed  of  gift,"  are  de- 
clared "  void  and  of  none  effect."  And  the  prior  act  of  50 
Edw.  III.  c.  6  (1376),  reads  as  follows:  "Divers  people 
....  do  give  their  tenements  and  chattels  to  their  friends, 
by  collusion  to  have  the  profits  at  their  will,  and  after  do 
flee  to  the  franchise  of  Westminster,  of  St.  Martin-le-Grand 
of  London,  or  other  such  privileged  places,  and  there  do 
live  a  great  time  with  an  high  countenance  of  another  man's 
goods  and  profits  of  the  said  tenements  and  chattels,  till 
the  said  creditors  shall  be  bound  to  take  a  small  parcel  of 
their  debt,  and  release  the  remnant,  it  is  ordained  and  as- 
sented, that  if  it  be  found  that  such  gifts  be  so  made  by 
collusion,  that  the  said  creditors  shall  have  execution  of  the 
said  tenements  and  chattels  as  if  no  such  gift  had  been 
made."  The  statute,  2  Rich.  II.,  stat.  2,  c.  3  (1379),  con- 
tained provisions  on  the  same  subject,  and  from  its  recitals 
was  evidently  framed  to  repress  the  hypocritical  religious 
zeal  of  fraudulent  debtors,''^  and  to  furnish  a  method  of  sub- 


'  See  Donovan  v.  Finn,  i   Hopkins'  ments  of  their  goods  and  lands  to  their 

Ch.  (N.  Y.)  59;  S.  C.  14  Am.  Dec.  531,  friends  and  others,  and  after  withdraw 

especially  the  learned  note  at  page  542.  themselves,   and    flee    into   places    of 

See  §  33.  holy  church  privileged,  and  there  hold 

^  "  Item,  in  case  of  debt,  where  the  them  a  long  time,  and  take  the  profit 

debtors  make  feigned  gifts  and  feoff-  of  their  said  lands  and  goods  so  given 


§    1 8  EARLY    STATUTES. 


3:) 


stituted  service  of  process.^  The  quaint  provisions  of  these 
early  statutes  show  conclusively  that  fraudulent  conveyances 
are  not  entirely  the  offspring  of  our  modern  civilization. 
Fraud,  which  the  common  law  so  greatly  abhorred,  was  so 
much  practiced  by  debtors  upon  creditors  in  early  times  as 
to  attract  the  attention  of  Parliament,  and  to  constitute  a 
subject  of  frequent  legislation.  "  These  statutes,"  said  Lord 
Mansfield,  "  cannot  receive  too  liberal  a  construction,  or  be 
too  much  extended  in  suppression  of  fraud." '^  It  mav  be 
observed  in  explanation  of  this  early  legislation  against 
fraudulent  transfers  that  these  statutes  were  enacted  to 
more  clearly  formulate  the  common  law  with  a  view  to 
suppress  voluntary  conveyances  and  secret  trusts  made  by 
debtors  who  had  escaped  arrest  for  debt,  or  avoided  service 
of  process  by  fleeing  to  sanctuaries  or  holy  ground.  The 
number  of  these  conveyances,  however,  was  comparatively 
small,  and  their  appearance  is  said  to  have  been  spasmodic 
and  premature,  and  "  far  in  advance  of  the  time  for  their 
normal  natural  development."  Sanctuaries,  or  cities  of 
refuge  for  fraudulent  and  absconded  debtors,  do  not  seem 


by  fraud  and  collusion,  whereby  their  come  not  ....  judgment  shall  be  given 

creditors  have  been  long  and  yet  be  against   them  upon    the  principal    for 

delayed   of  their  debts  and   recovery,  their  default Execution  shall  be 

wrongfully  and  against  good  faith  and  made  of  their  goods  and  lands,  being 

reason  ;  it  is  ordained  and  established,  out  of  the  place  privileged,  as  well,  that 

That  after  that  the  said  creditors  have  is  to  say,  of  those  lands  and  goods  so 

thereof  brought  their  writs  of  debt,  and  given  by  collusion,  as  of  any  other  out 

thereupon  a  capias  awarded,  and  the  of  the  same  franchise,  after  that  such 

sheriff  shall  make  his  return  that  he  collusion  or  fraud  be  duly  found  in  the 

hath  not  taken  the  said  persons  because  same  manner  as  that  ought  to  have 

of  such  places  privileged  in  which  they  been.ifno  devise  had  been  thereof  made, 

be   or   shall   be   entered,    then   ....  notwithstanding  the  same  devise." 
another  writ   shall   be  granted  ....         '  By  a  Manx  statute  "all  fraudulent 

that  proclamation  be  made  openly  at  assignments,  or  transfers  of  the  debt- 

the   gate   of  the   place   so   privileged,  or's  goods  or  effects,  shall  be  void,  and 

where  such  persons  be  entered,  by  five  of  no  effect  against  his  just  creditors." 

weeks   continually,  every   week  once,  Mills'  Statute  Law  of  Isle  of  Manx,  p. 

that  the  same  person  be  at  a  certain  238.     Corlett  v.  Radcliffe,  14  Moore's 

day before  the  King's  justices,  C.  P.  1 21-132. 

and  ....  if  the  said  persons  called        "■  Cadogan  v.  Kennett,  Cowp.  434, 


36  STATUTE    13    ELIZABETH.  §   1 9 

to  have  been  wholly  abolished  until  during  the  reign  of 
James  I.,  and  one  such  sanctuary,  the  noted  White-friars, 
which  flourished  in  the  reign  of  that  monarch,  has  been 
immortalized  by  Sir  Walter  Scott  in  his  "  Fortunes  of 
Nigel."  ^ 

§  19.  Statute   13  Eliz.  c.  5,  and  its  object. — This   statute 
was  passed  for  the  protection  of  creditors,  and  is  the  great 
model  which  has  been  re-enacted  in  substance,  or  copied 
wherever  Anglican  law  prevails.     The  leading   object  of 
the  statute  was  to  prevent  those  collusive  transfers  of  the 
legal    ownership   which    place  the  property  of  a  man  in- 
debted out  of  the  reach  of  his  bona  fide  creditors,  and  leave 
to  him  the  beneficial  enjoyment  of  that  which  ought  in 
conscience    to   be  open    to  their  legal  remedies.^     By  its 
provisions   all   conveyances   and  dispositions  of  property, 
real  or  personal,  made  with  the  intention    of   defrauding 
creditors,  are  declared  to  be  null  and  void  as  against  the 
creditors.^     Mr.   Reeves   says  that  several  acts  had    been 
formerly  passed  on  the  subject  of  fraudulent  conveyances, 
"but  none  of  them  had  gone  so  far"  as  the  statutes   13 
Eliz.  and  27  Eliz.  "to  restrain  these  feigned  gifts."**     Mr. 
Justice  Story  observes  that  this  statute  (13    Eliz.)  "has 
been  universally  adopted  in  America  as  the  basis  of  our 
jurisprudence"  upon  the  subject.^     It  may  be  found  en- 
acted almost  intact  in  many  of  our  statute-books,  and  is 
still   popularly  called  "the  statute  of  Elizabeth,"  just  as 
statutory  remedies  for  the  trial  of  title  to  real  property  are 
known  by  the  familiar  title  of  ejectment.    Professor  Pome- 
rpysays:^  "The  operative  statute  in   England,  which   is 
also  the  basis  of  all  legislation  and  judicial  decision  in  the 


'  Essay  by  John  Reynolds,  Esq.,  on  ^  See  Drake  v.  Rice,  130  Mass.  410. 

Fraudulent  Conveyances,  etc.,  read  be-  ^  5  Reeves'  Hist.  Eng.  Law,  pp.  244, 

fore  New  York  State  Bar  Association,  245. 

Nov.  i8,  1879.  ^  Story's  Eq.  Jur.  §  353. 

^Roberts    on    Fraudulent    Convey-  2  Pom.  Eq.  §  968. 
ances,  p.  554. 


§   20  STATUTE    1 3    ELIZABETH.  2)7 

United  States,  is  the  celebrated  act  13  Eliz.  c.  5."  The 
general  interpretation  placed  upon  the  statute  of  Elizabeth 
is  well  illustrated  in  a  recent  case  in  Maine,^  in  which  the 
court  say  :  "  We  derived  our  law  in  relation  to  conveyances 
fraudulent  as  to  creditors,  from  the  stat.  13  Eliz.  c.  5,  which 
has  been  adopted  here  as  common  law.^  This  statute,  de- 
claring that  conveyances  made  with  intent  to  '  delay,  hinder, 
or  defraud  creditors,'  shall  be  '  deemed  and  taken  (only  as 
against  creditors,  etc.)  to  be  clearly  and  utterly  void,  frus- 
trate, and  of  none  effect,'  has  been  invariably  construed  as 
plainly  implying  that  they  are  valid  as  between  the  parties 
and  their  representatives ;  ^  and  can  be  avoided  only  by 
creditors  on  due  proceedings;^  or  their  representatives, 
such  as  assignees  in  bankruptcy  or  insolvency  of  the  grantor,^ 
and  the  executors  or  administrators  of  grantors  since  de- 
ceased whose  estates  have  been  declared  insolvent.^  And 
notwithstanding  the  words  '  utterly  void,'  etc.,  applied  to 
such  conveyances,  they  are  not,  even  as  to  creditors,  void 
but  voidable;^  and  all  the  courts  concur  in  holding  that  if 
the  fraudulent  grantee  convey  the  premises  to  a  bo7ia  fide 
purchaser  for  a  valuable  consideration  before  the  creditor 
moves  to  impeach  the  original  conveyance,  the  purchaser's 
title  cannot  be  disturbed."  ^ 

§  20.  Its  interpretation  and  construction. — "  Notwithstand- 
ing," says  Mr.  Roberts,  "these  laws  are  greatly  penal,  the 
rule  still  holds  of  giving  them  an  extended  and  liberal  ex- 
position." ^     Statutes  in   suppression  of  deceit  and  covin 

'  Butler  V.  Moore,  73  Maine  154.  «  McLean   v.   Weeks,  65    Mc.    411. 

•^  Howe  V.  Ward,  4  Me.  196,  199.  418. 

'  Nichols    V.    Patten,    18   Me.   231  ;  '  Andrews  v.  Marshall,  43  Me.  272. 

Andrews   v.    Marshall,    43    Me.    274;  "  Neal    v.    Williams.    18    Me.    391  ; 

Benjamin  on  Sales,  3d  Am.  ed.,  p.  476,  HofTman  v.  Noble,  6  Met.  (Mass.)  68  ; 

and  note.  Bradley  v.  Obear,  10  N.  H.  477. 

■*  Miller  v.  Miller,  23  Me.  22  ,  Thomp-  "  Roberts    on    Fraudulent    Convey- 

son  V.    Moore,   36   Me.  47  ;    Stone   v.  ances,  p.  542.     In  hits  e-nim  quae  sunt 

Locke,  46  Me.  445.  favor abilia     anima,    quamvis     sunt 

*  Freeland   v.    Freeland,    102  Mass.  damnosa  rebus,  fiat  aliquando  extensio 

47 5»  477-  statuti. 


38  STATUTE     13    ELIZABETH.  §   20 

should  be  equitably  expounded,  although  they  are  highly 
penal.*  In  McCulloch  v.  Hutchinson,^  Sergeant,  J.,  said  : 
"  The  statutes  on  this  subject  are  liberally  expounded  for 
the  protection  of  creditors,  and  to  meet  the  schemes  and 
devices  by  which  a  fair  exterior  may  be  given  to  that  which 
is  in  reality  collusive."^  "The  statute,"  says  Allen,  J., 
"  has  always  had  a  liberal  interpretation,  for  the  prevention 
of  frauds."  ^  The  law  "  loves  honesty  and  fair  dealing,"  and 
"so  construes  liberally  statutes  to  suppress  frauds,^  as  far 
as  they  annul  the  fraudulent  transaction."^  As  early  as 
Twyne's  Case,'  it  was  resolved  that  "  because  fraud  and  de- 
ceit abound  in  these  days  more  than  in  former  times,  .... 
all  statutes  made  against  fraud  should  be  liberally  and  bene- 
ficially expounded  to  suppress  the  fraud."  It  may  be  sug- 
gested that  in  construing  statutes  to  prevent  frauds,  sup- 
press public  wrongs,  or  effect  a  public  good, — objects  which 
the  law  favors, — there  is  a  pressure  toward  a  liberal  inter- 
pretation ;  but  if  they  also  provide  a  penalty,  which  is  a 
thing  odious  to  the  law,  there  is  another  pressure  toward 
the  strict  rule  ;  so  the  balance  may  be  in  equipoise,  or  the 
one  scale  or  the  other  may  preponderate,  according  to  the 
special  circumstances  of  the  case,  or  the  views  of  the  par- 
ticular judge.^ 

'  Wimbish  v.  Tailbois,  Plowd.  Com.  be   construed   strictly]  ;   most  statutes 

59.     See  Roy  v.  Bishop  of  Norwich,  against   frauds   being  in   their  conse- 

Hob.  75  ;  Brice  v.  Myers,  5  Ohio  123.  quences  penal.     But  this  difference  is 

-  7  Watts  (Pa.)  435.  here  to  be  taken  :    where  the  statute 

^  See  Cadogan  v.  Kennett,  2  Cowp.  acts  upon  the  offender  and  inflicts  a 

432  ;  Gooch's  Case,  5  Rep.  60  (3  Coke,  penalty,  as  a  pillory  or  a  fine,  it  is  then 

121);  Allen  V.  Rundle,  50  Conn.  31.  to   be   taken   strictly;     dt(^  wheti  the 

*  Young  V.  Heermans,  66  N.  Y.  383.  statute  acts  upon  the  offense,  by  setting 
See  Pennington  v.  Seal,  49  Miss.  525.  aside  the  fraudulent  transaction,  here  it 

^  Citing  Twyne's  Case,  3  Rep.  Sob  ,is  to  be  construed  liberally."      i     Bl. 

(2  Coke,  212)  ;  Cadogan  v.  Kennett,  Com.  88.     See   Carey  v.  Giles,  9  Ga. 

2  Cowp.  432-434.  253  ;  Gumming  v.  Fryer,  Dudley  (Ga.) 

•  Bishop  on  the  Written  Laws,  §  192.  182  ;  Ellis  v.  Whitlock,  10  Mo.  781. 
"Statutes    against    frauds    are   to   be  "  3  Rep.  82a  (2  Coke,  219). 
liberally    and    beneficially   expounded.  ^  Compare  Taylor  v.  United  States, 
This  may  seem  a  contradiction  to  the  3  How.  197  ;  Fairbanks  v.  Antrim,  2 
last  rule    [that  penal  statutes  are  to  N.  H.  105  ;  Abbott  v.  Wood,  22  Me. 


§§21,22       STATUTE    27    ELIZABETH. TWYNE's    CASE.  39 

The  provisions  of  the  statute  arc  considered  to  be  so 
plain  that  "he  that  runs  may  read."^ 

§  21.  Statute  27  Eliz.  c.  4. — This  statute  was  enacted  in 
favor  of  purchasers,  and  renders  void  as  against  subsequent 
purchasers  of  the  same  land  all  conveyances,  etc.,  made  with 
the  intention  of  defeating  them,  or  containing  a  power  of 
revocation.  Mr.  May  observes'^  that  "in  one  respect,  how- 
ever, both  these  statutes  were  moulded  in  strict  conformity 
with  the  rules  of  the  common  law ;  for  if  '  simplicity  was 
the  striking  feature  of  the  common  law,'^  it  was  in  an 
almost  equal  degree  the  chief  feature  of  the  statutes  of 
Elizabeth,  which  are  couched  in  very  general  terms,  so  as 
to  include,  and  allow  their  application  by  the  courts  to  any 
fraudulent  contrivances  to  which  the  fertility  of  man's 
imagination  might  have  resorted,  as  a  means  of  eluding  a 
more  precise  and  inflexible  law."* 

§  22.  Twyne's  Case.^ — This  celebrated  case  is  the  credit- 
or's beacon-light  in  suits  to  annul  covinous  transfers.  The 
decision  was  promulgated  in  1601,  thirty  years  after  the  en- 
actment of  the  statute  13  Eliz.  c.  5.     Evidently  covinous 


541;   Sickles  V.  Sharp,   13  Johns.  (N.  bargain,  and  conveyance  of  lands,  tene- 

Y.)  497 ;  Van  Valkenburgh  v.  Torrey,  ments,  goods,  and  chattels,  or  any  of 

7  Cow.  (N.  Y.)  252.     In  construction  them,  devised  and  contrived  to  delay, 

the  courts  will  strive  "to  make  atone-  hinder,  or  defraud  creditors,  as  against 

ment  and  peace  among  the  words."  such    creditors,   any    pretence,    color, 

'  See  Savage  v.  Knight,  92  N.  C.  497.  feigned    consideration,    expressing    of 

^  May  on    Fraudulent   Conveyances  use,  or  any  other  matter  or  thing  to  the 

(London,  1871),  p.  3.  contrary.     By  the  27  Eliz.c  4,  convey- 

^  Citing  Sugden  on  Powers,  Intro-  ances  made  to  defraud  subsequent  pur- 

duction,  p.  I.  chasers  are  declared  void  as  to  persons 

*  As  to  the  interpretation  of  these  defrauded.     In  both  statutes  a  penalty 

statutes  as  applied  to  /?0Ha  fide  pur-  is  provided  for,  which  parlies  to  such 

chasers,  see  Bean  v.  Smith,  2  Mason  conveyances,  or  such  as  are  privy  to  or 

272,  per  Story,  J.,  reviewing  Roberts  knowing  of  such  fraud,  incur,  who  shall 

V.  Anderson,  3  Johns.  Ch.  (N.  Y.)  371,  put  in  use  or  maintain,  justify,  or  de- 

per  Chancellor  Kent.     In  Mulford  v.  fend,  such  conveyances  as  made  bona 

Peterson,  35  N.  J.  Law  133,  the  court  fide  or  upon  good  consideration." 
said  :  "The  statute,  13  Eliz.  c.  5,  makes         '  3  Rep.  80  (2  Coke,  212) ;  i  Smith's 

utterly  void,  frustrate,  and  of  no  effect.  Lea.  Cas.  1  ;   18  Am.  Law  Reg.  N.  S. 

every  feoffment,  gift,  grant,  alienation,  137. 


40  TWVNe's    case.  §   22 

dispositions  of  property  were  at  that  time  beginning  to  at- 
tract attention  and  become  troublesome,  for,  as  already 
shown,  it  was  resolved  that  "  because  fraud  and  deceit 
abound  in  these  days  more  than  in  former  times,  all  statutes 
made  against  fraud  should  be  liberally  and  beneficially  ex- 
pounded to  suppress  the  fraud,"  It  appeared,  in  this  case, 
that  P.  was  indebted  to  T.  in  ^400,  and  was  indebted  also 
to  C.  in  ^200.  C.  brought  an  action  of  debt  against  P., 
and  pending  the  writ  P.,  being  possessed  of  goods  and  chat- 
tels of  the  value  of  ^300,  secretly  made  a  general  deed  of 
gift  of  all  his  goods  and  chattels,  real  and  personal  whatso- 
ever, to  T.,  in  satisfaction  of  his  debt ;  notwithstanding 
which  P.  continued  in  possession  of  the  goods,  some  of 
which  he  sold  again,  sheared  the  sheep,  and  marked  them 
with  his  own  mark.  Afterwards  C.  had  judgment  against 
P.  and  took  out  a  fieri  facias  directed  to  the  sheriff  of 
Southampton,  who,  by  force  of  the  writ,  came  to  levy  upon 
the  goods.  Divers  persons,  by  the  command  of  T.,  resisted 
the  sheriff  by  force,  claiming  the  goods  as  the  goods  of  T. 
by  virtue  of  the  gift ;  and  whether  the  gift,  on  the  whole 
matter,  was  a  good  gift,  or  fraudulent  and  void  within  the 
13  Eliz.  c.  5,  was  the  question.  It  was  determined  by  the 
Lord  Keeper  of  the  Great  Seal,  by  the  Chief-Justices,  and 
by  the  whole  Court  of  Star  Chamber  that  the  gift  was 
fraudulent  within  the  statute.  And  as  the  signs  and  marks 
of  fraud,  it  was  said  by  the  court :  (i).  That  the  gift  was 
general,  without  exception  of  the  donor's  apparel,  or  of  any- 
thing of  necessity.  (2).  The  donor  continued  in  possession, 
and  used  the  goods  as  his  own  ;  and  by  means  thereof 
traded  with  others,  and  defrauded  and  deceived  them.  (3). 
It  was  made  in  secret.  (4).  It  was  made  pending  the  writ. 
(5).  There  was  a  trust  between  the  parties ;  for  the  donor 
possessed  all,  and  used  them  as  his  proper  goods  ;  and  fraud 
is  always  apparelled  and  clad  with  a  trust,  and  a  trust  is  the 
cover  of  fraud.     (6).  The  deed  expressed  that  the  gift  was 


§22  twyne's  case.  4 1 

made  honestly,  truly  and  bona  fide  ;  et  claiistilcs  iticoiisiieta 
semper  inducunt  suspicionem}  This  case  is  popularly  re- 
garded as  the  fountain  from  which  our  modern  law  as  to 
fraudulent  conveyances  flows,  and  the  profession  frequently 
refer  to  and  draw  from  it  in  preference  to  selecting  from 
the  "myriad  of  precedents"  and  "single  instances"  which 
financial  crises  and  the  greed  of  dishonest  debtors  have  since 
called  into  beino^.  The  leadino:  doctrine  taua^ht  bv  this  case 
has  been  practically  superseded  in  England,  but  it  still  holds  a 
prominent  place  in  our  jurisprudence.  This  may  be  likened 
to  the  use  of  statutory  real  writs  in  parts  of  the  United  States 
after  their  complete  abandonment  in  the  mother  country.^ 
The  exact  point  decided  in  Twyne's  Case  is  that  a  convey- 
ance by  a  debtor  of  tangible  property,  if  actually  fraudulent, 
is  void  as  to  existing  creditors.  The  impression  that  the 
principles  of  this  case  are  sufficient  to  meet  the  exigencies 
of  our  modern  jurisprudence  is  clearly  erroneous.  Though 
Twyne's  Case  has  been  characterized  as  a  "  wonderful  de- 
cision," and  amazement  has  been  expressed  that  the  ques- 
tion involved  should  have  come  up  for  adjudication  at  such 
an  early  period,  yet  it  must  be  conceded  that  the  facts  of 
the  case  were  too  restricted  to  enable  the  court  to  furnish 
rules  sufficient  to  answer  all  the  varying  imperative  de- 
mands of  creditors  at  the  present  day.     Since  this  great 


'  See  Roberts  on  Fraudulent  Con-  gift  is  general ;  (2)  the  donor  continued 
veyances  (ed.  1845),  pp.  544,  545.  Lord  in  possession  and  used  them  as  his 
Eidon,  in  Kidd  v.  Rawlinson,  2  Bos.  &  own ;  (3)  it  was  made  pending  the 
P.  59,  cited  with  approval  from  Bui-  writ,  and  it  is  not  within  the  proviso, 
ler's  Nisi  Prius,  where  the  following  for  though  it  is  made  on  a  good  con- 
synopsis  of  Twyne's  Case  may  be  sideration,  yet  it  is  not  bona  fide.  But 
found:  "A.,  being  indebted  to  B.  in  yet  the  donor  continuing  in  possession. 
;£400,  and  to  C.  in  ;^20o,  C.  brings  is  not  in  all  cases  a  mark  of  fraud ;  as 
debt,  and  hanging  the  w-rit,  A.  makes  where  a  donee  lends  his  donor  money 
a  secret  conveyance  of  all  his  goods  to  buy  goods,  and  at  the  same  time 
and  chattels  to  B.  in  satisfaction  of  his  takes  a  bill  of  sale  of  them  for  securing 
debt,  but  continues  in  possession,  and  the  money."  Bull.  Nisi  Prius,  p. 
sells  some,  and  sets  his  mark  on  other  258. 

sheep ;  and  it  was  holden  to  be  fraudu-         ^  Sec  Sedg.  &  Wait  on  Trial  of  Title 

lent  within  this  act :  (i)  because  the  to  Land,  2d  ed.,  §§  72-76,  c.  IL 


42 


TWYNE  S    CASE. 


§   22 


decision  was  rendered  its  principles  have  been  extended,  as 
we  shall  presently  see,  to  avoid  covinous  conveyances  not 
only  as  to  existing  creditors,  but  in  certain  cases  as  to  sub- 
sequent creditors/  and  even  as  to  contingent  subsequent 
creditors;^  so  it  has  been  held  to  embrace  creditors  who 
were  suing  the  debtor  for  tort,^  as  for  slander,^  or  assault 
and  battery,^  or  the  misapplication  of  trust  moneys  more 
than  fifteen  years  before  the  conveyance.^  The  statutes 
"  are  not  limited  in  their  operation  by  any  Procrustean 
formula." '^  So  the  doctrine  of  the  case  has  been  enlarged 
to  cover  transfers  of  intangible  rights  and  choses  in  action, 
such  as  stocks,^  transfer  of  an  annuity,^  of  a  policy  of  life 
insurance,^"  of  an  equity  of  redemption, ^-^  of  certificates  of 
stock,'^  of  a  legacy,^'^  insurance  premiums,-^*  and  all  mere 
choses  in  action. ^^  Even  an  allowance  for  support  to  a  wife 
under  a  judgment  for  divorce  may  be  reached  by  her  cred- 
itors.^^   Still  Twyne's  Case  has  taken  deep  hold  in  our  law. 


1  See  Laughton  v.  Harden,-  68  Me. 
212  ;  Day  v.  Cooley,  Ii8  Mass.  527. 

"^  See  Jackson  v.  Seward,  5  Cow.  (N. 
Y.)  71  ;  Pennington  v.  Seal,  49  Miss. 
525;  Hoffman  v.  Junk,  51  Wis.  614. 
See  Chap.  VI. 

^  See  Post  V.  Stiger,  29  N.  J.  Eq. 
558;  Weir  V.  Day,  57  Iowa  87  ;  Lang- 
ford  V.  Fly,  7  Hum.  (Tenn.)  585  ; 
Walradt  v.  Brown,  6  111.  397  ;  Gebhart 
V.  Merfeld,  51  Md.  325  ;  Cooke  v. 
Cooke,  43  Md.  522 ;  Fox  v.  Hills,  i 
Conn.  295. 

*  Jackson  v.  Myers,  18  Johns.  (N.  Y.) 
425 ;  Cooke  v.  Cooke,  43  Md.  531  ; 
Wilcox  V.  Fitch,  20  Johns.  (N.  Y.) 
472. 

^  Ford  V.  Johnston,  7  Hun  (N.  Y.) 
567 ;  Slater  v.  Sherman,  5  Bush  (Ky.) 
206. 

*  Strong  V.  Strong,  18  Beav.  408. 

'  Beckwith  v.  Burrough,  14  R.  I.  368. 

*  Bayard  v.  Hoffman,  4  Johns.  Ch, 
(N.  Y.)   450,    per    Chancellor   Kent ; 


Hadden  v.  Spader,  20  Johns.  (N.  Y.) 
554;  Weed  V.  Pierce,  9  Cow.  (N.  Y.) 
723,  per  Chancellor  Walworth ;  Ed- 
meston  v.  Lyde,  i  Paige  (N.  Y.)  641  ; 
Beckwith  v.  Burrough,  14  R.  I.  366. 

"  Norcutt  V.  Dodd,  i  Cr.  &  Ph.  100. 

'"  Stokoe  V.  Cowan,  29  Beav.  637 ; 
Skarf  V.  Soulby,  i  Macn.  &  G.  364  ; 
/;/  re  Trustee  Relief  Act,  5  De  G.  &  S. 
I  ;  Burton  v.  Farinholt,  86  N.  C.  260 ; 
^tna  Nat.  Bank  v.  Manhattan  Life 
Ins.  Co.,  24  Fed.  Rep.  769. 

''  Sims  V.  Gaines,  64  Ala.  397. 

'^  Scott  V.  Indianapolis  Wagon 
Works,  48  Ind.  78. 

'3  Bigelow  V.  Ayrault,  46  Barb.  (N. 

Y.)  143. 

'•»  ^tna  Nat.  Bank  v.  Uhited  States 
Life  Ins.  Co.,  24  Fed.  Rep.  770. 

'^  Greenwood  v.  Brodhead,  8  Barb. 
(N.  Y.)  597  ;  Drake  v.  Rice,  130  Mass. 
410. 

'*  Stevenson  v.  Stevenson,  34  Hun 
(N.Y.)  157. 


§22  twyne's  case.  43 

and  the  main  principles  that  control  the  determination  of 
the  different  phases  of  fraudulent  conveyances  can  gener- 
ally be  traced  to  this  parent  root.  That  the  case  should  at 
this  late  day  be  so  widely  cited  and  relied  upon  is  conclu- 
sive proof  that  it  embodies  a  forcible  exposition  of  sound 
and  necessary  rules  affecting  covinous  transfers,  which 
neither  lapse  of  time  nor  change  in  circumstances  can 
supersede.  The  case  attains  the  same  relative  prominence 
as  a  precedent  in  the  authorities  that  is  accorded  to  the 
statute  13  Eliz.  c.  5,  as  a  model  for  modern  legislative 
enactments.  It  seems  indeed  strange  that  so  many  evi- 
dences and  badges  of  fraud,  common  with  us  now,  should 
have  concentrated  in  such  an  early  case,  and  should  have 
been  so  swiftly  and  skilfully  detected  and  labelled.  If  the 
facts  of  this  case  are  not  partially  fictitious,  and  there  is 
little  reason  to  credit  the  intimation  that  they  are,  then  it 
follows  that  the  methods  and  devices  of  the  fraudulent 
debtar  have  undergone  few  alterations  since  this  remarka- 
ble decision  was  promulgated. 


CHAPTER    11. 

PROPERTY      SUSCEPTIBLE      OF     FRAUDULENT     ALIENATION. 
ASSETS    AVAILABLE    TO    CREDITORS. 


§  23.  What  interests  may  be  reached. 

24.  Tangible  property  and  intangible 

interests. 

25.  English  statutes  and  authorities. 

26.  Recovering  improvements— Rents 

and  profits. 

27.  Rule  as  to  crops. 

28.  Property  substituted  or  mingled. 

29.  Estates  in  remainder  and  rever- 

sion. 

30.  Equitable  interests. 

31.  Equity  of  redemption. 

32.  Reservations. 

33.  Choses  in  action. 

34.  Claims  for  pure  torts — Damages. 

35.  Seats  in  stock  exchanges. 

36.  Trade-marks. 

37.  Reaching  book  royalties. 


,38. 
39- 
40. 

41. 

42. 
43- 

44. 

45- 
46. 

47. 


49. 
50. 
$oa 


Patent  rights. 

Powers,  when  assets  for  creditors. 

Statutory  change  as  to  powers  in 
New  York. 

Gifts  of  small  value. 

Debts  forgiven  or  cancelled. 

Enforcing  promises  of  third  par- 
ties. 

Tracing  the  fund. 

Income  of  trust  estate. 

Rule  as  to  exempt  property. 

Fraudulent  purchases  of  exempt 
property. 

Covinous  alienations  of  exemp- 
tions. 

Conflicting  cases. 

Abandoned  exemptions. 

.  What  cannot  be  reached. 


§  23.  What  interests  may  be  reached. — Having  considered 
the  early  statutes  and  authorities  relating  to  covinous  alien- 
ations/ and  taken  a  general  view  of  the  subject,  it  becomes 
necessary  next  to  discuss  the  various  classes  of  property, 
and  the  rights  and  equitable  interests  of  debtors,  which  may 
constitute  the  subject-matter  of  fraudulent  alienations,  or 
which  can  be  reached  by  creditors'  bills  or  other  appro- 
priate remedies,  or  through  the  instrumentality  of  a  re- 
ceiver, liquidator,  or  assignee.  We  have  already  seen  that 
in  general  one  of  the  requisites  of  a  fraudulent  transfer  is 
that  the  property  or  thing  disposed  of  by  the  debtor  must 
be  of  some  value,  out  of  which  the  creditor  might  have 
realized  the  whole  or  a  portion  of  his  claim. ^  Hence, 
where  a  debtor  cancelled  upon  his  books,  without  consider- 


See  §§  19-22. 


-  See  §15. 


§23  WHAT    INTERESTS    MAY    BE    REACHED,  45 

ation,  an  old  account  against  one  who  was  insolvent,  it  was 
said  that  the  transaction  did  not  amount  to  a  disposition  of 
property  with  intent  to  defraud  creditors.^  The  foundation 
of  this  ruling  is  self-evident.  The  court  will  not  interest 
itself  in  any  attempt  to  extend  relief  to  a  creditor  unless 
its  process  and  judgment  can  be  rendered  practically  ef- 
fectual, and  as  a  result  of  its  action  a  substantial  benefit 
can  be  conferred  upon  the  creditor.  If  the  property  trans- 
ferred and  sought  to  be  reached  and  subjected  to  the  pro- 
cess of  the  court  is  not  liable  to  execution, ~  or  if  the  debtor 
has  no  beneficial  interest  in  it,  the  court  will  not  inquire 
into  the  modes  or  motives  of  its  disposition.  Such  an  in- 
quiry w^ould  be  futile.  In  Hamburger  v.  Grant, '^  it  appeared 
that  the  amount  of  the  indebtedness  to  the  complainant 
was  three  dollars  and  fifty  cents.  In  an  action  to  cancel  a 
fraudulent  conveyance,  Kelly,  J.,  observed  :  "  The  interposi- 
tion of  a  court  of  equity  ought  not  to  be  asked  to  set  aside 
a  deed  on  the  ground  of  fraud  for  such  a  small  sum  of 
money.""*  The  value  of  the  assigned  property  is  always 
important  as  bearing  upon  the  question  of  fraud. ''  It  is 
difficult  to  understand  how  a  transfer  of  property  which  is 
of  no  value,*'  or  in  which  the  creditor  has  no  substantial  in- 
terest,''^ can  be  considered  as  in  fraud  of  creditors.*^     In  New 


'  Hoyt  V.  Godfrey,  88  N.  Y.  669.  Walker.  7  How.  Pr.  (N.  Y.)  46;  Douw 
^  See  §  46.  V.  Shelden,  2  Paige  (N.  Y.)  323  ;  Sinets 
»  8  Oregon  182.  v.    Williams,   4    Paige    (N.    Y.)    364; 
"  Compare  Ithaca  Gas  Light  Co.  v.  Thomas  v.  McEwen,   11  Paige  (N.  Y.) 
Treman,  93  N.  Y.  660;    Chapman  v.  131),  but  the  statute  and  practice  have 
Banker  &  Tradesman   Pub.   Co.,   128  since  been  changed  and  equitable  ac- 
Mass.   478;    Smith   v.   Williams,    116  tions  involving  less  than  $100  will  now- 
Mass.  510,  513.  be  entertained  in  that  State.     Marsh  v. 
'"  By  the  former  chancery  practice  in  Benson,  34  N.  Y.  358  ;  Braman  v.  John- 
New  York  if  the  amount  or  value   in  son,  26  How.  Pr.  (N.  Y.)  27. 
dispute   did  not   exceed   $100  the  de-  ''  Stacy   v.    Deshaw,  7  Hun  (N.  Y.) 
fendant  could,  under  the   statute   and  451.     See  §41. 

rule,  raise  the  objection  that  the  sum  '  Youmans  v.  Boomhower,  3  T.  &  C. 

in  controversy  was  beneath  the  dignity  (N.  Y.)  21. 

of  the   court,  and    thus  secure  a  dis-  "  In  Garrison  v.  Monaghan.  33  Pa. 

missal    of   the    bill    (see    Shepard   v.  St.  234.  the  court  said  :  "  The  deeds  by 


46 


WHAT    INTERESTS    MAY    BE    REACHED. 


§   23 


York  it  is  provided  by  statute  that  insurance  may  be  placed 
upon  a  husband's  life  for  the  sole  benefit  of  his  wife  free 
from  creditors.^  Policies  of  this  kind  are  held,  in  a  general 
sense,  not  to  be  assignable  by  the  wife.^  In  a  case,  how- 
ever, where  a  wife  assigned  such  a  policy  to  her  children, 
and  her  creditors  sought  to  avoid  the  transfer,  it  was  held 
that  they  were  not  in  a  position  to  do  so,  but  the  transfer 
was  to  be  regarded  in  the  light  of  a  disposition  of  property 
exempt  from  execution,  concerning  which  the  creditor  had 
no  right  to  complain.^     A  married  man,  we  may  here  ob- 


which  these  premises  passed  to  the  de- 
fendant were  clearly  fraudulent  and 
void,  and  the  sheriff's  sale,  therefore, 
vested  the  real  title  to  them  in  the  pur- 
chaser and  his  assigns.  It  is,  therefore, 
his  land,  and  as  he  takes  it  freed  from 
all  judgments  and  liens,  except  the  re- 
duced ground-rent  of  $50,  no  one  claim- 
ing under  the  defendant  in  the  execu- 
tion can  pretend  to  hold  it  against 
him  upon  the  ground  that  it  has  or 
had  no  value.  If  I  have  a  title  to  real 
or  personal  property,  no  person  can 
withhold  it  from  me  upon  the  simple 
allegation  that  it  is  of  no  value,  and  then 
ask  to  have  that  question  submitted  to 
a  jury.  The  case  of  Fassit  v.  Phillips, 
4  Whart.  (Pa.)  399,  which  proceeded 
on  this  erroneous  principle,  has  been 
repeatedly  overruled,  after  giving  rise 
to  numberless  lawsuits."  It  is  appar- 
ently regarded  as  a  most  dangerous  in- 
novation upon  the  well-settled  principle 
that  the  owner  of  real  or  personal 
estate,  who  is  entitled  to  its  posses- 
sion, shall  enjoy  it  himself,  and  that  a 
stranger  will  not  be  heard  to  assert 
that  the  property  is  worth  nothing  when 
called  upon  to  restore  it  to  the  true 
owner.  This  may  seem  to  conflict 
with  the  text.  While  the  argument  of 
the  learned  court  as  to  the  right  of  an 
owner  to  recover  his  property,  even 
though  it  is  without  pecuniary  value,  is 


sound,  yet,  technically  speaking,  a  cred- 
itor cannot  be  regarded  as  the  owner  of 
his  debtor's  property.  Especially  in 
cases  where  the  creditor  appeals  to  the 
equity  side  of  the  court,  and  seeks  a 
discovery  of  assets,  the  machinery  of 
justice  ought  not  to  be  set  in  motion  to 
reach  property  of  trivial  or  nominal 
value.  It  is  not  easy  to  see  how  prop- 
erty of  this  character  can  be  the  subject 
of  a  fraudulent  design.  See  French  v. 
Holmes,  67  Me.  190.  Hopkirk  v.  Ran- 
dolph, 2  Brock.  140. 

'  Laws  of  New  York,  1840,  c.  80. 

*  Eadie  v.  Slimmon,  26  N.  Y.  9 ; 
Barry  v.  Equitable  Life  Assurance  So- 
ciety, 59  N.  Y.  587. 

'  Smillie  v.  Quinn,  25  Hun  (N.  Y.) 
332.  See  §  46.  Insurance  placed  upon 
his  life  by  an  insolvent  for  the  benefit 
of  his  wife,  is  not  necessarily  in  fraud 
of  creditors.  Thompson  v.  Cundiff,  1 1 
Bush  (Ky.)  567.  Compare  Nippes' 
Appeal,  75  Pa.  St.  478  ;  Gould  v.  Emer- 
son, 99  Mass.  154;  Durian  v.  Central 
Verein,  7  Daly  (N.  Y.)  171  ;  Leonard  v. 
Clinton,  26  Hun  (N.  Y.)  290.  And  in 
order  to  maintain  an  action  in  behalf  of 
creditors  of  a  deceased  person  against 
a  life  insurance  company  to  recover 
premiums  alleged  to  have  been  fraudu- 
lently paid  by  the  decedent  while  in- 
solvent, for  the  benefit  of  his  family,  it 
must  be  alleged  and  proved  that  the 


§   24  TANGIBLE    PROPERTY.  47 

serve,  has  a  right  to  devote  a  reasonable  portion  of  his 
earnings  to  Hfe  insurance  for  the  benefit  of  his  family.^  It 
has  been  said  to  be  a  well-settled  rule  that  a  creditor's  bill, 
filed  for  the  purpose  of  removing  a  fraudulent  obstruction, 
must  show  that  such  removal  will  enable  the  judgment  to 
attach  upon  the  property ;  ^  hence  a  valid  general  assign- 
ment will  supplant  a  creditor's  proceedings  to  cancel  an  in- 
strument^ such  as  a  mortgage'*  if  the  assignee  and  not  the 
creditor  would  be  the  party  benefited  by  a  successful  issue 
in  the  suit. 

§  24.  Tangible  property  and  intangible  interests. — What 
interests  then  can  be  reached  by  creditors  ?  Manifestly  all 
tangible  property,  whether  real  or  personal,  which  would 
have  been  subject  to  levy  and  sale  under  execution,  is  sus- 
ceptible of  fraudulent  alienation,  and  may  be  reclaimed  and 
recovered  by  the  creditor  where  it  has  been  transferred  by 
the  debtor  with  a  fraudulent  mtention.  The  line  is  not 
drawn  here,  however.  The  manifest  tendency  of  the 
authorities  is  to  reclaim  every  species  of  the  debtor's  prop- 
erty, prospective  or  contingent,  for  the  creditor.  As  has 
been  shown,  transfers  of  intangrible  interests^  and  riirhts  in 
action,   stocks,^    annuities,''   life   insurance    policies,^   book 


company    participated    in    the   fraud,  v.  Kearney,  2  Barb.  Ch.  (N.  Y.)  533 ; 

Washington    Central   Bank  v.  Hume,  Waggoner  v.  Speck,  3  Ohio  293 ;  nor 

128  U.  S.  195.  can  they  enforce  a  moral  claim  which 

'  Washington  Central  Bank  v.  Hume,  a  debtor  may  have  upon  the  conscience 

128  U.S.  195.  of   an    executor.     Sparks    v.    De    La 

'^  Spring  V.  Short,  90  N.  Y.  545.    See  Guerra,  18  Gal.  676. 

Geery  v.  Geery,  63  N.  Y.  252 ;  South-  "  Bayard  v.   HofTman,  4  Johns.  Ch. 

ard  V.  Benner,  72  N.  Y.  424.  (N.  Y.)  450;  Weed  v.  Pierce.  9  Cow. 

^  Childs  V.  Kendall,  17  Weekly  Dig.  (N.  Y.)   723;    Edmeston   v.    Lyde,    i 

(N.  Y.)  546.  Paige  (N.  Y.)  641. 

^  Spring  V.   Short,  12  Weekly  Dig.  '  Norcutt  v.  Dodd,   i    Craig  &  Ph. 

(N.  Y.)  360  ;  affi'd  90  N.  Y.  545.     But  100. 

see  Leonard  v.  Clinton,  26  Hun  (N.  Y.)  '  Burton  v.  Farinholt,  86  N.  C.  260  ; 

288.  Stokoe  V.  Cowan,  29  Beav.  637  ;  Jcnkyn 

'A   bare    possession    or    possibility  v.  Vaughan,  3  Drew.  419;  Anthracite 

cannot  be  reached  by  creditors :  Smith  Ins.  Co.  v.  Sears,  109  Mass.  3S3. 


48  ENGLISH    STATUTES    AND    AUTHORITIES.  §  25 

royalties/  patent  rights,^  property  of  imprisoned  felons,'^ 
legacies,"*  and  choses  in  action  generally,^  may  be  reached. 
It  has  been  observed^  that  the  principle  toward  which  the 
hiohest  courts  in  England  and  in  all  the  States  are  more  or 
less  rapidly  working  is  :  "  That  the  entire  property  of  which 
a  debtor  is  the  real  or  beneficial  owner,  constitutes  a  fund 
which  is  primarily  applicable,  to  the  fullest  extent  of  its  en- 
tire value,  to  the  payment  of  its  owner's  debts.  And  the 
courts  will  not  allow  any  of  that  value  to  be  withdrawn 
from  such  primary  application,  if  they  can  find  any  legal 
or  equitable  ground  on  which  to  prevent  such  withdrawal." 
Creditors  should  remember  that  whether  an  equitable  in- 
terest in  real  estate  is  liable  to  be  appropriated  by  legal  pro- 
cess to  the  payment  of  the  debts  of  the  beneficiary  is  to  be 
determined  by  the  local  law  where  the  property  has  its  situs? 

§  25.  English  statutes  and  authorities. — Mr.  May,  an  Eng- 
lish writer  upon  this  general  subject  of  fraudulent  aliena- 
tions, speaking  of  the  kinds  of  property  or  interests  which 
may  be  reached  by  creditors,  says  :^  "The  preamble  of  the 
13  Eliz.  c,  5,  declares  it  to  be  made  'for  the  avoiding  and 
abolishing  of  feigned,  covinous,  and  fraudulent  feoffments, 
gifts,'  etc.,  'as  well  of  lands  and  tenements  as  of  goods  and 
chattels,'  madeto  delay  or  defraud  creditors;  and  it  seems 
that  under  this  description  are  included  all  kinds  of  prop- 
erty, real  and  personal,  legal  and  equitable,^  vested,  rever- 

1  Lord  V.  Harte,  118  Mass.  271.  21  N.  J.  Eq.  364.     But  compare  Stew- 

^  Barnes  v.  Morgan,  3  Hun  (N,  Y.)  art  v.  English,  6  Ind.  176;  Wallace  v. 

704.  Lawyer,  54  Ind.  501  ;  Grogan  v.  Cooke, 

''■  Matter  of  Nerac,  35  Cal.  392.  2  Ball  &  B.  233  ;  Nantes  v.  Corrock,  9 

•*  Bigelow  V.  Ayrault,  46  Barb.  (N.  Y.)  Ves.  1 88. 

143.  *  Essay    by    John    Reynolds,    Esq., 

^  Drake   v.    Rice,    130    Mass.    410;  z\\t^  supra. 

Pendleton    v.    Perkins,    49   Mo.    565;  'Spindle  v.  Shreve,  iii  U.  S.   542; 

Powell  V.  Howell,  63  N.  C.  283 ;  Ed-  Nichols   v.    Levy,    5    Wall.   433.     See 

meston  v.  Lyde,  i  Paige  (N.  Y.)  637  ;  Nichols  v.  Eaton,  91  U.  S.  716-729, 

Stinson  v.  Williams,  35  Ga.  170;  Rog-  "  May  on  Fraudulent  Conveyances, 

ers  V.  Jones,  i  Neb.  417  ;  City  of  New-  p.  17. 

ark   V.    Funk,   15    O.   S.  462;   Hitt   v.  "  Ashfield     v.    Ashfield,     2     Vern. 

Ormsbee,  14  111.  233;  Tantum  v.  Green,  287. 


§26  IMPROVEMENTS RENTS    AND    PROFITS.  49 

sionaiy,^  or  contingent,^  which  are  subject  to  the  payment 
of  debts,  or  liable  to  be  taken  in  execution  at  the  time  of 
the  fraudulent  conveyance."^  Generally  speaking,  the  same 
general  principle  and  rule  of  interpretation  may  be  deduced 
from  the  American  authorities.'* 

§  26.  Recovering  improvements — Rents  and  profits.— An 
extreme  illustration  of  the  disposition  of  the  courts  to  favor 
creditors  is  the  familiar  and  salutary  rule  that  improvements 
placed  by  a  debtor  upon  real  property  of  another,  acting  in 
concert  with  him  to  defraud  creditors,  can  be  followed,  and 
the  realty  charged  in  favor  of  creditors  of  the  debtor  with 
the  value  of  such  improvements.^  In  I  sham  v.  Schafer,® 
Johnson,  J.,  said  :  "  Where  no  debt  has  been  created  be- 
tween the  parties  to  the  fraudulent  transaction,  and  the 
personal  property  of  the  judgment-debtor  has  merged  in, 
and  become  part  of  the  real  estate  of  another  in  this  way, 
the  appropriate,  if  not  the  only  remedy  is  to  fasten  the 
judgment  upon  the  real  estate  to  the  extent  of  the  judg- 
ment-debtor's property  thus  made  part  of  the  realty."     In 


'  Edev.  Knowles,  2  Y.  &C.  N.  R.  172.  shares  in  public  funds  and  public  com-' 

-  French  v.  French,  6  De  G.,  M.  &  G.  panies  [i  and  2  Vict.  c.  1 10,  §§  14  and 

95.  15  ;  Warden  v,  Jones,  2  De  G.  &  J.  76  ; 

^  Sims  V.  Thomas,  12  Adol.  &.  El.  Goldsmith  v.  Russell,  5  De  G.,  M.  &  G. 

536;  Turnley  v.  Hooper,  2  Jur.  (N.  S.)  547],  are  to  be  considered  as  'goods 

1081.  and  chattels'   within  the  meaning  of 

''  Mr.  May  further  observes:  "By  i  this  section  [13  Eliz.  c.  5,  §  i]."     May 

and  2  Vict.  c.  no,  many  kinds  of  proper-  on  Fraudulent  Conveyances,  p.  21. 
ty  have  been  made  available  to  creditors        "  See  Rose  v.  Brown,  1 1  W.  Va.  137  ; 

for  the  payment  of  debts.   So  that  now  Heck  v.  Fisher,  78  Ky.  644  ;  Robinson 

copyhold  land  [i  and  2  Vict.  c.  no,  s.  v.   Huffman,   15   B.    Mon.   (Ky.)   82; 

II,  and  see  Bott  v.   Smith,  21   Beav.  Athey  v.  Knotts,  6  B.  Mon.  (Ky.)  29; 

511],  money  and  banknotes  [ibid.  §  12,  Sexton   v.  Wheaton,    8   Wheat.    229; 

Barrack  v.  McCulloch,  3  K.  &  J.  iio;  Kirby  v.  Bruns,  45  Mo.  234;  Lockhard 

Collingridge  v.  Paxton,  11  C.  B.  683]  v.    Bcckley,   10  W.  Va.    87;    Burt   v. 

(whether  of  the  Bank  of  England  or  of  Timmons,   29  W.   Va.   453;    Dietz  v. 

any  other  bank  or  bankers),  and  any  Atwood,  19  Brad.  (111.)  99;  Isham  v. 

cheques,  bills  of  exchange,  promissory  Schafer,  60   Barb.   (N.  Y.)    317  ;    but 

notes,  bonds,  specialties,  or  other  se-  compare  Webster  v.  Hildreth,  33  Vi. 

curities  for  money  [Spirett  v.  Willows,  457  ;  Caswell  v.  Hill,  47  N.  H.  407. 
II    Jur.   (N.  S.)  70],   and   stock   and        "^  60  Barb.  (N.  Y.j  330. 
4 


50         IMPROVEMENTS — RENTS  AND  PROFITS.       §  26 

a  New  Hampshire  case  it  was  held  that  a  guardian  could 
not  purchase  property  and  place  it  on  the  land  of  his  ward 
to  the  injury  of  his  creditors ;  ^  but  the  property  was  not 
attached  to  the  freehold,  and  the  doctrine  may  well  be 
doubted  whether  an  infant's  land  can  be  subjected  to  the 
claims  of  creditors  against  a  debtor  who  has  placed  improve- 
ments on  it.^  In  Lynde  v.  McGregor,^  where  it  appeared 
that  an  insolvent  husband  had  made  extensive  expenditures 
upon  lands  belonging  to  his  wife,  and  had  increased  the 
value  of  the  estate.  Gray,  J.,  observed  :  "  The  amount  of 
such  increase  in  value,  for  which  no  consideration  has  been 
paid  by  the  wife,  and  which  has  been  added  to  her  estate 
by  the  husband  in  fraud  of  his  creditors,  in  equity  belongs 
to  them,  and  may  be  made  a  charge  upon  the  land  for  their 
benefit."  Temporary  or  perishable  improvements,*  which 
do  not  add  to  the  permanent  value  of  the  land,  cannot  ordi- 
narily be  reached. 

It  is  certainly  reasonable,  and  it  seems  to  be  clear,  that 
rents  and  profits  can  be  recovered  from  a  fraudulent  grantee 
who  holds  the  property  under  a  secret  trust  for  the  debtor.^ 
A  creditor,  by  filing  a  bill  after  the  return  of  an  execution 
unsatisfied,  may  also  obtain  a  lien  upon  the  rents  and  prof- 
its of  the  real  estate  of  his  judgment-debtor,  which  accrue 
during  the  fifteen  months  allowed  by  law  to  redeem  the 
premises  from  a  sale  by  the  sheriff  on  execution,  and  satis- 
faction of  the  judgment  may  be  decreed  out  of  such  rents 
and  profits.  The  chancellor  said  :  "  Upon  what  principles 
of  justice  or  equity  can  the  debtor  claim  to  retain  the  whole 


'  Tenney  v.  Evans,  14  N.  H.  343;  S.  ^  Marshall  v.   Croom,  60  Ala.  121. 

C.  40  Am.  Dec.  194.  See   Kipp   v.   Hanna,   2   Bland's   Ch. 

-  Mathes  v.  Dobschuetz,  72  111.  438.  (Mel.)  26;  Robinson  v.  Stewart,  10  N. 

Compare  Washburn  V.  Sproat,  16  Mass.  Y.   190.     Compare   Edwards    v.   Ent- 

449.  wisle,  2   Mackey  (D.  C.)  43  ;    Hadley 

*  13  Allen  (Mass.)  182.  v.  Morrison,  39  111.  392  ;  Thompson  v. 

^  See  Sedgwick  &  Wait  on  Trial  of  Bickford,  19  Minn.  17. 
Title  to  Land,  2d  ed.,  §  702 ;  Dick  v. 
Hamilton,  i  Deady  322. 


§§   27,   28  RULE    AS    TO    CROPS.  5 1 

rents  and  profits  of  a  large  real  estate,  for  the  period  of  fif- 
teen months,  when  such  rents  and  profits  are  necessary  to 
pay  the  debts  whicli  he  honestly  owes  to  his  creditors?"^ 
In  Loos  V.  Wilkinson,^  Earl,  J.,  used  these  words  :  "  These 
debtors  could  no  more  giv^e  away  the  rents  and  })rofits  of 
their  real  estate  than  they  could  give  away  the  real  estate 
itself."^ 

§  27.  Rule  as  to  crops. — The  same  general  principle  per- 
vades the  cases  as  to  growing  crops.  Thus,  in  Fury  v. 
Strohecker,*  it  was  decided  that  a  judgment-creditor  was 
entitled  to  resort  to  crops  grown  upon  the  land  of  his 
debtor  after  it  had  been  transferred  in  fraud  of  his  rights, 
so  far  at  least  as  the  fraudulent  grantor  retained  an  interest 
in  them  by  an  understanding  with  the  grantee  ;  and  where 
there  was  reason  to  suppose  such  collusion  existed  all  doubts 
should  be  solved  in  the  creditor's  favor.^  And  in  Massa- 
chusetts it  was  decided  that  if  a  debtor  conveyed  land  tu 
his  wife,  with  a  design  to  defraud  his  creditors,  and  the 
wife  participated  in  the  intent,  hay  cut  on  the  land  was 
liable  to  be  taken  on  execution  to  satisfy  the  claim  of  a 
creditor  of  the  husband,  upon  a  debt  contracted  subsequent 
to  the  conveyance.^ 

§  28.  Property  substituted  or  mingled. — Property  cannot 
be  placed  beyond  the  reach  of  creditors  by  a  chano;e 
in  its  form  or  character.  It  may  be  traced  and  identitied. 
In  McClosky  v.  Stewart,''  the  creditor  sought  to  reach  cer- 
tain machinery,  tools,  etc.,  constituting  the  "plant"  of  a 


1  Famham  v.  Campbell,  10  Paige  (N.  ■•  44  Mich,  337. 

Y.)  598-601.     See  Campbell  v.  Genet,  '  Compare  Pierce  v.  Hill,  35  Mich. 

2  Hilt.  (N.  Y.)  296  ;  Dow  v.  Platner,  201  ;  Peters  v.  Light,  76  Pa.  St.  289  ;. 

l6  N.  Y.  565;  Schermerhorn  v.  Mer-  Jones  v.  Bryant,  13  N.  H.  53;  Garbutt 

rill,  I  Barb.   (N.  Y.)    517;    Strong   v.  v.  Smith,  40  Barb.  (N.  Y.)  22. 

Skinner,  4  Barb.  (N.  Y.)  558.  >=  Dodd     v.     Adams,     125      Miss. 

■^  no  N.  Y.  214.  398. 

"  But  compare  Robinson  v.  Stewart,  '  63  How.  Pr.  (N.  Y.)  142.    Sec  Leh- 

10  N.  Y.  189;  Collumb  v.  Read,  24  N.  man  v.  Kellv,  68  ,\la.  192. 
Y.  505. 


0^ 


ESTATES    IN    REMAINDER    AND    REVERSION.  §   29 


business  fraudulently  transferred,  and  the  defendant  at- 
tempted to  limit  the  recovery  to  such  property  as  was  in 
existence  at  the  time  of  the  transfer.  The  court  declined 
to  apply  this  rule  to  the  new  tools  and  machinery  which 
had  been  purchased  for  the  purpose  of  supplying  the  waste 
incident  to  ordinary  wear  and  tear.  The  parties  in  posses- 
sion having  had  the  benefit  of  the  machinery  and  tools,  and 
having  partially  worn  them  out  in  the  business,  might  be 
said  to  have  had  the  benefit  of  the  waste,  and  there  was  no 
reason  in  law  or  in  equity  why  the  repairs  and  new  tools, 
which  were  rendered  necessary  to  supply  such  waste,  should 
not  follow  the  property  itself.-' 

§  29.  Estates  in  remainder  and  reversion. — A  vested  re- 
mainder in  fee  is  liable  for  debts  in  the  same  way  as  an 
estate  vested  in  possession.  Though  the  time  of  possession 
is  dependent  upon  the  termination  of  a  life  estate,  this  only 
lessens  its  value  for  the  time  being.  The  liability  of  the 
estate  to  creditors  is  not  in  the  least  affected.  In  Nichols 
v.  Levy,^  Swayne,  J.,  delivering  the  opinion  of  the  United 
States  Supreme  Court,  said  :  "  It  is  a  settled  rule  of  law 
that  the  beneficial  interests  of  the  cestui  que  trust,  whatever 
it  may  be,  is  liable  for  the  payment  of  his  debts.  It  cannot 
be  so  fenced  about  by  inhibitions  and  restrictions  as  to 
secure  to  it  the  inconsistent  characteristics  of  right  and  en- 
joyment to  the  beneficiary  and  immunity  from  his  creditors. 
A  condition  precedent,  that  the  provision  shall  not  vest 
until  his  debts  are  paid,  and  a  condition  subsequent,  that  it 


'  It  was  further  decided  in  this  same  identified  and  separated  it  is  difficult 

case  that  where  a  fraudulent  transferee  to  see  why  this  harsh  rule  should  be 

mingled   his  own   property  with  that  applied.     Compare   Hooley   v.    Gieve, 

which  he  had  fraudulently  received,  he  affirmed  82  N.  Y,  625,  on  opinions  in 

would  not  be  allowed  to  claim  that  the  New   York   Common  Pleas  ;    S.  C.    9 

property    so    mingled    should    subse-  Abb.  N.  C.  (N.  Y.)  8,  41,  and  note  of 

quently  be  assorted  and  set  aside  for  the  editor;  Dow  v.  Berry,  17  Fed.  Rep. 

the  payment  of  the  creditors.     The  in-  121  ;  Smith  v.  Sanborn,  6  Gray  (Mass.) 

ference  seems  to  be  that  he  would  lose  134;  The  "  Idaho,"  93  U.  S.  575. 

it  all.     If  the  property  could  be  readily  "^  5  Wall.  433. 


§  2,0  EQUITABLE    INTERESTS.  53 

shall  be  divested  and  forfeited  by  his  insolvency,  wilh  a 
limitation  over  to  another  person,  are  valid,  and  the  law 
will  give  them  full  effect.  Beyond  this,  protection  from 
the  claims  of  creditors  is  not  allowed  to  go."^  In  French 
v.  French,^  it  was  held  that  a  contingent  reversionary  inter- 
est is  within  the  statute,^ 

§  30.  Equitable  interests. — Equitable  interests  constitute 
a  frequent  subject-matter  of  creditors'  suits.  In  Sanford  v. 
Lackland,^  the  learned  Dillon,  J.,  held  that  if  property  was 
given  to  trustees  to  hold  for  A.  until  he  reached  the  age  of 
twenty-six  years,  when  it  was  to  be  paid  over  to  him,  and 
A.  became  bankrupt  before  he  arrived  at  twenty-six,  his 
assignee  in  bankruptcy  was  entitled  to  the  property.  Chief- 
Justice  Gray,  in  Sparhawk  v.  Cloon,^  says,  that  "  the  equit- 
able estate  for  life  is  alienable  by,  and  liable  in  equity  to 
the  debts  of  the  cestui  que  trust,  and  that  this  quality  is  so 
inseparable  from  the  estate,  that  no  provision,  however  ex- 
press, which  does  not  operate  as  a  cesser,  or  limitation  of 
the  estate  itself,  can  protect  it  from  his  debts." "^  We  shall 
presently  consider  the  cases,  which  must  be  distinguished 
from  the  ones  just  cited,  in  which  it  is  held  that  the  founder 
of  a  trust  may  secure  the  enjoyment  of  it  to  other  persons, 
the  objects  of  his  bounty,  by  providing  that  it  shall  not  be 


'  Citing-  Graves  v.  Dolphin,  i  Simon         '  125  Mass.  266. 
66;    Mebane  v.  Mebane,  4  Ired.   Eq.         *  See  Brandon  v.  Robinson,  18  Ves. 

(N.  C.)  131;  Bank  v.  Forney,  2  Ired.  429;   S.  C.  i    Rose  197;    Rochford  v. 

Eq.  (N.C.)  i8i-i84;Snowdonv.  Dales,  Hackman,  9  Hare  475  ;  2  Spence's  Eq. 

6  Simon  524;  Foley  v.  Burnell,  i  Bro.  Jur.  89,  and  cases  cited;  Tillinghast  v. 

C.  C.  274;  Brandon  v.   Robinson,  18  Bradford,  5  R.  I.  205;  Mebane  v.  Me- 

Ves.  429;  Piercy  v.  Roberts,  i  Mylne  bane,  4  Ired.  Eq.  (N,  C.)  131  ;  Heath 

&  K.  4 ;  Dick  v.  Pitchford,   i  Dev.  &  v.   Bishop,    4    Rich.    Eq.    (S.  C.)    46 ; 

Bat.  (N.  C.)  Eq.  484.  Smith  v.  Moore,  37  Ala.  327  ;  Mcllvaine 

=  6  De  G.,  M.  &  G.  95.     See  Neale  v.  Smith,  42  Mo.  45  ;  Sanford  v.  Lack- 

V.  Day,  28  L.  J.  Ch.  45.  land,  2    Dillon    6  ;    Walworth,  C,    in 

*  A  contingent  remainder  is  not  sub-  Hallett  v.  Thompson,  5  Paige  (N.  Y.) 

ject  to  execution.     Jackson  v.  Middle-  583,   585  ;   Comstock,  J.,  in    Bramhall 

ton,   52  Barb.   (N.  Y.)   9;  Watson  v.  v.  Ferris,   14   N.   Y.  41,  44;    Swayne. 

Dodd,  68  N.  C.  528.  J.,  in   Nichols  v.    Levy.   5  Wall.  433. 

•*  2  Dillon  6.  441- 


54  EQUITY    OF    REDEMPTION. RESERVATIONS.       §§   3 1,  32 

alienable  by  them,  or  be  subject  to  be  taken  by  their  credit- 
ors, and  that  his  intentions  in  this  regard  will,  in  certain 
cases,  be  respected  by  the  courts.^ 

A  creditor's  bill,  through  the  instrumentality  of  a  re- 
ceiver, will  reach  the  interest  of  the  debtor  in  his  deceased 
father's  estate ;  ^  so  an  inchoate  interest  such  as  a  tenancy 
by  the  courtesy,^  and  a  widow's  dower,^  may  be  reached  by 
the  aid  of  a  court  of  equity. 

§  31.  Equity  of  redemption. — In  a  controversy  which 
arose  in  Alabama,^  it  was  said  that,  aside  from  constitu- 
tional and  statutory  exemptions,  a  debtor  could  not  own 
any  property  or  interest  in  property  which  could  not  be 
reached  and  subjected  to  the  payment  of  his  debts,  and 
that  an  equity  of  redemption  was  property,  and  was  a  valu- 
able right,  capable  of  being  subjected  to  the  payment  of 
debts,  in  courts  of  law  and  in  equity  ;  and  hence  a  transac- 
tion by  which  an  embarrassed  debtor  concealed  the  exist- 
ence of  such  an  interest  from  his  creditors  must  necessarily 
hinder  and  delay  them.^ 

§  32.  Reservations. — Debtors  often  make  reservations  in 
conveyances  for  their  own  benefit,  but  such  subterfuges  are 
idle  so  far  as  subserving  the  debtors'  personal  interest  is 
concerned.'''  In  Grouse  v.  Frothingham,^  the  debtor  re- 
served the  right  to  use  and  occupy  a  part  of  the  premises 


'  See  Sparhawk  v.  Cloon,  125  Mass.  643  ;  Beamish  v.  Hoyt,  2  Robt.  (N.  Y.) 

266 ;  White  v.  White,  30  Vt.  338,  344 ;  307. 

Arnwine  v.  Carroll,  8  N.  J.  Eq.  620,  *  Tompkins  v.  Fonda,  4  Paige  (N.  Y.) 

625;  Holdship  V.  Patterson,  7  Watts  447;  Payne  v.  Becker,  87  N.  Y.  157. 

(Pa.)  547  ;    Brown   v.  Williamson,  36  ^  Sims  v.  Gaines,  64  Ala.  393. 

Pa.  St.  338 ;  Rife  v.  Geyer,  95  Pa.  St.  ^  See  Chautauque   County  Bank   v. 

393;  Nichols  V.  Eaton,  91   U.  S.  716,  Risley,    19   N.  Y.    369;    Campbell   v. 

727-729 ;  Hyde  v.  Woods,  94  U.  S.  523,  Fish,  8  Daly  (N.  Y.)  1&2. 

526;   Broadway  Bank  v.  Adams,  133  '  Young  v.  Heermans,  66  N.  Y.  382, 

Mass.  171  ;  Spindle  v.  Shreve,  9  Biss.  and  cases  cited;  Todd  v.  Monell,  19 

199;  s.  C.  4  Fed.  Rep.  136.  See  §§  39, 40.  Hun  (N.  Y.)  362. 

■^  McArthur  v.  Hoysradt,  11   Paige  "27    Hun   (N.  Y.)    125;    reversed, 

(N.  Y.)  495.  97  N.  Y.  105.     See  Elias  v.  Farley,  2 

3  Ellsworth  V.  Cook,  8  Paige  (N.  Y.)  Abb.  Ct.  App.  Dec.  (N.  Y.)  11. 


§  33  CIIOSES    IN    ACTION.  55 

conveyed  for  three  years  without  rent,  and  it  was  shown 
that  such  use  and  occupation  were  worth  $750.  The  court 
held  that  if  the  reservation  was  effectual  to  vest  in  the 
debtor  a  legal  interest  in  the  premises  to  the  extent  stated, 
his  judgment-creditors  could  reach  it.  And  if  the  debtor 
merely  had  a  parol  lease  for  three  years,  which  was  void  by 
the  statute  of  frauds,  the  consideration  being  fully  paid, 
equity  would  decree  a  specific  performance  of  it,  and  thus 
the  debtor  would  have  an  equitable  interest  of  some  value 
which  the  creditors  might  reach.  The  court  of  last  resort, 
however,  reversed  the  decision  on  the  insufficiency  of  the 
evidence.* 

§  33.  Choses  in  action, — While  the  books  and  cases  are 
full  of  general  expressions  to  the  effect  that  intangible  in- 
terests fraudulently  alienated  by  the  debtor  may  be  re- 
claimed by  the  creditor,  yet  the  rule  that  choses  in  action 
can  be  reached  by  creditors  and  subjected  to  the  payment 
of  debts,  has  not  been  established  without  a  struggle,  and 
is  not  even  now  universal  in  its  operation.'^  When  we  con- 
sider that  vast  fortunes  may  be  concentrated  in  this  species 
of  property,  it  manifestly  becomes  of  paramount  import- 
ance to  a  creditor  to  know  whether  his  process  will  cover 
it.  Cases  can  be  found  holding  that  even  equity  is  ordi- 
narily powerless  to  require  the  debtor  to  apply  choses  in 
action  in  liquidation  of  debts,^  but  it  seems  to  us  that  the 
better  authority  by  far  is  to  the  effect  that  such  interests 
can  be  reached  by  creditors,'*  and  many  cases,  more  or  less 

'  Crouse  v.   Frothingham,  97  N.  Y.  Lawyer,  54  Ind.  501  ;  Stewart  v.  Eng- 

105.  lish,  6  Ind.  176  ;  Watkins  v.  Dorsett,  i 

•'  See  §  17;  Greene  v.  Keene,  14  R.  Bland's  Ch.   (Md.)   533.     See  (irecne 

I.  388.  V.  Keene.  14  R.  I.  388. 

^  Grogan    v.    Cooke,    2    Ball    &    B.  '•Drake    v.    Rice,    130   Mass.   410; 

233;  Nantes  v.  Corrock,  9  Ves.  188;  Bayard  v.  Hoffman,  4  Johns.  Ch.  (N. 

Rider  v.  Kidder,  10  Ves.  368  ;  McCar-  Y.j  450  ;  Powell  v.  Howell.  63  N.  C. 

thy  V.  Goold,  i  Ball  &  B.  387  ;  Dundas  283  ;  Abbott  v.  Tenney,  18  N.  H.  109  ; 

V.  Dutens,  i  Ves.  Jr.  196 ;    McFerran  Sargent  v.  Salmond.  27  Me.  539  ;  Stin- 

V.  Jones,  2  Litt.  (Ky.)  219;  Green  v.  son  v.  Williams,  35  Ga.  170;  Rogers 

Tantum,  19  N.  J.  Eq.  105  ;  Wallace  v,  v.   Jones,   i    Neb.    417;    Pendleton   v. 


56 


CLAIMS    FOR    PURE    TORTS. 


§  34 


founded  upon  statutory  provisions,  upholding  the  creditors' 
right  to  reach  this  class  of  assets  might  be  cited.^  Thus 
creditors  may  reach  the  proceeds  of  a  fraudulently  trans- 
ferred insurance  policy.^  The  principle  running  through 
these  cases  is  highly  important,  for  under  it  the  creditor 
may  impound  money  of  the  debtor  in  the  hands  of  a  sher- 
iff,^ money  earned  but  not  yet  due,''  money  due  to  heirs  or 
distributees  in  the  hands  of  personal  representatives,^  and 
dower  before  admeasurement.^  And  creditors  of  a  corpo- 
ration may  sustain  a  bill  to  compel  stockholders  to  pay 
their  subscriptions.^ 

§  34.  Claims  for  pure  torts— Damages. — The  mere  right 
of  action  of  a  judgment-debtor  for  a  personal  tort,  as  for 
assault  and  battery,  slander,  or  malicious  prosecution,  can- 
not, in  the  nature  of  things,  be  reached  by  a  complainant 
in  a  judgment-creditor's  action.^  Nor  will  a  claim  of  this 
kind  pass  to  a  receiver  under  the  usual  assignment  by  the 


Perkins,  49  Mo.  565  ;  Ednieston  v. 
Lyde,  i  Paige  (N.  Y.)  637  ;  Hadden  v. 
Spader,  20  Johns.  (N.  Y.)  554  ;  ^tna 
Nat.  Bank  v.  Manhattan  Life  Ins.  Co., 
24  Fed.  Rep.  769. 

^  City  of  Newark  v.  Funk,  15  Ohio 
St.  462 ;  Bryans  v.  Taylor,  Wright 
(Ohio)  245;  Davis  v.  Sharron,  15  B. 
Mon.  (Ky.)  64 ;  Hitt  v.  Ormsbee,  14 
111.  233  ;  Burnes  v.  Cade,  10  Bush 
(Ky.)  251  ;  Tantum  v.  Green,  21  N,  J. 
Eq.  364.  "  The  words  '  chose  in  ac- 
tion '  might  be  broad  enough  to  include 
even  actions  for  damages  in  torts,  were 
it  not  that  they  probably  have  never 
been  regarded  strictly  as  property ;  nor 
as  assignable."  Ten  Broeck  v.  Sloo, 
13  How.  Pr.  (N.  Y.)  30.  See  Hudson 
V.  Plets,  II   Paige  (N.  Y.)   180.     See 

§34. 

*  JEtna  Nat.  Bank  v.  Manhattan  Life 
Ins.  Co.,  24  Fed.  Rep.  769. 

*  Brenan  v.  Burke,  6  Rich.  Eq.  (S. 
C.)  200. 


*  Thompson  v.  Nixon,  3  Edw.  Ch.  (N. 
Y.)  457.  See  Browning  v.  Bettis,  8 
Paige  (N.  Y.)  568. 

5  Moores  v.  White,  3  Gratt.  (Va.) 
139;  Caldwell  v.  Montgomery,  8  Ga. 
106;  Ryan  v.  Jones,  15  111.  i  ;  Sayre 
v.  Flournoy,  3  Ga.  541. 

«  Stewart  v.  McMartin,  5  Barb.  (N. 
Y.)  438 ;  Tompkins  v.  Fonda,  4  Paige 
(N.  Y.)  448.  See  note  to  Donovan  v. 
Finn,  14  Am.  Dec.  542. 

'  Miers  v.  Zanesville  Co.,  11  Ohio 
273  ;  S.  C.  13  Ohio  197  ;  Henry  v.  Ver- 
milion R.R.  Co.,  17  Ohio  187;  Hatch 
v.  Dana,  loi  U.  S.  205  ;  Ogilvie  v. 
Knox  Ins.  Co.,  22  How.  380  ;  Pierce  v. 
Milwaukee  Construction  Co.,  38  Wis. 
253.  See  Marsh  v.  Burroughs,  i 
Woods  467. 

*  Hudson  V.  Plets,  1 1  Paige  (N.  Y.) 
183;  Ten  Broeck  V.  Sloo,  13  How.  Pr. 
(N.  Y.)  30.  See  Garretson  v.  Kane, 
27  N.  J.  Law  211. 


§35  SEATS    IN    STOCK    EXCHANGES. 


D/ 


defendant  in  such  a  suit.^  This  rule  proceeds  upon  the 
theory  that  such  claims  or  rights  of  action"  are  non-assign- 
able. It  must  be  remembered  in  this  connection,  however, 
that,  in  the  case  of  a  tort,  causing  an  injury  to  the  propei-ty  of 
the  judgment-debtor,  accruing  before  the  filing  of  the 
creditor's  bill,  by  means  of  which  injury  certain  property  to 
which  the  creditor  was  entitled  to  resort  for  the  payment  of 
his  debts  has  been  diminished  in  value  or  destroyed,  the 
right  of  action  appears  to  be  such  an  interest  as  may  be 
properly  reached  and  applied  to  the  payment  of  the  com- 
plainant's claim.* 

§  35.  Seats  in  stock  exchanges. — Counsel  have  contended 
in  many  cases  that  a  membership  of  a  stock  exchange  was 
a  mere  personal  privilege  or  license,  and  was  not  property 
or  a  right  to  property  w^hich  the  creditors  of  the  member 
could  reach.  Probably  the  enormous  pecuniary  value  which 
not  infrequently  attaches  to  such  a  membership  has  inspired 
the  courts  to  consider  this  so-called  privilege  as  a  species  of 
property,  the  value  of  which  the  debtor  should  not  be  al- 
lowed to  withhold  from  his  creditors.  It  may  be  said  to 
differ  from  the  membership  of  a  social  club  in  that  the  lat- 
ter has  no  general  value  or  marketable  quality,  there  being 
usually  no  provision  for  its  transfer,  and  nothing  remaining 
after  the  member's  death.  Stock  exchange  memberships, 
on  the  other  hand,  being  held  for  purposes  of  pecuniary 
gain,  may,  ordinarily,  be  bought  and  sold  subject  to  tiie 
regulations  of  the  association,  and,  after  the  owner's  death, 
may  be  disposed  of  and  the  proceeds  distributed.  For  these 
reasons  such  interests  are  held  to  be  assets.'^     In  Hyde  v. 


'Benson  v.  Flower,  Sir  W.   Jones'  How.    Pr.    (N.    Y.)    426;    Matter    of 

Rep.  215;  Hudson  v.  Plets,  11   Paige  Ketchum,  i  Fed.  Rep.  840 ;  Ritlerb.ind 

(N.  Y.)  183.  V.  Baggett,  42  Superior  Ct.  (N.  Y.)  556; 

"^  Hudson  V.  Plets,  1 1   Paige  (N.  Y.)  Colby  v.   Peabody,  52  N.  Y.  Superior 

184.     SeeTen  Broeck  V.  Sloo,  13H0W.  394;    Smith    v.   Barclay,    14    Chicago 

Pr.  (N.  Y.)  30.  Leg.    News    222 ;    and    compare    Ex 

^  See  Grocers'  Bank  v.  Murphy,  60  /ar/^- Grant,  42  L.  T.  [N.  S.]  387  ;  s.  C. 


58  SEATS  IN  STOCK  EXCHANGES.  §  35 

Woods/  such  a  membership  is  characterized  as  an  incor- 
poreal right  vVhich,  upon  the  bankruptcy  of  the  member, 
passed,  subject  to  the  rules  of  the  stock  board,  to  an  as- 
signee. It  is  said,  however,  not  to  be  a  matter  of  absolute 
purchase  or  sale,  but  is  to  be  taken  with  the  incumbrances 
and  conditions  which  its  creators  imposed  upon  it.  Hence, 
a  provision  that  debts  due  other  members  shall  be  first  paid 
is  valid  and  must  be  carried  out.  In  Powell  v.  VValdron,^ 
Finch,  J.,  one  of  the  most  facile  writers  now  on  the  bench, 
said  :  "  Although  of  a  character  somewhat  peculiar,  its  use 
restricted,  its  range  of  purchasers  narrow,  and  its  ownership 
clogged  with  conditions,  it  was  nevertheless  a  valuable  right, 
capable  of  transfer  and  correctly  decided  to  be  property.  It 
was  something  more  than  a  mere  personal  license  or  privi- 
lege, for  it  could  pass  from  one  to  another  of  a  certain  class 
of  persons  and  belong  as  fully  to  the  assignee  as  it  did  to 
the  assignor.  That  characteristic  gave  it  not  only  value 
which  might  attach  to  a  bare  personal  privilege,  but  market 
value  which  usually  belongs  only  to  things  which  are  the 
subjects  of  sale.  However  it  differed  from  the  incorporeal 
rights  earlier  recognized  and  described,  it  possessed  the 
same  essential  characteristics.     It  could  be  transferred  from 


22  Alb.  L.  J.  70.     In  re  Gallagher,  19  Justice  Sharswood   participated,   it   is 

N.  B.  R.  224,  it   was  decided  that   a  said  :  "  The  seat  is  not  property  in  the 

license  or  permit  to  occupy  certain  stalls  eye  of  the  law,  it  could  not  be  seized  in 

in  Washington  Market,  New  York  City,  execution  for  the  debts  of  the  members." 

was  property  that  passed  to  an  assignee.  Again,  it  is   observed   in    Pancoast  v. 

But  In  re  Sutherland,  6  Bissell  526,  on  Gowen,  93  Pa.  St.  71 :  "A  seat  in  the 

the  contrary  maintains  that  a  right  of  board  of  brokers  is  not  property  subject 

membership  of  a  board  of  trade  does  to  execution  in  any  form.     It  is  a  mere 

notbecome  vested  in  an  assignee.  Com-  personal  privilege,  perhaps   more   ac- 

pare  Barry  v.  Kennedy,  1 1  Abb.  Pr.  N.  curately  a  license  to  buy  and  sell  at  the 

S.   (N.  Y.)  421.     It  seems  clear  that  meetings  of  the   board.     It    certainly 

the  seat  or  license  is  not  liable  to  legal  could  not  be  levied  on  and  sold  under 

proceedings  ow  fieri  facias  or  execu-  Sifi.fa."     There  is  a  tendency  in  these 

tion  ;  Eliot  v.  Merchants'  Exchange  of  cases  that  is  to  be  regretted. 

St.  Louis,  28  Alb.  L.J.  512.  In  Thomp-  '  94  U.  S.  524. 

son  v.  Adams,  93  Pa.  St.  55,  66,  in  a  -  89  N.  Y.  331. 
per  curiam  opinion  in  which  the  learned 


§   3^  TRADE-MARKS.  59 

hand  to  hand  and  all  the  time  keep  its  inherent  value,  and 
be  as  freely  and  fully  enjoyed  by  the  permitted  purchaser  as 
by  the  original  owner.  We  should  make  of  it  an  anomaly, 
difficult  to  deal  with  and  to  understand,  if  we  failed  to  treat 
it  as  property.  The  authorities  which  determine  it  to  be 
such,  seem  to  us  better  reasoned  and  more  wisely  consid- 
ered than  those  which  deny  to  it  that  character,  although 
the  subject  of  ownership,  of  use,  and  of  sale."  The  cases 
upon  this  subject  are  fully  reviewed  by  the  St.  Louis  Court 
of  Appeals,  in  Eliot  v.  Merchants'  Exchange  of  St.  Louis,^ 
and  the  court  in  conclusion  say  :  "  There  can  be  no  doubt 
that  the  weight  of  authority  is,  that  the  seat  of  a  member  in 
a  stock  board  or  merchants'  exchange  is  a  species  of  prop- 
erty not  subject  to  ordinary  execution,  but  which  may  be 
reached  by  equity  processes  in  such  a  way  as  to  respect  the 
rules  of  the  exchange  and  the  rights  of  all  parties  interested, 
and  at  the  same  time,  by  proceedings  in  aid  of  the  execu- 
tion, to  compel  an  insolvent  member  to  transfer  his  seat 
under  the  rules  of  the  board,  and  apply  the  proceeds  to  the 
satisfaction  of  the  debts  of  his  judgment-creditor." 

§  36.  Trade-marks. — It  seems  to  be  regarded  as  settled 
law  that  the  right  to  use  a  trade-mark,  in  connection  with 
the  business  in  which  it  has  been  used,  is  property  which 
will  be  protected  by  the  courts,  and  which  may  be  sold  and 
transferred.^  In  Sohier  v.  Johnson,^  the  right  to  use  a 
trade-mark  was  recognized  as  property  which  would  pass  to 
an  assignee,  as  an  incident  under  a  transfer  of  the  business 
and  good-will.^  The  same  principle  may  be  found  in  the 
English  law,  and  it  has  been  held  that  under  the  bankrupt 
law  a  trade-mark  passes  to  the  assignee  of  the  owner.^     It 

I  28  Alb.  L.  J.  512.  Trade-Mark  Cases,  100  U.  S.  82  ;  War- 

"  Warren  v.  Warren  Thread  Co.,  28  ren  v.  Warren  Thread  Co.,  28  Alb.  L. 

Alb.  L.  J.  278;  S.  C.  134  Mass.   247;  J.  278. 

Emerson    v.    Badger,    loi    Mass.   82 ;  '  Leather    Cloth   Co.    v.    American 

Oilman  v.  Hunnewell,  122  Mass.  139.  Cloth  Co.,  11   H.  L.  Cas.  523;  ^Totley 

^  III  Mass.  238.  V.  Downman,  3  Myl.  tSc  Cr.  i  ;  Hudson 

■•  Kidd  V.  Johnson,   100  U.  S.  617  ;  v.  Osborne,  39  L.  J.  Ch.  79. 


60  BOOK    ROYALTIES.  —  PATENT    RIGHTS.  §§  37,  38 

may  be  doubted  whether  mere  personal  trade-marks,  the 
use  of  whieh,  by  any  person  other  than  the  originator, 
would  operate  as  a  fraud  upon  the  public,  are  subject  to 
this  rule.  Where,  however,  the  trade-marks  are  mere  signs 
or  symbols  designating  the  place  or  the  establishment  at 
which  the  goods  are  manufactured,  and  not  implying  any 
peculiar  skill  in  the  originator  as  the  manufacturer,  or  im- 
porting necessarily  that  the  goods  are  manufactured  by  him, 
they  constitute  property  and  pass  to  an  insolvent  assignee.^ 

§  zi-  Reaching  book  royalties. — An  instructive  case,  illus- 
trative of  the  nature  of  creditors'  remedies,  is  Lord  v. 
Harte.^  The  plaintiff  was  a  judgment-creditor  of  Bret 
Harte,  the  well-known  writer  of  prose  and  poetry,  and  the 
bill  in  question  was  filed,  under  the  General  Statutes  of 
Massachusetts,^  against  Harte  and  his  publishers,  to  reach 
moneys  due  or  that  might  thereafter  accrue  to  him  for 
royalties  upon  books  sold  by  the  publishers.  Devens,  J., 
after  observing  that  the  defendant  Harte  had  a  valuable 
interest  under  an  existing  contract  which  could  not  be 
attached,  said  :  "  Any  remedy  which  the  plaintiffs  may  have 
by  the  trustee  process,  and  no  other  is  suggested,  is  uncer- 
tain, doubtful,  and  inadequate,  and  there  is  therefore  pre- 
sented a  case  for  relief  by  this  bill."  ^ 

§  38.  Patent  rights. — The  monopoly  which  a  patent  con- 
fers is  considered  as  property  ;  ^  the  interest  of  the  patentee 

'  Warren  v.  Warren  Thread  Co.,  134  is  transferred  is  considered  as  only  in- 
Mass.  247.     In  Kidd  v.  Johnson,  100  dicating  that  the  goods  to  which  it  is 
U.  S.  617,  the  court  said:  "When  the  affixed  are  manufactured  at  the  same 
trade-mark  is  affixed  to  articles  manu-  place  and  are  of  the  same  character  as 
factured  at  a  particular  establishment  those  to  which  the  mark  was  attached 
and   acquires   a  special  reputation  in  by  its  original  designer."     See  Trade- 
connection  with  the  place  of  manufac-  Mark  Cases,  100  U.  S.  82  ;  Royal  Bak- 
ture,  and  that  establishment  is  trans-  ing  Powder  Co.  v.  Sherrell,  93  N.  Y. 
ferred  either  by  contract  or  operation  334. 
of  law  to  others,  the  right  to  the  use  of  -118  Mass.  271. 
the  trade-mark  may  be  lawfully  trans-  ^  Gen.  Sts.  c.  113,  §2. 
ferred  with  it.     Its  subsequent  use  by  •*  See  Stephens  v.  Cady,  14  How.  531. 
the  person  to  whom  the  establishment  ^  Gayler  v.  Wilder,  10  How.  477,  per 


§  3^  PATENT    RIGHTS.  6 1 

may  be  assigned  by  operation  of  law  in  case  of  bankruptcy 
of  the  patentee/  and  it  may  be  subjected  by  a  bill  in  equity 
to  the  payment  of  his  judgment-debts. '^  Lord  Alvanley,  re- 
ferring to  the  proposition  that  an  invention  was  an  idea  or 
scheme  in  a  man's  head,  which  could  not  be  reached  by  pro- 
cess of  law,  said:  "  But  if  an  inventor  avail  himself  of  his 
knowledge  and  skill,  and  thereby  acquire  a  beneficial  inter- 
est, which  may  be  the  subject  of  assignment,  I  cannot  frame 
to  myself  an  argument  why  that  interest  should  not  pass  in 
the  same  manner  as  any  other  property  acquired  by  his  per- 
sonal industry."^  And  in  Stephens  v.  Cady,*  Justice  Nel- 
son said  in  relation  to  the  incorporeal  right  secured  by  the 
statute  to  an  author  to  multiply  copies  of  a  map  by  the  use 
of  a  plate,  that,  though  from  its  intangible  character  it  was 
not  the  subject  of  seizure  or  sale  at  common  law,  it  could 
be  reached  by  a  creditor's  bill,  and  applied  to  the  payment 
of  the  author's  debts.^  If  the  courts  should  declare  patent 
rights  exempt  from  appropriation  it  would,  as  suggested  in 
Sawin  v.  Guild, ^  be  practicable  for  a  debtor  to  lock  up  his 
whole  property,  however  ample,  from  the  grasp  of  his 
creditors,  by  investing  it  in  profitable  patent  rights,  and 
thus  to  defeat  the  administration  of  justice.'^  We  find  the 
statement,  however,  that  it  is  the  patent  only  which  gives 
the  exclusive  property,  and  while  the  right  is  inchoate  it  is 


Taney,  Chief-Justice;  Ager  v.  Murray,  Gillette  v.  Bate,  lo  Abb.  N.  C.  (N.  Y.) 

105  U.  S.  126;  Barnes  v,  Morgan,  3  88;  Gorrell  v.  Dickson,  26  Fed.  Rep. 

Hun  (N.  Y.)  704.     See  Railroad  Co.  v.  454.     But  see  Greene  v.  Keene,  14  R. 

Trimble,  10  Wall.  367.  I.  388. 

'  Hesse  v.  Stevenson,  3  Bos.  &  P.  ^  Hesse  v.  Stevenson,  3  Bos.  &  P.  565. 

565  ;  Bloxam  v.  Elsee,  i  Car.  &  P.  558 ;  ••  14  How.  531. 

S.  C.  6  Barn.  &  C.  169;  Mavvman  v.  "See  Hadden  v.  Spader.  20  Johns. 

Tegg,  2  Russ.  385;  Edelsten  v.  Vick,  (N.  Y.)  554;  Gillette  v.  Bate,  86  N.  Y. 

II  Hare  78.     But  compare  Ashcroft  v.  87  ;  Pacific  Bank  v.  Robinson,  57  Cal. 

Walworth,  i   Holmes  152;  Gordon  v.  520;  Stevens  v.  Ciladding,  17  How.  447  ; 

Anthony,   16  Blatchf.  234;   Carver  v.  Massie  v.  Watts.  6  Cranch  148;  Storm 

Peck,  131  Mass.  291  ;  Cooper  v.  Gunn,  v.  Waddeil,  2  Sandl".  Ch.  (N.  Y.)  494. 

4   B.  Mon.   (Ky.)    594.     See  Ager  v.  *  I  Gall.  485. 

Murray,  105  U.  S.  126.  '  See  Barnes  v.  Morgan.  3  Hun  (N. 

-Ager  V.   Murray,    105   U.   S.    126;  Y.)  704. 


62  POWERS.  §  39 

at  least  doubtful  whether  it  has  the  characteristics  of  prop- 
erty, such  as  to  justify  a  compulsory  transfer  by  the  debtor.^ 

§  39.  Powers,  when  assets  for  creditors. — Chief- Justice 
Gray,  in  delivering  the  opinion  of  the  Supreme  Judicial 
Court  of  Massachusetts,^  said  :  "  It  was  settled  in  the  Eng- 
lish Court  of  Chancery,  before  the  middle  of  the  last  cen- 
tury, that  where  a  person  has  a  general  power  of  appoint- 
ment, either  by  deed  or  by  will,  and  executes  this  power, 
the  property  appointed  is  deemed  in  equity  part  of  his 
assets,  and  subject  to  the  demands  of  his  creditors  in  pref- 
erence to  the  claims  of  his  voluntary  appointees  or  legatees. 
The  rule  perhaps  had  its  origin  in  a  decree  of  Lord  Somers, 
affirmed  by  the  House  of  Lords,  in  a  case  in  which  the 
person  executing  the  power  had  in  effect  reserved  the 
power  to  himself  in  granting  away  the  estate.^  But  Lord 
Hardwicke  repeatedly  applied  it  to  cases  of  the  execution 
of  a  general  power  of  appointment  by  will  of  property  of 
which  the  donee  had  never  had  any  ownership  or  control 
during  his  life  ;  and,  while  recognizing  the  logical  difficulty 
that  the  power,  when  executed,  took  effect  as  an  appoint- 
ment, not  of  the  testator's  own  assets,  but  of  the  estate  of 
the  donor  of  the  power,  said  that  the  previous  cases  before 
Lord  Talbot  and  himself  (of  which  very  meagre  and  im- 
perfect reports  have  come  down  to  us)  had  established  the 
doctrine,  that  when  there  was  a  general  power  of  appoint- 
ment, which  it  was  absolutely  in  the  donee's  pleasure  to 
execute  or  not,  he  might  do  it  for  any  purpose  whatever, 
and  might  appoint  the  money  to  be  paid  to  his  executors 
if  he  pleased,  and,  if  he  executed  it  voluntarily  and  without 
consideration,  for  the  benefit  of  third  persons,  the  money 


'  Gillette  v.  Bate,  86  N.  Y.  94;  Hesse  41  N.  Y.  Superior  530  ;  Potter  v.  Hol- 

V.  Stevenson,  3  Bos.  &  P.  565.    Com-  land,  4  Blatchf.  206  ;  Barnes  v.  Mor- 

pare  Ashcroft  v.  Walworth,  i  Holmes  gan,  3  Hun  (N.  Y.)  703. 

152;  Campbell  v.  James,    18  Blatchf.  -  Clapp  v.  Ingraham,  126  Mass.  200. 

92;   Prime  v.  Brandon    Mfg.  Co.,   16  ^  Thompson  v.  Towne,  Prec.  Ch.  52  ; 

Blatch.  453;  Clan  Ranald  v.  Wyckoff,  S.  c.  2  Vem.  319. 


§  39  POWERS.  63 

should  be  considered  part  of  his  assets,  and  his  creditors 
should  have  the  benefit  of  it.^  The  doctrine  has  been  up- 
held to  the  full  extent  in  Encrland  ever  since.^  Althouirh 
the  soundness  of  the  reasons  on  which  the  doctrine  rests 
has  been  impugned  by  Chief-Justice  Gibson,  argiiciido, 
and  doubted  by  Mr.  Justice  Story  in  his  Commentaries, 
the  doctrine  is  stated  both  by  Judge  Story  and  Chancellor 
Kent  as  well  settled  ;  and  it  has  been  affirmed  by  the  high- 
est court  of  New  Hampshire,  in  a  very  able  judgment,  de- 
livered by  Chief-Justice  Parker,  and  applied  to  a  case  in 
which  a  testator  devised  property  in  trust  to  pay  such  part 
of  the  income  as  the  trustees  should  think  proper  to  his 
son  for  life  ;  and  after  the  son's  death,  to  make  over  the 
principal,  with  any  accumulated  income,  to  such  persons  as 
the  son  should  by  will  direct.^  A  doctrine  so  just  and 
equitable  in  its  operation,  clearly  established  by  the  laws  of 
England  before  our  Revolution,  and  supported  by  such  a 
weight  of  authority,  cannot  be  set  aside  by  a  court  of 
chancery  because  of  doubts  of  the  technical  soundness  of 
the  reasons  on  which  it  was  originally  established."  Cases 
establishing  this  general  rule  are  numerous.*  T\\q  jus  dis- 
ponendi  is  to  be  considered  as  the  property  itself,'^  and  the 

*  Townshend   v.   Windham,   2  Ves.  v.  Cutting,  86  N.  Y.   522)  ;   2  Chance 

Sen.  r,  9,  10;  jG'jt /ar/t' Caswall,  i  Atk.  on    Powers,    §1817;    Whittington    v. 

559,560;  Bainton  V.  Ward,  7  Ves.  503,  Jennings,  6  Simons  493;    Lassells  v. 

note;    S.  C.  cited  2  Ves.  Sen.  2,  and  Cornwallis,  2  Vern.  465;    Bainton   v. 

Belt's  Suppl't  243  ;  2  Atk.  172  ;  Pack  Ward,  2  Atk.  172  ;  Pack  v.  Bathurst,  3 

V.  Bathurst,  3  Atk.  269.  Atk.  269;  Troughton  v.  Troughton,  3 

■■'  Chance  on   Powers,  c.  15,  §  2  ;   2  Atk.  656  ;  Townshend  v.  Windham,  2 

Sugden  on  Powers  (7th  ed.)  27  ;  Flem-  Ves.  Sen.   i  ;    Jenney   v.   Andrews,  6 

ing  V.  Buchanan,  3  De  G.,  M.  &  G.  976.  Madd.    264  ;    Ashficld   v.    Ashfield,    2 

3  Commonwealth  v.  Duffield,  1 2  Penn.  Vern.  287  ;  Cutting  v.  Cutting.  20  Hun 

St.    277,    279-281;    Story's    Eq.    Jur.  (N.  Y.)  366  ;  revised,  in  part,  in  86  N. 

§  176,  and  note;  4  Kent's  Coin.  339,  Y.  522;  George  v.  Milhanke,  9  Ves.  Jr. 

340;   Johnson  v.   Gushing,   15   N.  H.  196;   Fleming  v.  Buchanan.  3  Dc  G, 

298.  M.  tS:  G.  976  ;  Palmer  v.  Whitmorc,  2 

'^  Smith  V.  Garey,  2  Dev.  &  Bat.  Eq.  Cr.  &  M.  [in  note]  131 ;  Nail  v.  Punter. 

(N.  C.)  49;    Mackason's    Appeal,   42  5  Sim.  555. 

Pa.    St.    338;    Tallmadge   v.    Sill,    21         'Holmes   v.   Coghill,    12    Ves.    206. 

Barb.  (N.  Y.)  51  (but  compare  Cutting  See  Piatt  v.  Routh,  3  Beav.  257. 


64 


POWERS    IN    NEW    YORK. 


§  40 


general  power  of  disposition  is  in  effect  property.^  In 
Williams  v.  Lomas,^  the  court  said  :  "  Jenney  v.  Andrews,^ 
which  has  been  followed  by  other  authorities,^  decides  this : 
that  where  a  person  having  a  general  power  of  appointment 
by  will  makes  an  appointment,  the  appointee  is  a  trustee 
for  the  creditors,  and  the  appointed  fund  is  applicable  to  the 
payment  of  the  debts  of  the  donee  of  the  power."  And  it 
has  been  observed  that  there  is  no  reason  in  the  nature  of 
things  why  a  gift  or  bequest  of  personal  property,  with  a 
power  of  disposition,  should  not  be  measured  by  the  same 
rule  as  a  grant  or  devise  of  real  estate  with  the  same 
power.^ 

§  40.  Statutory  change  as  to  powers  in  New  York. — The 
principle  which  we  have  been  considering  did  not  meet  the 
entire  favor  of  the  revisers  of  the  Statutes  of  New  York, 
and  the  rule  just  laid  down  seems  to  have  been  practically 


1  Bainton  v.  Ward,  2  Atk.  172.  See 
Adams  on  Equity,  99,  note  i.  Mr. 
May  says  :  "  The  exercise  of  a  general 
power  of  appointment,  either  of  land 
(Townshend  v.  Windham,  2  Ves.  Sr.  i), 
or  a  sum  of  money  (Pack  v.  Bathurst, 
3  Atk.  269),  may  be  fraudulent  and 
void  under  the  statute,  but  where  a 
man  has  only  a  limited  or  exclusive 
power  of  appointment  of  course  it  is 
different.  He  never  had  any  interest 
in  the  property  himself  which  could 
have  been  available  to  a  creditor,  or 
by  which  he  could  have  obtained  cred- 
it." May  on  Fraud.  Conv.,  p.  29.  See 
Sims  V.  Thomas,  12  Ad.  &  E.  536; 
Hockley  v.  Mawbey,  i  Ves.  Jr.  143, 
150. 

'•*  16  Beav.  3. 

8  6  Madd.  264. 

*  2  Sugden  on  Powers  (6th  ed.),  29; 
I  Sugden  on  Powers  (6th  ed.),  123. 

'  Cutting  V.  Cutting,  86  N.  Y.  547 ; 
S.  p.  Hutton  V.  Benkard,  92  N.  Y.  295. 
The  reservation  of  a  power  of  revoca- 


tion or  appointment  to  other  uses  does 
not  affect  the  validity  of  a  conveyance 
until  the  power  is  exercised,  nor  does 
it  tend  to  create  an  imputation  of  bad 
faith  in  the  transaction.  See  Huguenin 
v.  Baseley,  14  Ves,  273 ;  Coutts  v.  Ac- 
worth,  L.  R.  8  Eq.  558  ;  Wollaston  v. 
Tribe,  L,  R.  9  Eq.  44;  Everitt  v. 
Everitt,  L.  R.  10  Eq.  405 ;  Hall  v. 
Hall,  L.  R.  14  Eq.  365;  Phillips  v. 
Mullings,  L.  R.  7  Ch.  App.  244;  Hall 
V.  Hall,  L.  R.  8  Ch.  App.  430; 
Toker  v.  Toker,  3  De  G.,  J.  &  S.  487. 
The  power  is  not  an  interest  in  the 
property  which  can  be  transferred  to 
another,  or  sold  on  execution,  or  de- 
vised by  will.  The  grantor  could  exer- 
cise the  power  either  by  deed  or  will, 
but  he  could  not  vest  the  power  in 
any  other  person  to  be  thus  executed. 
Nor  is  the  power  a  chose  in  action  ; 
nor  does  it  constitute  assets  of  a  bank- 
rupt which  will  vest  in  an  assignee. 
Jones  v.  Clifton,  loi  U.  S.  225,  per 
Field,  J. 


§  41  GIFTS.  65 

overturned  by  statute  in  that  State.'  The  facts  in  Cutting 
V.  Cutting,  a  case  in  which  the  statutes  relating  to  the  abo- 
lition of  powers  in  New  York  were  construed,  was  as  fol- 
lows :  C.  gave  real  and  personal  estate  to  her  executor  to 
collect  the  income  during  the  life  of  her  son  and  apply  it 
to  his  use,  and  after  his  death  to  transfer  the  estate  to  the 
person  the  son  might  designate  by  will.  The  son  having 
made  the  appointment,  it  was  held  that  the  estate  was  not 
chargeable  after  the  son's  death  with  a  judgment  obtained 
against  him  in  his  lifetime.  It  will  be  apparent  at  a  glance 
that  the  result  of  the  legislation  in  New  York  as  inter- 
preted in  this  case,  constitutes  an  important  innovation 
upon  what  was  a  settled  principle  of  equity,  and  places  be- 
yond the  reach  of  creditors  property  which  equity  con- 
sidered should  be  subject  to  their  remedies.^  A  policv 
which  enables  debtors  to  contract  obligations,  and  defeat 
their  payment  by  exercising  a  power  of  appointment  in 
favor  of  a  gratuitous  appointee,  deprives  creditors  of  an  im- 
portant source  of  relief,  and  tends  to  establish  in  the  debtor 
rights  over  property  which  the  creditor  cannot  reach,  a  re- 
sult to  be  universally  deplored. 

§  41.  Gifts  of  small  value. — The  Supreme  Court  of  Maine  ' 
recognize  the  rule  already  adverted  to  that  gifts  cannot  be 
regarded  as  fraudulent  if,  from  their  almost  infinitesimal 
value,  the  rights  of  creditors  would  not  be  impaired.  In 
French  v.  Holmes,*  it  appeared  that  the  father  made  a  gift 
to  his  child  of  a  lamb  which  the  ewe  refused  to  recognize. 
The  court  observed  that  if  the  lamb  had  been  attached  it 
would  not  have  sold  for  a  sum  sufficient  to  pay  the  fees  of 
the  officer  making  the  sale,  much  less  the  costs  of  obtaining 
the  judgment.  If  the  property  was  exempt  the  gift  was 
clearly  no  interference  with  the  rights  of  creditors.     The 


1  Cutting  V.  Cutting,  20  Hun  (N.  Y.)        ^  French  v.  Holmes,  67  Me.  193. 
367  ;  s.  c.  on  appeal,  86  N.  Y.  537.  ^  67  Me.  193. 

'■'  See  §  39,  and  cases  cited. 
5 


66  DEBTS  FORGIVEN  OR  CANCELLED.         §  42 


court  further  argued  :  "  Now  could  such  a  gift  hinder,  de- 
lay, or  defraud  creditors  ?  The  fraudulent  intent  is  to  be 
collected  from  the  comparative  value  and  magnitude  of  the 
gift.  Can  any  one  believe  the  existence  of  a  fraudulent  in- 
tent?" The  opinion  cited  with  approval  Hopkirk  v.  Ran- 
dolph,^ where  the  gift  consisted  of  two  negro  girls  and  a 
riding  horse.  The  learned  Chief-Justice  Marshall  in  that 
case  seemed  to  consider  that  trivial  gifts,  made  without  any 
view  to  harm  creditors,  and  with  intentions  obviously  fair 
and  proper,  ought  to  be  exempted  from  the  general  rule  in 
favor  of  creditors.  "  They  do  not,"  continued  the  Chief- 
Justice,  "  much  differ  from  wedding  clothes,  if  rather  more 
expensive  than  usual,  from  jewels,  or  an  instrument  of 
music,  given  by  a  man  whose  circumstances  justified  the 
gift.  I  have  never  known  a  case  in  which  such  gifts  so 
made  have  been  called  into  question."^ 

§  42.  Debts  forgiven  or  cancelled. — In  Sibthorp  v.  Moxom,'^ 
it  was  said  that  where  a  testator  gave  or  forgave  a  debt  this 
was  a  testamentary  act,  and  would  not  be  good  as  against 
creditors.^  And  a  cancellation  by  an  insolvent  of  a  live  and 
subsisting  asset,  is  a  fraud  upon  creditors.  Hence,  where  a 
debtor  gave  up  and  cancelled  without  payment,  a  note  held 
by  him  against  a  third  party,  the  court  very  promptly  de- 
cided that  after  the  debtor's  decease  his  administrator  might 
ignore  the  cancellation,  and  sue  upon  the  note  for  the  bene- 
fit of  creditors.^  Martin  v.  Root^  is  a  pointed  illustration 
of  a  different  phase  of  this  doctrine.  One  Larned  conveyed 
a  farm  to  Root  and  others,  and  furnished  the  grantees  the 
means  with  which  to  remove  the  incumbrances  upon  it,  the 


'  2  Brock,  140.  of  cancellation  Martin  v.  Root,  17  Mass. 

^  See  Patridge  v.  Gopp,  Amb.   596.  222,  per  Chief-Justice  Parker ;  McGay 

Compare  Hanby  V.  Logan,  i  Duv.  (Ky.)  v.  Keiiback,  14  Abb.  Pr.  (N.  Y.)  142  ; 

242  ;  Garrison  v.  Monaghan,  33  Pa.  St.  Wise  v.  Tripp,  13  Me.  12. 
232.     See  §§  15,  23,  and  note.  ^  Tolman  v.  Marlborough,  3  N.  H. 

=*  3  Atkyns  581,  57. 

*  Compare,  generally  as  to  the  effect        ^  17  Mass.  222. 


§  43  PROMISES    OF    THIRD    PARTIES.  67 

conceded  object  of  the  transaction  being  to  keep  the  farm 
out  of  the  reach  of  Larned's  creditors.  Root  iravc  Larned 
a  note  for  $5,072.43,  and  at  the  same  time  took  back  a  writ- 
ten promise  from  Larned  that  the  note  should  never  be 
collected.  Larned  having  died  insolvent,  his  administrator 
was  allowed  to  recover  on  the  note,  and  the  agreement  that 
the  note  should  not  be  collected  was  held  void  in  respect 
to  creditors. 

§  43.  Enforcing  promises  of  third  parties.  —  The  doctrine 
of  Lawrence  v.  P'ox,^  and  cases  embodying  the  general 
principle  that  where  one  person  for  a  valuable  considera- 
tion engages  with  another,  by  a  simple  contract,  to  do  some 
act  for  the  benefit  of  a  third  person,  the  latter,  who  would 
enjoy  the  benefit  of  the  act  if  performed,  may  maintain  an 
action  for  breach  of  the  engagement,^  has  been  successfully 
invoked  in  aid  of  creditors.  Thus  in  Kingsbury  v.  Earle,^ 
it  appeared  that  a  father  had  conveyed  lands  to  his  sons 
upon  their  orally  agreeing,  in  consideration  of  the  convey- 
ance, to  pay  all  his  debts.  The  court  held  that  the  credit- 
ors might  avail  themselves  of  the  agreement,  and  bring  ac- 
tions on  the  promise  against  the  sons  to  recover  debts,  even 
though  the  amount  exceeded  the  value  of  the  land,  and  that 
the  consideration  named  in  the  deed  would  not  determine 


'  20  N.  Y.  268.     See  Prime  V.  Koeh-  Scott   v.  Gill,    19    Iowa  187;  Rice   v. 

ler,  yy  N.  Y.  91.  Savery,    22  Iowa  470;    Devol  v.  Mc- 

-  Hand  v.   Kennedy,  83  N.  Y.  154;  Intosh,  23  Ind.  529;  Allen  v.  Thomas. 

Burr  V.  Beers,  24  N.  Y.  178  ;  Glen  v.  3  Met.  (Ky.)  198  ;   Jordan  v.  White,  20 

Hope  Mutual  Life  Ins.  Co.,  56  N.  Y.  Minn.  91  ;  Rogers  v.  Gosnell,  58  Mo. 

381;    Ricard  v.  Sanderson,  41   N.  Y.  590;  Wiggins   v.  McDonald,    iS   Cal. 

179;  Secor  V.  Lord,  3  Keyes  (N.  Y.)  126;  Miller  v.  Florer,  15  Ohio  St.  151  ; 

525  ;  Thorp  v.  Keokuk  Coal  Co.,  48  N.  Green  v.  Richardson,  4  Col.  5M4  ;  Bank 

Y.  253  ;  Campbell  v.  Smith,  71   N.  Y.  of  the   Metropolis   v.    Guttscldick,    14 

26;  Van  Schaick  v.  Third  Ave.  R.R.  Peters  31  ;  Bradwell  v.  Weeks,  J  Johns. 

Co.,  38  N.  Y.  346;  Coster  v.  Mayor,  Ch.  (N.  Y.)  206.     Compare /Etna  Nat. 

etc.,  43  N.  Y.  41 1  ;  Barker  v.  Bradley,  Bank  v.  Fourth  Nat.  Bank,  46  N.  Y.  82  ; 

42  N.  Y.  319;  Vrooman  v.  Turner,  69  Bean  v.  Edge.  84  N.  Y.  514;   Simson 

N.  Y.  284;  Garnsey  v.  Rogers,  47  N.  v.  Brown,  68  N.  Y.  355  ;    Belknap  v. 

Y.   236;    Hall  V.    Marston,    17   Mass.  Bender,  75  N.  Y.  449. 
575;  Cross  V.  Truesdaie,  28  Ind.  44;         •  27  Hun  (N.  Y.)  141. 


68  PROMISES    OF   THIRD    PARTIES.  §  43 

its  actual  value.  An  agreement  of  this  character  is  not  a 
promise  to  pay  the  debt  of  another  within  the  statute  of 
frauds.  And  where  partnership  assets  are  assigned,  and  as 
part  of  the  consideration  the  purchaser  agreed  to  pay  the 
firm  debts,  any  creditor  may  avail  himself  of  the  promise 
and  sue  the  purchaser  for  the  amount  of  his  claim  ;  ^  and  if, 
under  such  circumstances,  a  bond  is  taken,  the  creditors 
may  get  the  benefit  of  it.^  But  the  principle  running 
through  these  cases  is  not  universally  recognized.  It  does 
not  fully  obtain  in  the  English  cases  or  in  Massachusetts. 
In  the  latter  Commonwealth,  Gray,  J.,  in  the  course  of  an 
opinion,  said  :  "The  general  rule  of  law  is,  that  a  person 
who  is  not  a  party  to  a  simple  contract,  and  from  whom  no 
consideration  moves,  cannot  sue  on  the  contract,  and  con- 
sequently that  a  promise  made  by  one  person  to  another, 
for  the  benefit  of  a  third  person  who  is  a  stranger  to  the 
consideration,  will  not  support  an  action  by  the  latter."^  It 
is  foreign  to  the  scope  of  this  treatise  to  fully  discuss  in  all 
its  bearings  the  rule  allowing  third  parties  to  enforce  these 
promises  made  for  their  benefit.  It  certainly  has  obtained 
a  deep  foundation  in  our  law  ;  its  operation  avoids  circuity 
of  action,  reduces  the  expense  and  volume  of  litigation,  and 
brings  the  real  claimant  and  party  beneficially  interested  in 
the  controversy  before  the  court.  The  arguments  against 
its  adoption,  based  upon  common-law  rules,. are  inequitable 
and  technical,  and  lead  to  a  harsh  result* 


'  Sanders  v.  Clason,  13  Minn.  379  ;  appointed  at  the  instance   of  another 

Barlow   v.  Myers,  6  T.  &  C.  (N.  Y.)  creditor.     The  sheriff  released  the  levy 

183  ;  Meyer  v.  Lowell,  44  Mo.  328.  upon  receiving  a  promise  from  the  re- 

-  Kimball  v.   Noyes,    17    Wis.    695;  ceiver  that  the   latter  would   sell  the 

Devol  V.  Mcintosh,  23  Ind.  529.  Espe-  property  and  apply  the  proceeds  upon 

cially  Claflin  v.  Ostrom,  54  N.  Y.  581.  the  plaintiff's  execution.     The  receiver 

^Exchange    Bank   of    St.   Louis  v.  realized  on  the  sale.    The  plaintiff  in  the 

Rice,  107  Mass.  41.  execution  brought  this  action   against 

"■In    Becker  v.  Torrance,  31  N.  Y.  the  receiver  on  the  parol  promise  made 

631-643,  it  appeared  that  the  plaintiff  to  the  sheriff  for  plaintiff 's  benefit.  The 

had  levied  upon  certain  property  of  the  court  decided  that  although  the  promise 

defendant ;  subsequently  a  receiver  was  was  not  made  to  the  plaintiff  directly,  it 


§  44  TRACING    THE    FUND.  69 

§  44.  Tracing  the  fund. — It  is  a  clearly  established  prin- 
ciple in  equity  jurisprudence  that  whenever  a  trustee  has 
been  guilty  of  a  breach  of  trust,  and  has  transferred  the 
property  by  sale  or  otherwise  to  any  third  person,  the  cestui 
que  trust  has  a  full  right  to  follow  such  property  into  the 
hands  of  the  third  person,  unless  the  latter  stands  in  the 
position  of  a  ho7ia  fide  purchaser  for  valuable  consideration 
without  notice ;  and  if  the  trustee  has  invested  the  trust 
property  or  its  proceeds  in  any  other  property  into  which 
it  can  be  distinctly  traced,  the  cesttii  que  trtcst  may  follow 
it  into  the  new  investment.^  This  doctrine  has  been  ap- 
propriated and  applied  to  cases  of  property  alienated  in 
fraud  of  creditors  ;  and  it  has  been  expressly  held  that  a 
complaining  creditor  has  a  right  to  follow  the  fund  result- 
ing from  the  covinous  alienation,  into  any  property  in  which 
it  was  invested,  so  far  as  it  can  be  traced.'  But  in  creditors' 
suits  the  subject-matter  of  pursuit  should  be  something  so 
specific  that,  as  to  it,"  either  in  law  or  in  equity,  the  plaintiff's 
judgment  or  execution,  or  the  filing  of  the  bill,  or  the  ap- 
pointment of  a  receiver,  will  create  a  lien  or  make  a  title.' 
In  Gillette  v.  Bate,*  the  fraudulent  grantee  had  taken  stock 
in  a  corporation  in  exchange  for  the  property  frautUilcnth- 
transferred,  and  it  was  held  that  creditors  could  reach  the 
stock,  although  it  had  increased  in  value.^ 

was  available  to  him  on  the  principle  696;  Farmers'  &  Mechanics'  Nat.  Bk. 

of  Lawrence  v.  Fox,  20  N.  Y.  268,  and  v.  King,  57  Pa.  St.  202.   Compare  Smith 

Burr  V.  Beers,  24  N.  Y.  178,  and  that  v.    Bowen,    35    N.    Y.    83;    Lyford    v. 

he  had  the  right  to  adopt  and  enforce  Thurston,  16  N.  H.  399  ;   Barr  v.  Cub- 

the  promise  instead  of  proceeding  di-  bage,  52  Mo.  404 ;  Hooley  v.  Gieve.  9 

rectly  against  the  sheriff.  Abb.  N.  C.  (N.  Y.)  8.     See  §  28.     Ex- 

'  Oliver  v.  Piatt,  3  How.  401  ;  Mc-  amine  especially  National  Bank  v.  In- 

Leod  v.  First  Nat.  Bk.,  42  Miss.  99  ;  surance  Co.,  104  U.  S.  54. 

Jones  v.  Shaddock,  41  Ala.  262;   La-  "  Clements  v.  Moore,  6  Wall.  315.316. 

throp  v.  Bampton,  31  Cal.  17;  Story's  See  Chalfont  v.  Grant,  i  Am.  Insolv.  R. 

Eq.  Jur.  §  1258  ;  Mansell  v.  Mansell,  2  251;  Marsh  v.  Burroughs,  i  Woods  463. 

P.  Wms.  679  ;  Dewey  v.  Kelton,  18  N.  ^  Ogden  v.  Wood,  51   How.  Pr.  (N. 

B.  R.  218  ;  Pennell  v.  Ueffell,  4  De  G.,  Y.)  375.     See  §  28. 

M.  &  G.  372  ;  Frith  v.  Cartland.  2  Hem.  ^  10  Abb.  N.  C.  (N.  Y.)  92. 

&  M.  417,  420;  In  re  Hallet's  Estate,  ••  See  Steere  v.  Hoagland,  50  III.  377. 

Knatchbull  v.  Hallet,  L.  R.  13  Ch.  D.  Compare  Phipps  v.Sedgwick,95  U.  S.3. 


70  INCOME  OF  TRUST  ESTATE.  §  45 

§  45.  Income  of  trust  estate. — Williams  v.  Thorn  ^  firmly 
establishes  the  doctrine,  in  New  York  State  at  least,  that 
the  income  of  a  trust  fund  enjoyed  by  the  debtor  beyond 
a  sum  considered  necessary  for  his  actual  support,  may  be 
reached  by  judgment-creditors,  and,  like  the  rest  of  the 
debtor's  estate,  such  surplus  income  goes  to  make  up  the 
trust  fund  for  the  payment  of  creditors.  This  doctrine  was 
not  established  without  a  struggle,  and  debtors  are  con- 
stantly seeking  to  circumvent  it.^  The  Chancellor  observed 
in  Hallett  v.  Thompson,^  that  it  was  contrary  to  sound 
policy  to  permit  a  person  to  have  the  ownership  of  prop- 
erty for  his  own  purposes,  and  be  able  at  the  same  time  to 
keep  it  from  his  creditors.  In  Williams  v.  Thorn  '^  the  late 
lamented  Rapallo,  J.,  said:  "  By  the  analogy  which  courts 
of  justice  have  always  endeavored  to  preserve  between 
estates  or  interests  in  land,  or  the  income  thereof,  and  simi- 
lar interests  in  personal  property,  the  right  of  a  judgment- 
creditor  to  reach  the  surplus  rents  and  profits  of  land,  be- 
yond what  is  necessary  for  the  support  and  maintenance  of 
the  debtor  and  his  family,  entitles  him  to  maintain  a  credit- 
or's bill  which  will  reach  a  similar  interest  of  the  debtor  in 
the  surplus  income  of  personal  property  held  by  another  for 
his  use  and  benefit ;  but  not  that  part  of  the  income  which 
may  be  necessary  for  the  support  of  the  judgment-debtor." 
The  doctrine  of  Williams  v.  Thorn,  with  reference  to  reach- 
ing surplus  trust  income  seems  to  have  been  acknowledged 
in  the  earlier  New  York  cases,  both  as  to  the  income  of 
realty  and  personalty  ^  though  there  is  a  dictum  by  Wright, 
J.,  in  Campbell  v.  Foster,^  denying  that  the  income  of  the 


'  70  N.  Y.  270.     See  McEvoy  v.  Ap-  =  5  Paige  (N.  Y.)  5S6. 

pleby,  27  Hun  (N.  Y.)  44;  Tolles  v.  ■*  70  N.  Y.  273. 

Wood,  99  N.  Y.  616.    Compare  Spindle  ^  See  Rider  v.  Mason,  4  Sandf.  Ch. 

V.  Siireve,  in  U.  S.   546  ;  Nichols  v.  (N.  Y.)  351;  Sillick  v.  Mason,  2  Barb. 

Eaton,  91  U.  S.  716;  Cutting  v.  Cut-  Ch,  (N.  Y.)  79;  Bramhall  v.  Ferris,  14 

ting,  86  JnT.  Y.  546.  N.  Y.  41  ;  Scott  v.  Nevius,  6  Duer  (N. 

''■  See  Nichols  v.  Eaton,  91  U.  S.  716 ;  Y.)  672  ;  Graff  v.  Bonnett,  31  N.  Y.  9. 

also  Chap.  XXIII.  •*  35  N.  Y.  361. 


§  46  RULE    AS    TO    EXEMPT    PROPERTY.  7 1 

cestui  que  trust  can  be  diverted  to  creditors.^  The  confu- 
sion introduced  into  this  branch  of  the  law  which  led  to  the 
general  but  erroneous  belief  that  a  debtor's  trust  income, 
though  fabulous  in  amount,  was  not  in  any  form  available 
to  creditors,  was  partially  attributable  to  the  fact  that  the 
unsuccessful  actions  had  been  instituted  by  receivers  in 
supplementary  proceedings,  as  to  whom  the  courts  held  the 
right  to  reach  income  did  not  pass  until  it  had  actually 
accumulated.'  But  where  the  judgment-creditor  sues,  not 
only  the  income  accumulated  in  the  trustees'  hands,  which 
may  also  be  reached  by  supplementary  proceedings,  but  the 
future  income,  above  the  sum  found  necessary  for  the  sup- 
port and  use  of  the  cestui  que  trust,  may  be  impounded. 
Hann  v.  Van  Voorhis,'^  holding  that  only  actual  accumula- 
tions in  the  hands  of  the  trustees  could  be  reached,  must 
be  regarded  as  overruled  by  Williams  v.  Thorn.*  A  creditor, 
it  may  be  noted,  may  also  get  the  benefit  of  an  annuity 
given  by  a  will  in  lieu  of  dower.^ 

§  46.  Rule  as  to  exempt  property. — It  being  a  test  of  a 
fraudulent  transfer  that  the  property  alienated  must  be  of 
some  value  out  of  which  the  creditor  could  have  realized 
the  whole  or  a  portion  of  his  claim, '^  it  would  seem  to  follow 
logically  that  exempt  property  is  not  susceptible  of  fraudu- 
lent alienation.  As  the  creditor  possesses  no  right  to 
have  that  class  of  property  applied  in  satisfaction  of  his 
claim  while  the  debtor  owns  it,  and  would  be  powerless  to 
seize  or  appropriate  it  for  that  purpose  were  it  restored  to 


'  See  Locke  v.  Mabbett,  2  Keyes  (N.  S.  716;  Broadway  IJank  v.  Adams.  133 

Y.)  457;S.  C.3  Abb.  App.  Dec.(N.Y.)68.  Mass.  170;  Spindle  v,  Shreve,  9  Biss. 

•^  See  Graff  v.  Bonnett,  31  N.  Y.  9  ;  199 ;  Hyde  v.  Woods,  94  U.  S.  523.  526. 

Scott  V.  Nevius,  6  Duer  (N.  Y.)  672  ;  Wetmore  v.  Tnislow,  51  N.  Y.  338.  was 

Locke  V.  Mabbett,  2  Keyes  (N.  Y.)  457  ;  not  a  suit  to  reach  surplus,  but  the  whole 

Campbell  v.  Foster,  35  N.  Y.  361.  income,  on  the  ground  that  the  bene- 

^  15  Abb.  Pr.  N.  S.  (N.  Y.)  79.  ficiary  was  also  a  trustee. 

^  70   N.   Y.  279.     See,  also,  infra,  ''  Degraw  v.  Clason,  1 1  Paige  (N.  Y.) 

Chap.   XXIIL  on  Spendthrift  Trusts;  136. 

and  compare  Nichols  v.  Eaton,  91  U.  "  Sec  §  23. 


72 


RULE    AS    TO    EXEMPT    PROPERTY. 


§46 


the  debtor's  possession,  the  legitimate  deduction  would 
seem  to  be  that  the  creditor's  process  could  not  be  fastened 
upon  it  in  the  hands  of  the  debtor's  alleged  fraudulent 
vendee.^  As  to  alienations  of  exempt  property  there  may 
be  a  bad  motive  but  no  illegal  act.^  When  a  fraudulent 
transfer  has  been  avoided,  it  leaves  the  creditor  to  enforce 
his  remedy  against  the  property  in  the  same  manner  as  if 
the  fraudulent  transfer  had  never  been  executed.  The 
creditor  cannot  ask  to  be  placed  in  a  better  position  in  re- 
spect to  the  property  than  he  would  have  occupied  if  no 
fraudulent  bill  of  sale  had  ever  been  made.^  And  it  seems 
from  the  current  of  adjudications  that  a  conveyance  of 
lands  set  aside  for  fraud  at  the  suit  of  creditors,  does  not 
estop  the  grantor  from  claiming  a  homestead  in  the  prem- 
ises thus  conveyed.  Such  a  conveyance  does  not  constitute 
an  abandonment  of  the  homestead  so  as  to  open  it  to  cred- 
itors.'*    Upon  the  same  theory  a  general  assignment  is  not 


^  See  Wood  v.  Chambers,  20  Texas 
247 ;  Foster  v.  McGregor,  1 1  Vt.  595  ; 
Whiting  V.  Barrett,  7  Lans.  (N.  Y.) 
106;  Bean  v.  Smith,  2  Mason  252; 
Winchester  v.  Gaddy,  72  N.  C.  115; 
Legro  V.  Lord,  10  Me.  161  ;  Smith  v. 
Allen,  39  Miss.  469 ;  Youmans  v.  Boom- 
hower,  3  T.  &  C.  (N.  Y.)  21  ;  Pike  v. 
Miles,  23  Wis.  164 ;  Dreutzer  v.  Bell, 
II  Wis.  114;  Smillie  v.  Quinn,  90  N. 
Y.  493 ;  Robb  v.  Brewer,  1 5  Reporter 
648  ;  Premo  v.  Hewitt,  55  Vt.  363. 

-  O'Conner  v.  Ward,  60  Miss.  1037. 
"  To  property  so  exempted  the  cred- 
itor has  no  right  to  look,  and  does  not 
look,  as  a  means  of  payment  when  his 
debt  is  created ;  and  while  this  court 
has  steadily  held,  under  the  constitu- 
tional provision  against  impairing  the 
obligations  of  contracts  by  State  laws, 
that  such  exemption  laws,  when  first 
enacted,  were  invalid  as  to  debts  then 
in  existence,  it  has  always  held,  that, 
as  to  contracts  made   thereafter,  the 


exemptions  were  valid."  Nichols  v. 
Eaton,  91  U.  S.  726. 

^  Sheldon  v.  Weeks,  7  N.  Y.  Leg. 
Obs.  60. 

*  Turner  v.  Vaughan,  33  Ark.  460  ; 
Thompson  on  Homesteads,  §  408,  etc., 
and  cases  cited.  "  It  is  evident,"  says 
Mr.  Freeman,  "  that  creditors  cannot 
be  defrauded,  hindered,  or  delayed  by 
the  transfer  of  property  which,  neither 
at  law  nor  in  equity,  can  be  made  to 
contribute  to  the  satisfaction  of  their 
debts.  Hence  it  is  almost  universally 
conceded  that  property  which  is,  by 
'  statute,  exempt  from  execution,  cannot 
be  reached  by  creditors  on  the  ground 
that  it  has  been  fraudulently  trans- 
ferred." Freeman  on  Executions, 
§  138.  "  Fraud  against  creditors  is 
not  predicable  of  the  conveyance  of 
property  thus  exempt ;  and  so  the  title 
to  it  is  not  impeachable  by  creditors  of 
the  debtor  making  such  conveyance." 
Prout  V.  Vaughn,  52  Vt.  459. 


§47 


PURCHASERS    OF    EXEMPT    PROPERTY. 


invalidated  by  a  clause  which  reserves  all  exempt  property  ;^ 
nothing  is  withheld  which  the  creditors  are  entitled  to  have 
included  in  the  trust ;  and  in  New  York  a  receiver  of  a 
judgment-debtor  gets  no  title  to  exemptions."^  The  ex- 
emption is  said,  however,  to  endure  only  during  the  lifetime 
of  the  party,  and  consequently  a  gift  of  exempt  personalty, 
intended  to  take  effect  upon  the  death  of  the  donor,  and 
made  with  the  object  of  defrauding  creditors,  cannot  be 
sustained.'^ 

§47.  Fraudulent  purchasers  of  exempt  property. — In  con- 
formity with  the  general  rule  that  exempt  property  is  not 
usually  susceptible  of  fraudulent  alienation  as  regards  credit- 
ors,'* the  courts  have  decided  that  there  is  no  intelligible 
ground  upon  which  it  can   be  held  to  be  fraudulent  for  a 


'  Richardson  v.  Marqueze,  59  Miss. 
80;  s.  C.  42  Am.  Rep.  353;  Hilde- 
brand  v.  Bowman,  100  Pa.  St.  580. 
See  Smith  v.  Mitchell,  12  Mich.  180; 
Mulford  V.  Shirk,  26  Pa.  St.  473; 
Heckman  v.  Messinger,  49  Pa.  St.  465. 
Co7itra,  Sugg  v.  Tillman,  2  Swan 
(Tenn.)  208. 

'^  Finnin  v.  Malloy,  33  N.  Y.  Super. 
Ct.  382  ;  Cooney  v.  Cooney,  65  Barb. 
(N.  Y.)  524. 

^  MartiTi  v.  Crosby,  11  Lea  (Tenn.) 
198.  In  Tollotson  v.  Wolcott,  48  N. 
Y.  190,  it  appeared  that  the  debtor  had 
recovered  a  judgment  against  a  cred- 
itor for  an  unlawful  lev)'  upon  and  sale 
of  the  debtor's  exempt  property.  A 
creditor  sought  to  get  the  benefit  of 
this  judgment  on  the  ground  that  the 
character  of  the  property  had  been 
changed.  The  court  said  :  "  It  would 
be  useless  to  grant  the  privilege  con- 
tained in  the  statute  if  it  could  be  ren- 
dered of  no  effect  by  refusing  an  ade- 
quate remedy  for  the  invasion  of  the 
exemption;  or  by  permitting  a  recov- 
ery, when  obtained  for  such  invasion, 
to  be  wrested  from  the  debtor  by  pro- 


ceedings on  behalf  of  his  creditors. 
The  judgment,  when  recovered  by  the 
debtor  for  the  wrongful  invasion  of  his 
privilege  of  the  exemption  of  his  prop- 
erty from  levy  and  sale,  represents  the 
property  for  the  value  of  which  it  was 
recovered.  He  may  make  another  in- 
vestment of  the  money  to  be  recovered 
in  the  same  description  of  property,  in 
the  possession  of  which,  as  a  house- 
holder, or  person  providing  for  the 
support  of  his  family,  the  statute  will 

again  protect  him The  proceeds 

of  the  judgment  should  be  held  to  be 
protected  under  the  statute,  as  exempt 
property,  until  sufficient  time  has 
elapsed  to  afford  the  debtor  a  reason- 
able opportunity  to  again  purchase  the 
description  of  property  necessary  to 
enable  him  to  support  his  family,  and 
in  the  possession  of  which  the  law  will 
protect  him  as  against  the  claims  of 
creditors."  See  Andrews  v.  Rowan, 
28  How.  Pr.  (N.  Y.)  126. 

^  Boggs  V.  Thompson,  13  Neb.  403; 
Derby  v.  Weyrich,  8  Neb.  174;  Crum- 
men  v.  Bennet,  68  N.  C.  494.  Sec 
§46. 


74  PURCHASERS    OF    EXEMPT    PROPERTY.  §  47 

person  whose  property  does  not,  in  the  aggregate,  exceed 
the  value  of  all  the  exemptions,  but  a  portion  of  which 
property  is  in  a  form  not  exempt,  to  convert  or  exchange 
it  into  the  particular  kinds  of  property  which  are  exempt. 
Thus  in  O'Donnell  v.  Segar,^  the  court  argued :  "  The  only 
fraud  claimed  to  have  existed  in  reference  to  the  oxen,  was 
that  he  might  fraudulently  have  acquired  them  from  the 
proceeds  or  exchange  of  other  property  which  was  not 
exempt,  and  this  with  the  intent  to  defeat  the  claims  of 
creditors.  This,  in  my  opinion,  if  true,  does  not  constitute 
legal  fraud,  so  long  as  he  was,  in  fact,  engaged  in  one  of 
the  occupations  mentioned,  ....  in  which  the  use  of  the 
cattle  was  needed."  In  Randall  v.  Bufhngton,^  the  court 
decided  that  a  general  creditor  of  an  insolvent  debtor  could 
not  subject  a  homestead  to  liability  for  his  debts  notwith- 
standing the  insolvent  had  applied  property  in  his  hands  to 
the  payment  of  a  debt  which  was  a  lien  on  the  homestead."^ 
"  It  must  be  remembered,"  said  Chief-Justice  Breese,  "  that 
it  is  not  a  fraud  on  creditors  to  buy  a  homestead  which 
would  be  beyond  their  reach." ^  This  would  seem  to  afford 
a  debtor  an  opportunity  to  practice  a  species  of  petty  fraud 
upon  his  creditors,  but,  as  exemptions  of  property  from 
execution  are  usually  very  limited  in  amount,^  and  the 
policy  of  the  law  is  to  prevent  the  creditor  from  absolutely 
stripping  the  debtor  of  every  vestige  of  property,  and  of  all 
the  necessary  conveniences  of  living,  or  means  of  gaining 
a  subsistence,  the  result  is  not  to  be  deprecated.  Mani- 
festly the  creditor  should  not  be  favored  to  the  extent  of 
absolutely  crippling  and  pauperizing  the  debtor,^  or  render- 
ing him  a  public  charge. 

'  25  Mich.  377.  stead  for  himself  and  family,  whether 

*  lo  Cal.  493.  by  an  arrangement  with  creditors  who 
'  See  In  re  Henkel,  2  Sawder  308.  might  levy  on  it,  or  by  the  purchase  of 

*  Cipperly  v.  Rhodes,  53  111.  350.  a  house,  or  by  moving  into  a  house 
^  See  Nichols  v.  Eaton,  91  U.  S.  726.  which  he  already  owns,  takes  nothing 

*  See   Hixon  v.  George,   18   Kansas     from  his  creditors  which  the  law  has 
253.    "  The  debtor,  by  securing  a  home-     secured  to  them,  or  in  which  they  have 


§§  4^*  49  CONFLICTING    CASES.  75 

>J  48.  Covinous  alienations  of  exemptions, — A  conveyance 
of  liomestead  by  an  embarrassed  debtor  and  his  wife  to  a 
third  party,  and  by  the  third  party  to  the  wife,  cannot  be 
set  aside  as  fraudulent  and  void  as  to  creditors,  for  the 
homestead  is  out  of  their  reach, ^  and  in  general  a  voluntary 
conveyance  of  property  exempt  from  execution  vests  a 
good  title  in  the  donee,  as  against  the  creditors  of  the  do- 
nor.^ The  creditor,  as  we  have  said,  cannot  be  injured  or 
defrauded  by  the  transfer  of  property  which  is,  by  positive 
law,  expressly  exempt  from  seizure  to  satisfy  their  debts."^ 

§49.  Conflicting  cases.  —  The  cases  are  not,  however, 
uniform  in  this  regard,  and  are  in  some  instances  disin- 
clined to  allow  a  debtor  to  turn  what  was  intended  as  a 
shield  of  poverty  into  an  instrument  of  fraud  ;  "*  and  there 
are  decisions  of  at  least  local  authority  which  deny  the 
benefit  of  the  exemption  laws  to  a  dishonest  debtor  who 
shuffles  and  conceals  his  property,^  or  executes  a  homestead 
deed  in  furtherance  of  a  design  to  hinder,  delay,  and  de- 
fraud creditors  in  the  recovery  of  their  just  debts.''     And  it 


any  vested  right.    He  conceals  no  prop-  v.  Wade,  i   Bush  (Ky.)  no;  Patten  v. 

erty.    He  merely  puts  his  property  into  Smith,  4  Conn.  450  ;  Tracy  v.  Cover, 

a  shape  in  which  it  will  be  the  subject  28  Ohio  St.  61.     See  §  46. 

of  a   beneficial    provision    for    himself  •'•  Morrison  v.  Abbott,  27  Minn.  116; 

which  the  law  recognizes  and  allows."  Carhart  v.  Harshaw,  45  Wis.  340;  S. 

Hoar,  J.,  in  Tucker  v.  Drake,  11  Allen  C.  30  Am.  Rep.  752,  and  notes;  De- 

(Mass.)  146.  lashmut  v.  Trau,  44  Iowa  613;  Smith  v. 

'  Morrison  v.  Abbott,  27  Minn.  116.  Rumsey,  33  Mich.  183;  Derby  v.  Wey- 

See  Ferguson  V.  Kumier,  27  Minn.  156  ;  rich,  8  Neb.    174;  Megehe  v.  Draper. 

Baldwin    v.    Rogers,    28    Minn.    544;  21   Mo.  510;  Washburn  v.  Goodheart, 

McFarland  v.  Goodman,  6  Biss.   11 1  ;  88  111.  229;  Hixon  v.  George,  18  Kans. 

Vogler  V.  Montgomery,  54    Mo.  578;  253;  O'Conner  v.  Ward.  60  Miss.  1036. 

Cox  V.  Wilder,  2  Dillon  46;  White  v.  ^  Brackett   v.  Watkins,  21    Wendell 

Givens,   29  La.   Ann.    571  ;    Muller  v.  (N.  Y.)  68. 

Inderreiden,  79  111.  382  ;    Hugunin  v.  '  Strouse's  Ex'r  v.  Becker,  38  Pa.  St. 

Dewey,    20    Iowa    368 ;     Buckley    v.  192. 

Wheeler,  52  Mich.  I  ;  Schribar  v.  Piatt,  "^  See  Rose  v.  Sharpless,    33   Gratt. 

19  Neb.  631,  (Va.)     156.     See    generally    Smith    v. 

-  Furman  v.   Tenny,   28   Minn.  T]  ;  Emerson,  43  Pa.  St.  456 ;  Gilleland  v. 

Duvall  V.  Rollins,  68  N.  C.  220  ;  Mose-  Rhoads,  34  Pa.  St.  187  ;  Dififenderfer  v. 

ley  V.  Anderson,  40  Miss.  49 ;  Anthony  Fisher,  3  Grant's  Cases  (Pa.)  30 ;  Piper 


"^G  ABANDONED    EXEMPTIONS.  §§  50,   ^Oa 

has  been  held  that  the  privileges  of  the  homestead  act  may 
be  forfeited  by  fraud  ;  ^  and  the  right  to  claim  exemption 
also  forfeited  and  lost,^  This  does  not,  it  seems  to  us,  vary 
the  general  principle  already  stated,  for  in  these  latter  cases 
the  property  is  not  considered  to  be  under  the  cover  or  pro- 
tection of  the  exemption  statutes,  and  by  the  rule  of  con- 
struction just  stated,  is  liable  to  the  claims  of  creditors 
much  the  same  as  though  it  had  never  been  even  colorably 
embraced  within  the  exemptions. 

§  50.  Abandoned  exemptions. — It  is  asserted  in  Crosby  v. 
Baker,^  that  if  the  debtor  changes  his  purpose  to  use  the 
exempt  articles  in  his  business,  and  determines  to  and  does 
in  fact  sell  them  to  a  third  person,  such  bargain  being  made 
to  defraud  creditors,  and  this  purpose  being  participated  in 
by  the  vendee,  the  conveyance  gives  no  title  to  the  pur- 
chaser, and  the  property  may  be  reclaimed  and  held  by  the 
assignee  of  the  insolvent  debtor  in  an  action  against  the 
purchaser.*  The  change  of  intention,  it  is  argued,  takes 
away  one  of  the  requisites  for  the  exemption  of  the  prop- 
erty. The  same  principle  applies  to  abandoned  home- 
steads.^ 

§  50«.  What  cannot  be  reached. — While  the  property  or 
accumulations  of  a  debtor  belong  to  his  creditors,  this  is 
not  true  of  his  talents  or  industry.  Said  Hunt,  C.  \^  "  The 
application  of  the  debtor's  property  is  rigidly  directed  to 
the  payment  of  his  debts.  He  cannot  transport  it  to  an- 
other country,  transfer  it  to  his  friend,  or  conceal  it  from 
his  creditor.     Any  or  all  of  these  things  he  may  do  with 


V.  Johnston,  12  Minn.  67;  Chambers  Smith,  30  Pa.  St.  264;  Larkin  v.  Mc- 

V.  Sallie,  29  Ark.  407  ;  Huey's  Appeal,  Annally,    5   Phila.    (Pa.)    17;    Carl   v. 

29  Pa.  St.  219;  Currier  v.  Sutherland,  Smith,  8  Phila.  (Pa.)  569. 

54  N.  H.  475  ;  s.  C.  20  Am.  Rep.  143,  ^  6  Allen  (Mass.)  295. 

and  note.  •*  See   Stevenson  v.  White,  5  Allen 

'  Pratt  V.  Burr,  5  Biss.  36.  (Mass.)  148. 

^  Cook  V.  Scott,  6  111.  335  ;  Cassell  °  Cox  v,  Shropshire,  25  Texas  113. 

V.  Williams,  12  111.  387;  Freeman  v.  «  Abbey  v.  Deyo,  44  N.  Y.  347. 


§  ^Oa  WHAT    CANNOT    BE    REACHED.  "/y 

his  industry.  He  is  at  liberty  to  transfer  his  person  to  a 
foreign  land.  He  may  bury  his  talent  in  the  earth,  or  he 
may  give  it  to  his  wife  or  friend.  No  law,  ancient  or  mod- 
ern, of  which  I  am  aware,  has  ever  held  to  the  contrary."  ^ 


'  Compare  Lynn  v.  Smith,  35  Hun    90,  91 ;  Gage  v.  Dauchy,  34  N.  Y.  293  ; 
(N.  Y.)  275  ;  Ross  v.  Hardin,  79  N.  Y.     Gillett  v.  Bate,  86  N.  Y.  94. 


CHAPTER   III. 


CREDITORS     REMEDIES. 


§  51.  Concurrent  remedies — Legal  and 
equitable. 

52.  No  injunction  against  debtor  be- 

fore judgment. 

53.  Certain  exceptional  cases. 

54.  Joinder  of  claims. 

55.  Uniting  causes  of  action. 

56.  Exclusive  jurisdiction  in  equity. 

57.  Land  purchased  in  name  of  third 

party. 

58.  Relief  before  and  after  sale. 

59.  The  remedy  at  law. 

60.  By  suit  in  equity. 

61.  Supplementary  proceedings. 

62.  Assumpsit — Case — Conspiracy. 


§  62a.  Reference  not  ordered. 

63.  Relief  collateral  to  main  action. 

64.  Remedy  governed  by  lex  fori. 

65.  Cumulative    remedies  —  Allowed 

and  disallowed. 

66.  Effect  of  imprisonment  of  debtor. 

67.  Election  of  remedies. 

68.  Creditors'  bills. 

69.  Direct  and  collateral  attack — Ex- 

ceptional doctrine  in  Louisiana. 

70.  Forms  of  relief  in  cases  of  fraud 

on  wife. 

71.  Procedure  in  Federal  tribunals. 

72.  Recapitulation. 


§  51.  Concurrent  remedies— Legal  and  equitable. — Equity 
has  concurrent  jurisdiction  with  law  over  frauds  under  the 
statute  13  Eliz.  c.  5,  or  similar  enactments/  and  the  same 
general  rules  of  construction  govern  in  both  courts.^  Thus 
it  was  remarked  by  the  Supreme  Court  of  New  Jersey  : 
"  Courts  of  law  and  courts  of  equity  have  concurrent  juris- 
diction over  frauds,  under  the  statute  concerning  fraudulent 
conveyances.  In  cases  where  the  legal  title  to  the  property 
is  such  that  it  cannot  be  seized  under  execution,  resort  to 
equity  is  necessary — as  where  the  legal  title  has  never  been 
in  the  debtor,  having  been  conveyed  by  a  third  person 
directly  to  another,  in  secret  trust  for  the  benefit  of  the 
debtor,  with  a  design  fraudulently  to  screen  it  from  his 
creditors.^    But  where  the  leo-al  title  has  been  in  the  debtor, 


'  Orendorf  v.  Budlong,  12  Fed.  Rep.     Cas.  (5th  ed.)  58,  59,  note;  Hopkirk  v. 
24.  Randolph,  2  Brock.  133.     See  §4. 

■^  Sexton   V.   Wheaton,   i   Am.    Lea.         ""  See  §  57. 


-^omI  -  l^^ 


^ 


§  51  CONCURRENT    REMEDIES.  79 

SO  as  to  be  subject  to  execution  at  law,  and  might  be  made 
available  for  the  satisfaction  of  the  debt,  if  the  fraudulent 
conveyance  had  not  been  interposed,  the  creditor,  or  a  third 
person  having  taken  title  under  a  sheriff's  sale,  may  bring 
ejectment,  and  avoid  the  fraudulent  conveyance  by  proof 
of  the  illegal  purpose  for  which  it  was  made."^  It  will  be 
presently  seen  that  this  latter  illustration  is  not  of  universal 
application.^  The  forms  of  relief  available  to  creditors  are 
outlined  in  our  opening  chapter,"^  where  it  is  shown  that 
creditors  may  invoke  the  aid  of  equity  in  two  cases,  after 
proceeding  to  judgment  and  execution  at  law  without  ob- 
taining satisfaction  of  the  debt.^  In  the  first  class  of  cases 
the  complainant  proceeds  simply  upon  the  ground  of  fraud, 
and  in  support  or  furtherance  of  the  remedy  at  law,  while 
in  the  other  class  of  cases-  relief  is  sought  upon  the  theory 
that  the  remedy  at  law  has  been  exhausted,  and  that  it  is 
inequitable  and  unjust  on  the  part  of  the  debtor  to  refuse 
to  apply  any  intangible  property  or  choses  in  action  toward 
the  payment  of  the  judgment.^  Resort  by  creditors  to 
courts  of  equity  is  of  very  frequent  occurrence  because  the 
common  law  is  not  sufficiently  flexible.  Of  necessity,  in  a 
common-law  action  a  purchase  is  treated  as  either  valid  or 
void.^  There  is  no  middle  ground."^  Proof  of  absolute 
fraud,  which  is  usually  difficult,  is  for  that  reason  generally 
required  at  law,  while  in  equity  it  is  said  that  an  unfair  or 
inequitable  transaction — one  not  of  necessity  absolutely 
fraudulent  in  the  full  sense  of  that  term  —  may  be  unrav- 
elled in  the  interest  of  creditors.  In  such  cases  the  rights 
of  an  innocent  vendee  can  be  preserved  and  protected  by 

'  Mulford  V.  Peterson,  35  N.  J.  Law     (N.  Y.)  305  ;   Jones  v.  (".reen,  i  Wall 

I33-  33'- 

-  See  §  69.  'Williams    v.     llubbaril,    Walker's 

*See§4.  Ch.  (Mich.)  29. 

•*  Williams    v.    Hubbard,    Walker's  ''  See  I'/i/ra.  Void  and  Voidable  Acts. 

Ch.  (Mich.)  28;  Cornell  v.  Radway,  22  Also  Chap.  XIII. 

Wis.   264;    Beck  v.   Burdett,   i   Paige  '  See  §  193,  P'oster  v.  Foster.  56  Vl. 

540. 


80  CONCURRENT    REMEDIES.  §   5  I 

the  plastic  hand  of  equity.  In  other  words,  certain  cases 
v^  seem  to  imply  that  proof  of  fraud  need  not  be  so  complete 
in  equity  as  at  law  ;  ^  but  it  is  not  so  easy  to  illustrate  the 
distinction  or  to  state  a  substantial  justification  for  its  ex- 
istence.^ Mr.  Abbott  observes  in  an  editorial  in  the  New 
York  Daily  Register  :^  "  In  the  quaint  language  of  West- 
minster Hall,  '  legal  fraud '  means  illegal  fraud,  that  is  to 
say,  fraud  for  which  an  action  at  law  lay  to  recover  dam- 
ages. So  'equitable  fraud'  means  inequitable  conduct  not 
illegal  in  the  sense  of  sustaining  an  action  for  damages,  but 
yet  so  like  it  in  effect  that  the  Chancellor  would  give  a 
remedy." 

Though  in  some  States  legal  and  equitable  jurisdictions 
have  been  united  in  the  same  tribunals,  yet  the  distinctions 
which  formerly  appertained  in  the  forms  of  action,  of  plead- 
ing, and  of  relief,  are  by  no  means  superseded  or  obliter- 
ated. In  territory  where  the  system  of  common  law  and 
chancery  both  prevail,  and  the  only  adequate  relief  is  in 
equity,  and  the  pleadings  are  framed  in  accordance  with 
this  view,  the  suit  must  be  tried  as  a  chancery  case  by  the 
modes  of  procedure  known  to  courts  of  equity.  The  judge 
or  chancellor  is  responsible  for  the  decision,  and,  though  he 
may,  by  means  of  feigned  issues,  refer  any  questions  of  fact 
to  a  jury,^  still  his  own  conscience  must  be  satisfied  that  the 
finding  is  correct,  and  the  decree  must  be  rendered  as  the 
result  of  his  individual  judgment,  aided,  it  may  be  true,  by 
the  finding  of  the  jury.  Hence,  where  the  trial  in  such  a 
case  is  conducted  as  though  it  were  a  controversy  in  a  com- 
mon-law action,  and  a  judgment  is  rendered  upon  a  verdict 
as  at  common  law,  it  will  be  reversed  for  error.^     And  in 


'  Warner  v.  Daniels,  i  Woodb.  &  M.  ^  Nov.  15,  1888. 

103  ;  Fullagar  v.  Clark,  18  Ves.  483;  ^  See  Wright  v.  Nostrand,  94  N.  Y. 

Earl  of  Chesterfield  v.  Janssen,  2  Ves.  31  ;  Colman  v.  Dixon,  50  N.  Y.  572. 

Sen.  143.  ^  Dunphy   v.    Kleinsmith,   11    Wall. 

^  See  Marksbury  v.  Taylor,  10  Bush  615. 
(Ky.)  519. 


§  52  NO    INJUNCTION    BEFORE    JUDGMENT.  8 1 

an  equitable  proceeding  of  this  character,  as  will  presently 
be  shown,  a  decree  in  the  nature  of  a  judgment  for  dam- 
ages cannot  be  rendered  against  the  defendant  who  is 
alleged  to  have  fraudulently  taken  an  assignment  of  the  in- 
solvent's property.  The  decree  must  be  for  an  accounting 
as  to  the  property  which  has  come  into  the  hands  of  the 
fraudulent  vendee.^  Where  property  which  is  legally  liable 
to  be  taken  in  execution  has  been  fraudulently  conveyed 
or  encumbered,  the  jurisdiction  is  usually  concurrent,  as 
the  creditor  may  either  issue  an  execution  at  law  and  sell 
the  property,  or  file  a  bill  in  equity  to  have  the  conveyance 
set  aside.^  The  remedy  in  equity,  as  will  presently  appear,^ 
is  necessarily  exclusive  in  cases  where  the  subject-matter  of 
contention  is  not  subject  to  execution. 

§  52.  No  injunction  against  debtor  before  judgment. — ^Vs  a 
general  rule,  a  simple  contract  creditor  who  has  no  lien  on 
the  property,  cannot  enjoin  his  debtor  from  selling  it,  nor 
will  he  be  allowed  to  come  into  equity  to  invoke  its  inter- 
ference to  preserve  the  property  until  a  judgment  can  be 
obtained."*  If  the  property  of  an  honest  struggling  debtor 
could  be  tied  up  by  injunction  upon  mere  unadjusted  legal 
demands,  he  might  be  constantly  exposed  to  the  greatest 
hardships   and  grossest  frauds,   for  which   the  law  would 

'  See  §§  176-179.  feldt  v.  Boehm,  96  111.  56o;'Moran  v. 

-  See  note  to  Sexton  v.  Wheaton,  1  Dawes,  i  Hopk.  Ch.  (N.  Y.)  365  ;  Uor- 

Am.  Lea.  Cas.  {5th  ed.)  58,  59;  Bisp-  tic  v.  Dugas,  52  Ga.  231  ;  Buchanan  v. 

ham's   Equity,    §242;  Blenkinsopp   v.  Marsh,  17  Iowa  494;  Rich  v.  Levy,  16 

Blenkinsopp,  i  De  G.,  M.  &  G.  500;  Md.  74;  Phelps  v.  Foster,  18  III.  309; 

Partee  V.  Mathews,  53  Miss.  146;  Sheafe  Brooks  v.  Stone,  19  How.  Pr.  (N.  Y.) 

V.  Sheafe,  40  N.  H.  516;  Scott  v.  In-  395;  Uhl  v.  Dillon,  10  Md.  500;  Hub- 

dianapolis  Wagon  Works,  48  Ind.  75  ;  .  bard  v.  Hubbard,  14  Md.  356.     Com- 

Gallman  v.  Perrie,  47  Miss.  131,  140;  pare  Case  v.  Beauregard,  99  U.  S.  125; 

Barto's  Appeal,  55  Pa.  St.  386  ;  Tupper  Locke  v.  Lewis,  124  Mass.  i.    See  §73. 

V,  Thompson,  26  Minn.  386  ;  Henry  v.  Nor  can  a  creditor  having  possession  of 

Hinman,  25  Minn.  199.  the  debtor's  property,  without  judicial 

"*  See  §  56.  process  and  against  the  debtors  will, 

'' Peyton    v.    Lamar,    42   Ga.     134;  sell  the  property  and  apply  its  proceeds 

Cubbedgev.  Adams,  42  Ga.  124;  Ober-  to  the  payment  of  the  debt.     Xenia 

holser  v.  Greenfield,  47  Ga.  530;  Shu-  Bank  v.  Stewart,  114  U.  S.  224. 
6 


82  NO    INJUNCTION    BEFORE    JUDGMENT.  §   52 

afford  no  adequate  remedy.  It  would  deprive  him  of  the 
means  of  payment,  or  of  defending  himself  against  vexa- 
tious litigation,  and  force  him  into  unconscionable  compro- 
mises to  prevent  the  ruin  of  his  business  pending  the  con- 
troversy.^ An  injunction  ought  not  to  issue  to  compel 
parties  to  hold  goods  pending  a  trial  at  law  with  the  ex- 
pectation that  they  may  be  wanted  to  answer  an  execution 
upon  a  judgment  which  the  creditor  hopes  to  obtain.^  "  The 
authorities  are  clear,"  says  the  learned  and  lamented  Mr. 
Justice  Campbell,^  "that  chancery  will  not  interfere  to  pre- 
vent an  insolvent  from  alienating  his  property  to  avoid  an 
existing  or  prospective  debt,  even  when  there  is  a  suit  pend- 
ing to  establish  it."  "The  reason  of  the  rule,"  says  Chan- 
cellor Kent,  "seems  to  be  that  until  the  creditor  has  estab- 
lished his  title  he  has  no  right  to  interfere,  and  it  would 
lead  to  an  unnecessary  and,  perhaps,  a  fruitless  and  oppres- 
sive interruption  of  the  exercise  of  the  debtor's  rights. 
Unless  he  has  a  certain  claim  upon  the  property  of  the 
debtor,  he  has  no  concern  with  his  frauds."^     So  the  sim- 


'  Shufeldt  V.  Boehm,  96  111.  560.  lief  prayed.  No  authority  has  been 
'^  Phelps  V.  Foster,  18  111.  309;  Hea-  shown  to  this  court,  nor  can  any  be  pro- 
cock  V.  Durand,  42  111.  230 ;  Homer  v.  duced  entitled  to  consideration,  which 
Zimmerman,  45  111.  14.  sanctions  the  exercise  of  the  high  and 
^  Adler  v.  Fenton,  24  How.  411.  extraordinary  power  of  a  court  of  chan- 
■*  Wiggins  V.  Armstrong,  2  Johns,  eery,  to  interpose,  by  writ  of  injunction, 
Ch.  (N.  Y.)  145,  and  the  able  opinion  of  in  a  case  like  the  one  before  us,  re- 
Chancellor  Kent.  Uhl  v.  Dillon,  10  straining  a  debtor  in  the  enjoyment  and 
Md.  500,  was  a  bill  for  an  injunction  power  of  disposition  of  his  property, 
and  receiver  filed  by  a  simple  contract  The  appellees  (the  complainants  below) 
creditor,  charging  that  the  defendant  are  merely  general  creditors  of  the  ap- 
was  deeply  in  debt ;  that  he  was  dispos-  pellant,  who  have  not  prosecuted  their 
ing  of  his  stock  ;  had  already  parted  claim  to  judgment  and  execution,  nor 
with  his  real  estate ;  and  was  collecting "  in  any  other  manner  acquired  a  lien 
debts  due  to  him,  with  the  intention  to  upon  the  debtor's  property,  and  were 
defraud  creditors  and  abscond.  An  in-  not  entitled  to  the  writ  of  injunction 
junction  was  allowed  and  a  receiver  nor  to  the  appointment  of  a  receiver, 
appointed.  The  appellate  court  in  re-  Whatever  may  be  the  supposed  defects 
versing  the  decree  and  dismissing  the  of  the  existing  laws  of  the  State,  in 
bill,  said  (p.  503) :  "  The  bill  filed  by  leavmg  to  the  debtor  the  absolute 
the  appellees  in  this  cause,  states  no  power  of  disposing  of  his  property,  and 
sufficient  case  entitling  them  to  the  re-  leaving  the  creditor   to  the  slow  and 


§  53  CERTAIN  EXCEPTIONAL  CASES.  S^ 

pie  contract  creditors  of  a  firm  ordinarily  have  no  specific 
lien  upon  the  firm  property  which  will  enable  them  to  in- 
terfere with  any  disposition  which  the  firm  may  make  of  it.' 
§  53.    Certain  exceptional  cases. — Occasional   exceptions 
may  be  found  in  some  States  to  the  rule  that  equity  will 
not  interfere  at  the  instance  of  a  simple  contract  creditor. 
But  the  exceptions  prove  the  force  of  the  rule.     In  Moore 
V.  Kidder,'^  the  bill  distinctly  charged  a  fraudulent  intention 
on  the  part  of  a  debtor  summoned  as  trustee,  and  an  at- 
tempt to  dispose  of  his  property,  and  put  it  beyond  the 
reach  of  creditors,  for  the  purpose  of  defeating  the  plain- 
tiffs in  the  collection  of  any  judgment  that  might  be  ob- 
tained in  a  suit  at  law,  and  asked  for  an  injunction  to  pre- 
vent that  mischief  and  wrong.     The  court  said  that  the  bill 
very  clearly  showed  a  case  for  equitable  interference,  in  aid 
of  the  remedy  at  law,  and  that  without  such  relief  the  suit 
at  law  would  be  rendered  fruitless  by  the  active  fraud  of 
the  defendant.^     Clearly  this  was  a  proper  case  for  the  issu- 
ance of  an  attachment  or  other  suitable  provisional  relief 
in  the  action  at  law.      In  another  case  where  a  bill  charged 
insolvency  in  the  debtor,  and  averred  that  he  had  fraudu- 
lently transferred  his  goods  to  a  third  person,  who  was  im- 
plicated in  the  fraud,  and  that  the  debtor  had  purchased  the 
goods  with  intent  to  defraud  the  plaintiffs,  a  receivership 

very  inadequate  legal  remedies  now  pro-  Knox  County  Bank,   8  Ohio  St.  511; 

vided,  if  such  defects  exist,  it  is  solely  Potts  v.  Blackwell,  4  Jones'  Eq.  (N.  C.) 

in  the  power  of  the  legislature  to  cor-  58  ;  Field  v.  Chapman,  15  Abb.  Pr.  (N. 

rect  them.     It  is  not  within  the  prov-  Y.)  434 ;  State  v.  Thomas,  7  Mo.  App. 

ince  of  the  chancery  courts  to  stretch  205  ;    Shackelford    v.    Shackelford,    32 

their  power  beyond  the  limits  of  the  au-  Gratt.  (Va.)  481  ;  Allen  v.  Center  Val- 

thorities  of  the  law,  for  the  purpose  of  ley  Co.,  21   Conn.  130;  Schmidlapp  v. 

remedying  such  defects.    Such  a  course  Currie,  55  Miss.  597  ;  Reeves  v.  Ayers, 

would  be  productive  of  great  mischief,  38  111.  418  ;  Mayer  v.  Clark,  40  Ala.  259. 

and  make  the  rights  of  the  citizen  de-  See  Case  v.  Beauregard,  99  U.  S.  125. 

pend  upon  the  vague  and  uncertain  dis-  "  55  N.  H.  491. 

crelion  of  the  judges,  instead  of  the  safe  "Compare    Bowcn    v.    Hoskins,   45 

and  well-defined  rules  of  law."  Miss.  183;  Cottrcll   v.  Moody,  12    B. 

'  Wilcox  v.   Kellogg,   11   Ohio  394;  Mon.  (Ky. )  502;  Thompson  v.  Diffen- 

Gwin  v.  Selby,  5  Ohio  St,  97 ;  Sigler  v.  derfer,  i  Md.  Ch.  489. 


84  JOINDER    OF    CLAIMS.  §   54 

was  allowed  before  judgment.^  Here  the  relief  was  ex- 
tended upon  the  theory  that  the  goods  for  which  the  indebt- 
edness was  created  were  fraudulently  obtained,  and  that  the 
debtor  never  acquired  title  to  them.  This  would  seem  to 
be  substantially  substituting  a  bill  in  equity  for  the  relief 
usually  incident  to  replevin.  These  cases  can  scarcely  be 
commended  as  safe  precedents. 

§  54.  Joinder  of  claims. — The  assets  of  the  fraudulent 
debtor  are,  as  a  rule,  scattered  among  different  friends,  in 
different  forms,  and  by  transactions  had  at  different  times. 
This  requires  us  to  notice  the  authorities  as  to  uniting  or 
joining  claims.  In  cases  where  the  sole  object  of  the  bill 
is  to  secure  satisfaction  of  a  judgment  out  of  property 
fraudulently  alienated,  the  suit  may  be  framed  to  avoid 
several  distinct  conveyances  made  to  as  many  grantees. 
Such  a  bill  is  said  to  embody  a  single  cause  of  action.^ 
This  principle  applies  although  the  defendants  may  have 
separate  and  distinct  defenses.^  In  Lattin  v.  McCarty,*  it 
was  decided  that  an  equitable  cause  of  action  to  cancel  and 
remove,  as  a  cloud  upon  plaintiff's  title,  a  deed  given  by 
mistake  by  a  third  party  to  the  defendant,  under  which  the 
latter  had  fraudulently  obtained  possession,  could  be  united 
with  a  claim  to  recover  possession  of  the  premises,  and  as- 
serted in  the  same  complaint.  The  principle  of  this  case 
was  expressly  repudiated  in  Missouri  in  an  action  involving 
substantially  the  same  state  of  facts,  on  the  theory  that  a 
bill  in  equity  was  not  a  proper  form  of  action  for  the  recov- 
ery of  the  possession  of  real  estate,  there  being  an  adequate 
remedy  at  law.^     But  this  latter  reason  does  not  commend 

'  Cohen  V,  Meyers,  42  Ga.  46.    Com-  er  v.  Tucker,  29  Mo.  350;  Snodgrass 

pare  Hyde  v.  Ellery,  18  Md,  500;  Ro-  v.  Andrews,  30  Miss.  472  ;    Reed   v. 

senberg  v.  Moore,  1 1  Md.  376  ;  Hag-  Stryker,  4  Abb.  App.  Dec.  (N.  Y.)  26  ; 

garty  v.  Pittman,  i  Paige  (N.  Y.)  298.  Dimmock  v.  Bixby,  20  Pick.  (Mass.)368. 

-  Trego    V.    Skinner,  42    Md.    432  ;         *  Donovan  v.  Dunning,  69  Mo.  436. 
North  V.  Bradway,  9  Minn.  183  ;  Chase        •*  41  N.  Y.  107. 

V.    Searles,   45    N.   H.   511;    Jacot   v.         *  Peyton  v.  Rose,  41  Mo.  257;  Curd 

Boyle,  18  How.  Pr.  (N.  Y.)  106  ;  Tuck-  v.  Lackland,  43  Mo.  140. 


§  55  UNITING    CAUSES    OF    ACTION.  85 

itself  as  conclusive.  Fraudulent  confessions  of  judgments 
entered  in  different  courts  may  be  attacked  in  one  suit.^ 
So  a  partner  may  sue  his  copartners  for  an  accounting,  and 
may  join  in  the  same  action  alienees  of  his  copartners,  to 
whom  the  latter  have  collusively  transferred  partnership 
assets  in  fraud  of  the  partnership,  and  seek  a  cancellation 
of  the  transfer  as  well  as  an  accounting.  "  Why,"  it  has 
been  said,  "  should  not  all  this  be  embraced  in  one  action  ? 
The  object  is  single,  viz.  :  To  bring  about  a  complete  and 
final  settlement  of  the  partnership."- 

§  55.  Uniting  causes  of  action. — Questions  relating  to  the 
joinder  of  causes  of  action  of  necessity  frequently  arise  for 
adjudication  in  contests  of  the  class  under  consideration, 
where  debtors  have  sought  to  conceal  property  by  different 
subterfuges.  In  Palen  v.  Bushnell,-^  the  plaintiff,  as  re- 
ceiver in  supplementary  proceedings,  instituted  an  action 
against  the  debtor  and  a  third  party,  (i).  To  recover  moneys 
usuriously  exacted  by  the  third  party  from  the  debtor  ;  (2). 
To  compel  the  third  party  to  account  for  securities  belong- 
ing to  the  debtor  ;  and  (3).  To  set  aside  as  fraudulent  cer- 
tain transfers  of  real  and  personal  property  alleged  to  have 
been  made  by  the  debtor  to  the  third  party.  The  court  ob- 
served :  "  What  is  the  subject  of  the  action  in  this  case  ? 
It  is  the  restitution  of  the  property  of  the  judgment-debtor 
whom  the  plaintiff  represents.  To  entitle  iiimsclf  to  this 
relief,  the  plaintiff  avers  in  his  complaint  different  transac- 
tions out  of  which  his  right  to  restitution  flows."  This 
statement  is  criticised  by  Mr.  Pomeroy,^  as  follows  :  "  There 
is  here  a  plain  confusion  of  ideas.     The  restitution  of  the 


'  Uhlfelder  v.  Levy,  9  Cal.  607.  pel   payment  of  unpaid    subscriptions 

'  Compare,  upon    this  general  sub-  and  a  claim  to  enforce  the  individual 

ject,  Webb  v.  Helion,  3  Rob.  (N.  Y.)  liability  of  stockholders.      Warner   v. 

625 ;  Wade  v.  Rusher,  4  Bosw.  (N.  Y.)  Callender,  20  Ohio  St.  190. 

537.     A  judgment-creditor  of  an  insol-  ^  46  Barb.  (N.  Y.)  25. 

vent  railroad  corporation  may  in  Ohio  •*  Remedies   and    Remedial    Rights. 

join  in  the  same  action  a  claim  to  com-  §  470. 


86  EXCLUSIVE    JURISDICTION    IN    EQUITY.  §56,57 

debtor's  property,  which  is  the  rehef  demanded,  is  the 
object  of  the  action.  If  there  is  anything  connected  with 
this  matter  clear,  it  is  that  the  authors  of  the  code  used  the 
terms  '  subject  of  action  '  and  '  object  of  the  action  '  to  de- 
scribe different  and  distinct  facts."  The  criticism  upon  the 
particular  language  employed  in  this  case  is  probably  just, 
but  we  cannot  suppress  the  conviction  that  a  system  of  pro- 
cedure which  prohibited  the  joinder  of  such  claims  in  a 
single  action  would  furnish  most  unsatisfactory  and  inad- 
equate redress  to  creditors. 

§  56.  Exclusive  jurisdiction  in  equity. — Manifestly  in  cases 
where  property  is  of  such  nature  that  it  never  was  subject 
to  execution  at  law,  the  remedy  of  creditors  desiring  to 
reach  it,  as  we  have  observed,  is  exclusively  in  chancery.^ 
Thus,  as  has  already  been  shown,^  it  was  observed  by  Chief- 
Justice  Gray,  in  delivering  the  opinion  of  the  Supreme 
Court  of  Massachusetts,  in  Drake  v.  Rice,^  that,  "  by  the 
law  of  England  before  the  American  Revolution,  .... 
fraudulent  conveyances  of  choses  in  action,  though  not 
specified  in  the  statute,  were  equally  void,  but  from  the 
nature  of  the  subject,  the  remedy  of  the  creditor  must  be 
sought  in  equity."  * 

§  57.  Land  purchased  in  name  of  third  party. — The  creditor 
may  encounter  a  practical  difficulty  in  reaching  realty  paid 
for  by  the  debtor  the  title  to  which  is  fraudulently  taken 
in  the  name  of  a  third  party.  This  is  a  very  common  device. 
The  courts  are  somewhat  at  variance  upon  the  question  as 
to  whether  or  not  real  estate  so  held  can  be  sold  on  execu- 


'  See  Weed  V.  Pierce, 9  Cow.  (N.  Y.)  Atk.  603,  note;  Horn  v.  Horn  (1749), 
722;  Sexton  V.  Wheaton,  i  Am.  Lea.  Ambl.  79;  Ryall  v.  Rolle  (1749),  ^ 
Cas.  (5th  ed.)  59;  Drake  v.  Rice,  130  Atk.  165;  S.  C.  i  Ves.  Sr.  348;  Part- 
Mass.  412;  Abbott  V.  Tenney,  18  N.  ridge  v.  Gopp  (1758),  i  Eden  163;  s. 
H.  109;  Sargent  v.  Salmond,  27  Me.539.  C.  Ambl.   596 ;  Bayard  v.  Hoffman,  4 

«  See  §17.  Johns.  Ch.   (N.  Y.)   450;    Hadden  v. 

'  130  Mass.  412.  Spader,  20  Johns.  (N.  Y.)  554  ;  Abbott 

*  Citing  Taylor  v.    Jones  (1743),  2  v.  Tenney,  18  N.  H.  109;  Sargent  v. 

Atk.  600;   King  v.  Dupine  (1744),   2  Salmond,  27  Me.  539.     See  §§  17,  33. 


§  57 


PURCHASES    IN    NAME    OF    THIRD    PARTY, 


87 


tion  against  the  debtor,  and  recovered  by  the  purchaser  in 
ejectment,  or  in  fact,  whether  it  can  be  reached  by  any  pro- 
ceedings at  law.  Authorities  can  be  cited  to  the  effect  that 
an  execution  sale  of  land,  the  title  to  which  is  held  in  this 
manner,  passes  nothing  to  the  purchaser  ;  ^  the  creditor's 
proper  remedy  to  reach  it  is  declared  to  be  by  bill  in 
equity;^  the  grantee  is  considered  to  hold  the  title  im- 
pressed with  a  trust  in  favor  of  creditors,^  and  may  be  com- 
pelled to  quitclaim  his  interest/  The  principle  embodied 
in  these  authorities  seems  to  commend  itself  as  logical,  but 
it  is  not  universally  recognized.  There  are  cases  holding 
that  an  execution  purchaser  on  a  judgment  against  the 
debtor  may  recover  the  lands  in  ejectment,  even  though 
the  title  was  never  in  the  debtor,  if  it  is  shown  that  the 
fraudulent  grantee  held  it  for  the  debtor's  benefit,^  and  that 
such  an  interest  may  be  attached."  It  may  be  observed  that 
a  purchase  of  personal  property  by  a  debtor  in  the  name  of 


'  Mulford  V.  Peterson,  35  N.  J.  Law 
133;  Haggerty  v.  Nixon,  26  N.  J.  Eq. 
42;  Garfield  v.  Hatmaker,  15  N.  Y. 
475;  Dewey  v.  Long,  25  Vt.  564; 
Davis  V.  McKinney,  5  Ala.  719;  Web- 
ster V.  Folsom,  58  Me.  230  ;  Low  v. 
Marco,  53  Me.  45  ;  Jimmerson  v.  Dun- 
can, 3  Jones  (N.  C.)  Law  537  ;  Carlisle 
V.  Tindall,  49  Miss.  229;  Howe  v. 
Bishop,  3  Met.  (Mass.)  26.  See  Hamil- 
ton V.  Cone,  99  Mass.  478.  In  Niver 
V.  Crane,  98  N.  Y.  40,  it  was  decided 
that  the  fact  that  a  debtor  paid  the 
consideration  for  property  conveyed  to 
another  did  not  alone  authorize  a  judg- 
ment taking  the  property  to  satisfy  the 
debt.  Under  the  provision  of  the  stat- 
ute of  uses  and  trusts  (i  R.  S.  728,  §§  51, 
52),  which  declares  that  a  grant  made 
to  one  person,  the  consideration  for 
which  is  paid  by  another,  shall  be  pre- 
sumed fraudulent  as  against  the  credit- 
ors at  that  time  of  the  person  paying 
the  consideration,  and  where  fraudu- 
lent  intent   is    not  disproved,  a   trust 


shall  result  in  favor  of  such  creditors, 
to  make  out  such  a  trust  the  considera- 
tion must  be  paid  at  or  before  the  exe- 
cution of  the  conveyance.  See  Decker 
V.  Decker,  108  N.  Y.  128. 

-'  Mulford  V.  Peterson,  35  N.  J.  Law 

133- 

3  Garfield  v.  Hatmaker,  1 5  N.  Y.  475 ; 
Corey  v.  Greene,  51  Me.  114;  Sim- 
mons V.  Ingram,  60  Miss.  900. 

••  Cutter  V.  Griswold,  Walker's  Ch. 
(Mich.)  437.  Must  the  creditor  first 
recover  judgment  in  such  a  case  ?  See 
Ocean  Nat.  Bank  v.  Olcott.  46  N.  Y.  22. 
See  infra.  Chap.  IV. 

'  Kimmel  v.  McRight.  2  Pa.  St.  38; 
Tevis  V.  Doe,  3  Ind.  129;  Pennington 
v.  Clifton,  II  Ind.  162;  Guthrie  v. 
Gardner,  19  Wend.  (N.  Y.)  414.  Com- 
pare Wait  V.  Day,  4  Den.  (N.  Y.)  439 ; 
Brewster  v.  Power,  10  Paige  (N.  Y.) 
569;  Garfield  v.  Hatmaker,   15  N.  Y. 

477- 

'  Cecil    Bank    v.    Snively,    23    Md. 

253- 


88  RELIEF  BEFORE  AND  AFTER  SALE.    §§  58,  59 

a  third   party  does  not  exempt  it  from  direct  seizure  by 
creditors.^ 

§  58.  Relief  before  and  after  sale. — The  jurisdiction  of  a 
court  of  equity  is  ample  either  before  or  after  sale  under  a 
judgment,  to  set  aside  a  deed  made  in  fraud  of  creditors — 
before  sale  to  enable  the  creditor  to  present  and  sell  an  un- 
embarrassed title  ;  after  sale  to  remov'e  clouds  from  the 
title.^  It  will  thus  be  seen  how  important  the  jurisdiction 
of  equity  becomes  in  connection  with  fraudulent  transfers. 
It  would  often  be  impossible,  especially  in  cases  affectinor 
realty,  to  render  the  title  marketable  until  the  flexible  hand 
of  a  court  of  equity  had  removed  the  simulated  transfers 
and  incumbrances  in  which  the  debtor  has  involved  it. 
Equity  alone  can  disentangle  the  title  from  the  doubts  and 
embarrassments  which  interfere  with  a  realization  of  a  fair 
price  ;  and  to  that  extent  and  for  that  purpose  its  invaluable 
assistance  is  usually  asked.^  In  Rhead  v.  Hounson,*  the 
court  said  :  "  The  bill  must  be  construed  in  reference  to  its 
nature.  It  is  not  filed  to  reach  property  incapable  of  seiz- 
ure on  execution,  and  therefore  based  on  the  theory  that 
the  legal  remedy  has  been  exhausted.  Very  far  from  it. 
The  principle  on  which  it  proceeds  is  that  a  legal  remedy  is 
in  fact  progressing,  and  which,  being  fraudulently  ob- 
structed, the  aid  of  the  court  is  needed  to  remove  that 
obstruction.  The  claim  made  is  that  the  deed  from  the 
judgment-debtor  to  his  son  is  fraudulent  as  against  the 
creditor,  and  that  the  farm  is  therefore  subject  to  levy  and 
the  deed  exposed  to  be  removed  out  of  the  way  of  it  by  the 
assistant  jurisdiction  of  equity." 

§59.  The  remedy  at  law. — A  judgment -creditor  may 
proceed  at  law  to  sell  under  execution  lands  or  property 


'  Godding  v.  Brackett,  34   Me.  27.     See  Orendorf  v.  Budlong,  12  Fed.  Rep. 
See  §82.  25. 

'  Gall  man   v.  Perrie,  47   Miss.    131.         ^  Partee  v.  Mathews,  53  Miss.  146. 

^  46  Mich.  246. 


§  6o  BY    SUIT    AT    LAW    AND    IN    EQUITY.  89 

which  his  debtor  has  fraudulently  alienated,^  which  are  sub- 
ject to  execution.  The  attempted  transfer  may  be  treated 
as  a  nullity,  and  the  property  subjected  to  seizure  and  sale 
upon  execution  the  same  as  though  no  such  covinous  trans- 
fer had  ever  been  made.^  The  creditor  in  such  cases  may 
consider  the  debtor  as  still  the  owner  of  the  property,  and 
may  pursue  it  to  secure  satisfaction  of  the  claim  the  same 
as  though  the  title  were  unembarrassed  by  the  fraudulent 
deed  or  transfer.^  This  general  principle  was  involved  in 
Rinchey  v.  Stryker,'*  in  which  case  it  was  decided  that  where 
an  attachment  was  issued  to  asheriff  he  was  entitled  to  seize 
under  it  any  property  which  the  debtor  might  have  disposed 
of  with  intent  to  defraud  his  creditors ;  that  by  such  seizure 
a  specific  lien  was  acquired  upon  the  property  attached,  and 
the  sheriff,  when  sued  for  wrongfully  taking  the  property, 
had  a  right  to  show,  even  before  judgment  in  the  attach- 
ment suit,  that  the  title  of  the  purchaser  from  the  debtor 
was  fraudulent  and  voidable  as  against  the  attaching  creditor.^ 
§  60.  By  suit  in  equity. — Fraud  is  one  of  the  recognized 
subjects  of  equity  jurisdiction,    and  is  the    most    ancient 


'  Carter  v.  Castleberry,  5  Ala.  277  ;  to  creditors  ;  and  even  when  the  parlies 
Booth  V.  Bunce,  33  N.  Y.  139;  Henry  intend  an  irrevocable  disposition  of  the 
V.  Hinman,  25  Minn.  199;  Brown  v.  property,  but  the  conveyance  has  been 
Snell,  46  Me.  490 ;  Thomason  v.  Neeley,  made  with  the  intent  to  defraud  cred- 
50  Miss.  313;  Jacoby's  Appeal,  67  Pa.  itors,"  it  maybe  avoided.  Chandler  v. 
St.  434  ;  Allen  v.  Berry,  50  Mo.  90 ;  Von  Roeder,  24  How.  227  ;  Baldwin 
Fowler  v.  Trebein,  16  Ohio  St.  493;  v.  Peet,  22  Tex.  70S,  note.  In  Mas- 
Staples  v.  Bradley,  23  Conn.  167 ;  Foley  sachusetts,  jurisdiction  in  equity  is 
v.  Bitter,  34  Md.  646 ;  Gormerly  v.  limited  to  property  or  rijT;hts  which 
Chapman,  51  Ga.  421  ;  Russell  v.  Dyer,  cannot  be  attached  or  taken  on  execu- 
33  N.  H.  186.     But  see  §69.  tion.     Schleisinger    v.    Sherman,    127 

•*  Tupper  V.  Thompson,  26  Minn.  386  ;  Mass.  209. 
Henry  v.  Hinman,  25  Minn.  199  ;  S.  P.         ■*  26  How.  Pr.  (N.  Y.)  75  ;  S.  C.  31 

National    Park   Bank   v.  Lanahan,  60  N.  Y.  140. 
Md.  513.  '  See  Greenleaf  v.  Mumford,  30  How. 

'  Thomason  V.  Neeley,  50  Miss.  313.  Pr.    (N.    Y.)    30.    31.       But    compare 

It  has  been  observed  that  where  the  Thurber  v.  Blanck,  50  N.   V.  83.  with 

"deed  is  a  mere  pretence,  collusively  Mechanics' &  Traders' Hank  v.  Dakin, 

devised,  and  the  parties  do  not  intend  51  N.  Y.  519.     See  Lawrence  v.  Bank 

other  than  an  ostensible  change  of  the  of  the  Rcjjublic.  35  N.  Y.  320  ;  infra, 

property,  the  property  does  not  pass  as  §  81. 


90  BY    SUIT    IN    EQUITY.  §  6o 

foundation  of  its  power.'  The  existence  of  a  remedy  at 
law  does  not  interfere  with  the  right  of  a  creditor  to  resort 
to  a  court  of  equity  ^  to  secure  a  cancellation  of  a  fraudu- 
lent conveyance  as  an  obstacle  in  the  way  of  the  full  en- 
forcement of  a  judgment,  and  a  cloud  on  the  title  to  the 
property  sought  to  be  i cached.^  The  suit  in  equity  is  some- 
times said  to  be  an  ancillary  relief  in  aid  of  the  legal  remedy,* 
since  a  court  of  equity  does  not  intervene  to  enforce  the 
payment  of  debts.^  It  may  be  asked  why  resort  is  so  fre- 
quently had  to  a  creditor's  bill  seeking  a  decree  to  avoid  or 
cancel  the  covinous  transfer  when  the  property  may  be  more 
expeditiously  seized  under  attachment  or  execution.  The 
creditor's  bill,  or  a  suit  to  clear  the  fraudulent  transfer,  is, 
for  many  reasons,  entitled  to  preference  as  a  means  of  re- 
lief. Should  the  creditor  attempt  to  sell  the  disputed  prop- 
erty arbitrarily  under  execution  bidders  would  be  deterred 
from  purchasing  lest  they  should  buy  a  lawsuit,  hence  the 
market  value  of  the  land  embraced  in  the  covinous  transfer 
is  practically  destroyed.  Then  the  seizure  of  the  property 
subjects  the  creditor  to  the  peril  incident  to  proving  that 


'  Hartshorn  v.  Eames,  31    Me.   97  ;  its  object  the  removal  of  the  cloud  cast 

Story's  Equity,   §  68.     See  Warner  v.  upon   the  title  by  the  fraudulent  con- 

Blakeman,  4  Keyes  (N.  Y.)  507 ;  Logan  veyance.     The  removal  of  this   cloud 

V.  Logan,  22  Fla.  564.  was  in  the  interest  of  both  the  debtor 

-  See  §  51.  and  the  creditors  by  enabling  the  prop- 

^  Planters'  &  M.  Bank  v.  Walker,  7  erty   to   be   sold   at   a   better    price." 

Ala.  926  ;  Sheafe  v.  Sheafe,  40  N.  H.  Again,  it  has  been  observed  that  "  The 

516:  Dargan  v.  Waring,  11  Ala.  988  ;  creditor  has  not  only  a  right  to  have 

Cook   V.   Johnson,    12  N.   J.    Eq.  52;  the  property  subjected  to  the  payment 

Bean  v.  Smith,  2  Mason  253  ;   Hamlen  ofhis  judgment,  but  to  have  it  subjected 

V.  McGillicuddy,  62  Me.  269  ;  Waddell  in  such  manner  that  it  will  bring  its  fair 

V.  Lanier,  62  Ala.  347  ;  Traip  v.  Gould,  market  value."     Fowler  v.  McCartney, 

15  Me.  83;  Beaumont  v.  Herrick,  24  27  Miss.  510. 

Ohio  St.  456  ;  Sockman  v.  Sockman,  18  "*  See  McCartney  v.  Bostwick,  32  N. 

Ohio  368  ;  Musselman  v.  Kent,  33  Ind.  Y.  57. 

452  ;  Dockray  v.  Mason,  48  Me.  178.  "  Dunlevy  v.    Tallmadge,  32    N.  Y. 

In  Gormley  v.  Potter,  29  Ohio  St.  599,  459 ;  Voorhees   v.   Howard,   4   Keyes 

the    court    said  :    "  The   petition  was  (N.  Y.)  383  ;  Griffin  v.  Nitcher,  57  Me. 

founded  upon  the  fact  that  the  land  had  272  ;  Logan  v,  Logan,  22  Fla.  564.    See 

been  taken  in  execution,  and  had  for  §  73. 


§  60  BY    SUIT    IN    EQUITY.  9 1 

the  transfer  was  fraudulent,  and  in  the  event  of  failure  to 
establish  fraud,  of  paying  damages  for  the  unwarrantable 
interference,  seizure,  and  sale.  By  filing  a  creditor's  bill 
practically  the  only  risk  incurred  is  the  costs  and  expense  of 
the  suit,  for  generally  no  seizure  is  effected  unless  the  suit  is 
successful,  in  which  event  the  covinous  transfer  and  cloud 
on  the  title  is  cleared  away.  Then,  as  already  stated,  equity 
procedure  is  more  flexible  than  the  procedure  at  law,^  and 
in  equity  an  inequitable  transaction  not  absolutely  fraud- 
ulent in  the  full  sense  of  that  term  may  be  avoided  at  the 
suit  of  a  creditor.  Fraud  it  is  said  may  be  presumed  in 
equity  but  must  be  proved  at  law  ;^  but  this  is  a  loose  and 
unreliable  statement,  for  it  must  be  proved  in  either  forum. 
Courts  of  equity  it  is  true  will  act  upon  circumstances  in- 
dicating fraud  which  courts  of  law  might  scarcely  deem 
satisfactory  proofs  ;  and  will  grant  relief  upon  the  ground 
of  fraud  established  by  presumptive  evidence  of  such  char- 
acter as  courts  of  law  would  not  always  deem  sufficient  to 
justify  a  verdict.^  The  Supreme  Court  of  Pennsylvania,^ 
in  commenting  upon  the  applicability  of  equity  to  suits  in- 
volving fraudulent  alienations,  remark  :  "  It  is  especially 
adapted  to  this  class  of  cases.  Its  process  is  plastic  and 
may  be  readily  moulded  to  suit  the  exigencies  of  the  par- 
ticular case.  A  court  of  equity  proceeds  with  but  little  re- 
gard to  mere  form.  It  moves  with  celerity,  and  seizes  the 
fruits  of  a  fraud  in  the  hands  of  the  wrong-doer."     Having 


"  See  §  51.  give  reVief  ag&inst  prcsump/iw/mut/s, 

■^  King  V.  Moon,  42  Mo.  555.  and  therein  will  go  further  than  courts 

'See  Jackson  v.  King,  4  Cow.   (N.  of  law,  where  fraud  must  be  proved  and 

Y.)  207;  3  Greenl.  Ev.  §254;   i  Story's     not  presumed There  are  many 

Eq.  Jur.  §§  190-193.     "Fraud  is   not  instances  of  fraud  that  would  in  equity 

to  be  considered  as  a  simple  fact,  but  affect  instruments  in  wiiting  concern- 

a  conclusion  to  be  drawn  from  all  the  ing  lands,  of  which  the  law  could  not 

circumstances  of  the  case.     It  may  be  take  notice."     Burt  v.  Keyes,  i  Flipp. 

inferred  from  the  nature  of  the  contract  63.     Compare   United  States  v.  Am- 

itself,  or  from  the  condition  or  circum-  istad,  15  Pet.  594;    Lloyd  v.  Fulton,  91 

stances   of  the    parties.     The  general  U.  S.  483.     See  §15. 

principle  is  well  settled,  that  equity  will  ^  Fowler's  Appeal,  87  Pa.  St.  454. 


92  SUPPLEMENTARY    PROCEEDINGS.  §  6 1 

jurisdiction  for  one  purpose  equity  will  make  a  complete 
disposition  of  the  cause.^  Equity  endeavors  to  deal  with 
the  substance  of  affairs  ;  to  look  beyond  the  observance  of 
mere  forms  ;  ^  to  regulate  its  judgment  according  to  the  real 
purposes  which  controlled  parties  in  the  various  matters 
brought  before  it  for  relief  or  correction  ;  ^  to  tear  aside  the 
covering  beneath  which  the  perpetrators  of  the  fraud  seek 
concealment ;  to  deal  with  actual  facts,  not  with  pretexts 
and  disguises.  The  Supreme  Court  of  Illinois  say :  "Equity 
will  penetrate  beyond  the  covering  of  form,  and  look  at  the 
substance  of  a  transaction,  and  treat  it  as  it  really  and  in 
essence  is,  however  it  may  seem."  ^ 

Rules  of  pleading  in  equity  are  not  so  strict  in  matters 
of  form  as  at  law.^ 

§  6i.  Supplementary  proceedings. — Supplementary  pro- 
ceedings have,  in  New  York  and  in  some  of  the  other 
States  which  have  appropriated  its  reformed  system  of  pro- 
cedure, taken,  in  some  measure,  the  place  of  creditors' actions 
or  suits  in  equity  to  reach  equitable  assets.    This  remedy  is 

1  Manufacturing  Co.  v.  Bradley,  105  ^  Livermore  v.  McNair,  34  N.  J.  Eq. 
U.  S.  182;  Oelrichs  v.  Spain,  15  Wall.  482  ;  Buck  v.  Voreis,  89  Ind.  117. 
211;   Crane  v.  Bunnell,  10  Paige  (N.  ■*  Wadhams    v.    Gay,    73    111.    415, 
Y.)333;  Billups  V.  Sears,  5  Gratt.  (Va.)  435.     See  Gay  v.  Parpart,    106  U.  S. 
31  ;  Pearce  v.  Creswick,  2  Hare  296;  699. 

Martin  v.  Tidwell,  36  Ga.  345  ;  San-  ^  Birely's  Ex'rs  v.  Staley,  5  Gill  &  J. 

born  V.  Kittredge,  20  Vt.  632  ;  Souder's  (Md.)  432;   Ridgely  v.  Bond,   18  Md. 

Appeal,  57  Pa.  St.  498,  502  ;  Corby  v.  450 ;  Small  v.  Owings,  i  Md.  Ch.  367. 

Bean,  44  Mo.  379.  In  Warner  v.  Blakeman,  4  Keyes  (N. 

2  V/ right  V.  Oroville  M.  Co.,  40  Cal.  Y.)  507,  Woodruff,  J.,  said:  "  It  is  the 
20.  In  Buck  V.  Voreis,  89  Ind.  117,  just  and  proper  pride  of  our  matured 
Elliott,  J.,  said :  "  Forms  are  of  little  system  of  equity  jurisprudence  that 
moment,  for  where  fraud  appears  courts  fraud  vitiates  everj^  transaction;  and, 
will  drive  through  all  matters  of  form  however  men  may  surround  it  with 
and  expose  and  punish  the  corrupt  forms,  solemn  instruments,  proceed- 
act."  Of  course  equity  "  cannot  create  a  ings  conforming  to  all  the  details  re- 
title  where  none  exists."  ....  "  Cred-  quired  in  the  laws,  or  even  by  the 
itors  can  work  out  equities  only  through  formal  judgment  of  courts,  a  court  of 
the  rights  of  the  parties  where  there  is  equity  will  disregard  them  all,  if  neces- 
no  fraud."  Rush  v.  Vought,  55  Pa.  St.  sarj-,  that  justice  and  equity  may  pre- 
438,  444,  quoted  in  Curry  v.  Lloyd,  22  vail." 

Fed.  Rep.  265. 


§  6l  SUPPLEMENTARY    PROCEEDINGS. 


93 


now  a  special  proceeding  in  New  York,^  and  not  a  pro- 
ceeding in  the  original  action.  These  proceedings  furnish, 
to  a  certain  extent,  a  substitute  for  a  creditor's  bill,'^  for  the 
discovery  and  sequestration  of  property,'^  and  by  their  com- 
mencement a  lien  is  said  to  be  acquired  upon  the  debtor's 
equitable  assets,"*  though  another  creditor  may  gain  prece- 
dence if,  after  the  service  of  the  order  for  the  examination 
of  the  debtor,  and  before  the  appointment  of  a  receiver,  he 
discovers  property  liable  to  execution  and  levies  upon  it.^ 
Generally  speaking  these  proceedings  will  reach  whatever 
property  is  available  on  a  creditor's  bill,'^  and  have,  as  we 
have  seen,  been  held  to  be  a  simple  substitute  for  it,~  and 
are  entitled  to  all  the  presumptions  of  regularity  which 
appertain  to  proceedings  in  courts  of  general  jurisdiction."* 
Supplementary  proceedings  are  not  exclusive.'  The  judg- 
ment-creditor may  abandon  them  and  institute  a  suit  in  his 
own  name  to  annul  a  fraudulent  alienation,^"  if  indeed  he 
may  not  invoke  both  remedies  at  the  same  time."  If  a  third 
party  makes  claim  to  any  property  which  the  examination 

'  N.  Y.  Code  Civ.  Pro.,  §  2433.   Com-  is   not  divested   by  the  death  of  the 

pare  West  Side  Bank  v.  Pugsley,  47  N.  debtor  it  cannot  be  enforced  in  a  Sur- 

Y.  368.  rogate's  Court  unless  prior  to  the  death 

^  Spencer  v.  Cuyler,  9  Abb.  Pr.  (N.  a  receiver  was  appointed  or  an  order 

Y.)  382 ;  People  v.  Mead,  29  How.  Pr.  was  made  directing  the  application  of 

(N.  Y.)  360 ;  Pope  v.  Cole,  64  Barb.  (N.  the  debtor's  property  to  the  satisfaction 

Y.)  409;  affi'd,  55  N.  Y.   124.     Com-  of  the  judgment.     Billings  v.  Stewart, 

pare  Catlin  v.  Doughty,   12  How.  Pr.  4  Dem.  (N.  Y.)  265. 
(N.  Y.)  459.  '  Becker  v.  Torrance,  31    N.  Y.  631. 

^  Becker  v.  Torrance,  31  N.  Y.  631  ;  See  Davenport  v.  Kelly,  42  N.  Y.  193. 
Billings   V.  Stewart,  4   Dem.    (N.  Y.)         "*  Banies  v.  Morgan,  3  Hun  (N.  Y.) 

269.  703;  Barker  v.  Dayton,  28  Wis.  367. 

*  Lynch  v.  Johnson,  48    N.   Y.  33 ;         ■"  Lynch  v.  Johnson,  48  N.  Y.  33  ; 

Storm  v.  Waddell,  2  Sandf.  Ch.  (N.  Y.)  Smith  v.  Weeks,  60  Wis.  100.     Com- 

494;  Brown  v.  Nichols,  42  N.  Y.  26;  pare  Williams  v.  Thorn,  70  N.  Y.  270. 

Edmonston  v.  McLoud,  16  N.  Y.  544;  See  §45. 

Billings  v.  Stewart,  4  Dem.  (N.  Y.)  268.         '  Wright  v.  Nostrand.  94  N.  Y.  31. 
Compare  Dubois  v.  Cassidy,  75  N.  Y.         *  N^'illiams  v.  Sexton,  19  Wis.  42. 
300;  Campbell  V.  Genet,  2  Hilt.  (N.  Y.)         "'Bennett  v.  McGuire,  58  Barb.  (N. 

290;    Robinson  v.  Stewart,    10  N.  Y.  Y)  625. 

196.    Although  the  lien  acquired  by  the         "Gates  v.  Young,  17  Weekly  Dig. 

judgment-creditor  in  these  proceedings  (N.  Y.)  551.     See  §§51,  65. 


94 


SUPPLEMENTARY    PROCEEDINGS. 


§6i 


discloses,  the  rights  of  the  claimants  cannot  be  determined 
in  this  proceeding,  but  resort  must  be  had  to  a  suit.^  The 
procedure  is  usually  by  order,  made  upon  proof  of  the  re- 
turn of  an  execution  unsatisfied,  requiring  the  debtor  to 
appear  in  person  in  court,  to  be  examined  concerning  his 
property.^  The  judgment  upon  which  the  order  is  pro- 
cured must  be  in  pc7^sona77i?  Property  or  equitable  assets 
being  thus  disclosed,  a  receiver  is  appointed,  who,  upon 
qualifying,  becomes  vested  with  the  debtor's  assets  and 
equitable  interests,  without  conveyance  or  assignment,'* 
though  he  does  not  get  title  to  exempt  property.^  The 
receiver  represents  creditors,  and  thus  may  impeach  the 
debtor's  fraudulent  sales  ^  in  the  right  of  creditors.  It  seems 
to  be  no  objection  to  the  exercise  of  the  jurisdiction  ap- 
pointing a  receiver  that  the  debtor  has  no  assets,'^  or  that 
such  property  as  he  is  possessed  of  is  subject  to  execution.^ 


1  West  Side  Bank  v.  Pugsley,  47  N. 
Y.  372  ;  Bennett  v.  McGuire,  58  Barb. 
(N.  Y.)  634;  Rodman  v.  Henry,  17  N. 
Y.  484 ;  Sebrauth  v.  Dry  Dock  Savings 
Bank,  20  Alb.  L.  J.  197.  Supplement- 
ary proceedings  may  be  instituted  be- 
fore a  judge  of  a  Federal  court,  on  a 
judgment  at  law  recovered  in  the 
United  States  Courts.  Ex  parte '^o\d., 
105  U.  S.  647.  Compare  Senter  v. 
Mitchell,  5  McCra.  147.  But  the  ex- 
amination cannot  be  held  in  a  State 
court  upon  a  Federal  judgment.  Tomp- 
kins v.  Purcell,  12  Hun  (N.  Y.)  662. 
Compare  Goodyear  Vulcanite  Co.  v. 
Frisselle,  22  Hun  (N.  Y.)  175. 

-  Bartlett  v.  McNeil,  49  How.  Pr.  (N. 
Y.)  55  ;  affi'd,  60  N.  Y.  53. 

»  Bartlett  v.  McNeil,  3  Hun  (N.  Y.) 
221.  Compare  Schwinger  v.  Hickok, 
53  N.  Y.  280. 

*  Porter  v.  Williams,  9  N.  Y.  142 ; 
Cooney  v.  Cooney,  65  Barb.  (N.  Y.) 
524 ;  Bostwick  v.  Menck,  40  N.  Y.  383. 

*  Cooney  v.  Cooney,  65  Barb.  (N.  Y.) 
525;  Hudson  V.  Plets,  11  Paige  (N.  Y.) 


180;  Andrews  v.  Rowan,  28  How.  Pr. 
(N.  Y.)  126.  See  Tillotson  v.  Wolcott, 
48  N.  Y.  190;  Hancock  v.  Sears,  93 
N.  Y.  79. 

^  Dollard  v.  Taylor,  33  N.  Y,  Super. 
498  ;  Bostwick  v.  Menck,  40  N.  Y.  384 ; 
Porter  v.  Williams,  9  N.  Y.  142. 

''  See  Browning  v.  Bettis,  8  Paige  (N. 
Y.)  568 ;  Bloodgood  v.  Clark,  4  Paige 
(N.  Y.)  574 ;  Shainwald  v.  Lewis,  6 
Fed.  Rep.  776.  Monell,  J.,  held,  in 
Dollard  v.  Taylor,  33  N.  Y.  Superior 
Ct.  496,  that  where  the  only  purpose  of 
appointing  a  receiver  in  supplementary 
proceedings  was  to  attack  a  fraudulent 
assignment,  the  application  was  prop- 
erly denied,  as  the  judgment-creditor 
could  himself  file  a  bill  for  that  purpose, 
and  in  a  proper  case  secure  a  receiver 
pending  the  suit. 

«  Bailey  v.  Lane,  15  Abb.  Pr.  (N.  Y.) 
373,  in  note.  The  order  in  supplementary 
proceedings  usually  forbids  the  debtor 
from  making  a  transfer  of  his  property 
until  further  directions;  but  in  New 
York  his  earnings  within  sixty  days  of 


§62  ASSUMPSIT CASE CONSPIRACY.  95 

As  an  illustration  of  the  utility  of  this  remedy  it  may  be 
stated  that  a  widow's  unassigned  right  of  dower  can  be 
reached  by  her  creditors  in  supplementary  proceedings,^  for 
it  is  liable  to  their  claims,^  and  a  receiver  appointed  in  these 
proceedings  may  bring  an  action  for  its  admeasurement.^ 

§  62.  Assumpsit — Case — Conspiracy. — A  fraudulent  assign- 
ment will  not  ordinarily  authorize  a  judgment  against  the 
purchaser  for  the  original  debt;''  nor  is  an  action  on  the 
case  considered  to  be  an  appropriate  form  of  procedure 
against  the  debtor  and  his  fraudulent  alienee.  The  latter 
form  of  action  is  discussed  at  much  length  in  Lamb  v. 
Stone,^  and  the  language  of  the  court  is  quoted  with  ap- 
proval by  the  learned  and  lamented  Mr.  Justice  Campbell  in 
Adler  v.  Fenton,^  as  follows:  "The  plaintiff  complained  of 
the  fraud  of  the  defendant  in  purchasing  the  property  of 
his  absconding  debtor,  in  order  to  aid  and  abet  him  in  the 
fraudulent  purpose  of  evading  the  payment  of  his  dcl)t. 
The  court  ask,  what  damage  has  the  plaintiff  sustained  by 
the  transfer  of  his  debtor's  property  ?  He  has  lost  no  lien, 
for  he  had  none.  No  attachment  has  been  defeated,  for 
none  had  been  made.  He  has  not  lost  the  custody  of  iiis 
debtor's  body,  for  he  had  not  arrested  him.  He  has  not 
been  prevented  from  attaching  the  property,  or  arresting 
the  body  of  his  debtor,  for  he  had  never  procured  any  writ 

the  commencement  of  the  proceedings  ^  Payne  v.  Becker,  87  N.  Y.  153. 
are  exempt,  and  it  is  not  considered  a  See  Stewart  v.  McMartin,  5  Barb.  (N. 
contempt  of  the  court's  order  for  him  Y.)  438.  It  may  be  noted  in  conclud- 
to  apply  them  to  the  support  of  his  ing  this  section  that  an  attorney  em- 
family.  Hancock  v.  Sears,  93  N.  Y.  79  ;  ployed  to  collect  a  claim  has  authority 
Newell  V.  Cutler,  19  Hun  (N.  Y.)  74,  is  to  institute  supplementary  proceedings, 
overruled.  The  salary  of  a  municipal  but  is  not  authorized  under  the  original 
officer  cannot  be  reached  in  these  pro-  retainer  to  direct  the  receiver  to  insti- 
ceedings.  Waldman  v.  OT3onneli,  57  tute  an  action  to  annul  a  fraudulent 
How.  Pr.  (N.  Y.)  215.  But  examine  transfer.  Ward  v.  Roy,  69  N.  Y.  96. 
Singer  V.  Wheeler,  6  111.  App.  225.  *  Aspinall  v.  Jones,  17  Mo.  212.     See 

'  Strong  V.  Clem,  12  Ind.  37;  Payne  Chap.  XL 

V.  Becker,  87  N.  Y.  153.  '11  Pick.  (Mass.)  527. 

2  Tompkins  v.  Fonda,  4  Paige  (N.  Y.)  *■■  24  Howard  412. 
448. 


96  ASSUMPSIT CASE — CONSPIRACY.  §  62 

of  attachment  against  him.  He  has  lost  no  claim  upon,  or 
interest  in  the  property,  for  he  never  acquired  either.  The 
most  that  can  be  said  is,  that  he  intended  to  attach  the 
property,  and  the  wrongful  act  of  the  defendant  has  pre- 
vented him  from  executing  this  intention On  the 

whole,  it  does  not  appear  that  the  tort  of  the  defendant 
caused  any  damage  to  the  plaintiff.  But  even  if  so,  yet  it 
is  too  remote,  indefinite,  and  contingent,  to  be  the  ground 
of  an  action."  Many  cases  might  be  cited  to  the  same 
general  effect.^  In  an  action  on  the  case  for  conspiracy 
which  arose  in  Rhode  Island,^  the  plaintiffs,  who  were  sim- 
ple contract  creditors,  claimed  that  the  defendants  and  the 
debtor  had  combined  together  to  prevent  plaintiffs  and 
other  creditors  from  obtaining  payment  of  their  debts  ; 
that  the  debtor,  among  other  things,  had  made  fictitious 
mortofaofes  to  the  defendants  under  cover  of  which  the  lat- 
ter  had  secreted  the  property  and  removed  it  out  of  the 
debtor's  possession,  so  that  plaintiffs  were  prevented  from 
attaching  it,  and  had  thus  lost  their  claims.  The  court 
ruled  that  the  action  could  not  be  maintained.^    "A  simple 


'  Smith  V.  Blake,  i  Day  (Conn.)  258 ;  inasmuch  as  the  creditor  has,  not  an 

Moody  V.  Burton,  27  Me.  427 ;  Gardi-  assured  right,  but  simply  a  chance  of 

ner  v.  Sherrod,  2  Hawks  (N.  C.)  173  ;  securing  his  claim  by  attachment  or 

Kimball  v.  Harman,  34  Md.  407  ;  Aus-  levy,  which  he  may  or  may  not  succeed 

tin  V.  Barrows,  41  Conn.  287 ;  Green  in  improving.     It  is  impossible  to  find 

V.  Kimble,  6  Blackf.  (Ind.)  552  ;  Well-  any  measure  of  damages  for  the  loss 

ington  V,  Small,  3  Gush.  (Mass.)  146  ;  of  such  a  mere  chance  or  possibility. 

Bradley    v.    Fuller,    118    Mass.    239;  Another  ground,  added  in  some  of  the 

Mowry  v.  Schroder,  4  Strob.   (S.  C.)  cases,  is  that  no  action  would   lie  in 

Law  69.  favor  of 'such  a  creditor  against  the 

^  Klous  V.  Hennessey,  13  R.  I.  335.  debtor  for  putting  his  property  beyond 

'  Chief- Justice  Durfee  said  :  "  There  the  reach  of  legal  process,  if  the  debtor 

is   some   conflict  of  authority  on  the  were  to  do  it  by  himself  alone,  and 

question  thus  raised,  but  the  more  nu-  that  what  would  not  be  actionable  if 

merous,  and,  we  think,  the  better  rea-  done  by  himself  alone,  cannot  be  ac- 

soned  and  stronger  cases  are  against  tionable  any  the  more  when  done  by 

the  action.     The  principal  ground  of  him  with  the  assistance  of  others.    The 

decision  in  these  cases  is  that  the  dam-  first  of  these   grounds,  which   is  the 

age,  which  is  the  gist  of  the  action,  is  fundamental  one,  and  has  been  chiefly 

too  remote,  uncertain,  and  contingent,  relied   on,    has    been    so    exhaustively 


§  62  ASSUMPSIT — CASE — CONSPIRACY.  97 

conspiracy,"  says  Nelson,  'J.,  in  Hutchins  v.  Hutchins,^ 
"  however  atrocious,  unless  it  resulted  in  actual  damage  to 
the  party,  never  was  the  subject  of  a  civil  action,  not  even 
when  the  old  form  of  a  writ  of  conspiracy,  in  its  limited 
and  most  technical  character,  was  in  use."  Yet  authority 
can  be  cited  tending  to  uphold  a  recovery  in  such  cases. 
In  Meredith  v.  Johns,^  it  appeared  that  an  action  of  tort 
had  been  brought,  and  a  verdict  for  ;^500  rendered,  against 
a  third  party,  for  secretly  and  maliciously  taking,  carrying 
away,  and  concealing  the  slaves  and  property  of  one  Peter 
May  (against  whom  the  plaintiff  had  a  cause  of  action), 
and  also  for  aiding,  assisting,  and 'counselling  May  to  ab- 
sent himself,  to  the  end  that  the  creditor  might  be  pre- 
vented from  recovering  against  him.  The  Supreme  Court 
of  Appeals  of  Virginia  declined  to  interfere  in  equity  to 
restrain  the  enforcement  of  the  judgment,  and  took  the 
position  that  the  defense  was  a  legal  one,  and  that  the 
party  aggrieved  must  seek  redress  in  a  law  court.  It  seems, 
however,  to  have  approved  the  procedure.^  The  case  of 
Quinby  v.  Strauss,^  of  which  the  reports  are  meagre  and 
unsatisfactory,  is  another  illustration.  The  action  was  in- 
stituted by  judgment-creditors  of  one  of  the  defendants 
against  such  defendant  and  his  attorney,  charging  them 
with  having  fraudulently  conspired  together  to  keep  the 
debtor's  personal  property  out  of  the  reach  of  his  creditors 
by  the  execution  of  chattel  mortgages  thereon  to  secure 
fictitious  debts,  one  of  them  to  the  attorney,  under  which 
the  property  had  been  sold  and  bid  off  in  the  attorney's  in- 
terest. The  property  so  sold  exceeded  in  value  the  amount 
of  the  creditor's  judgment.     The  jury  found  that  there  was 


analyzed  and  discussed   in  the  cases  ■••  i  H.  &  M.  (Va.)  595. 

that  it  is  impossible  for  us  to  add  any-  ^  Compare  Mott  v.  Danforth,6Watts 

thing  to  the  reasons  adduced  in  sup-  (Pa.)  307  ;  Penrod  v.  Morrison,  2  P.  & 

port  of  it."     Klous  v.  Hennessey,  13  W.  (Pa.)  126. 

R.  I.  335.  ^  90  N.  Y.  664. 
'  7  Hill  (N.  Y.)  107. 
7 


98         RELIEF  COLLATERAL  TO  MAIN  ACTION.   §§  62a,  63 

a  conspiracy  and  the  judgment  was  upheld,  the  appellate 
court  saying  that  as  the  property  appropriated  by  the  attor- 
ney to  his  own  use  exceeded  in  value  the  amount  of  the 
creditor's  claim,  it  was  but  just  that  he  should  pay  the 
creditor  whose  demand  he  had  sought  to  defeat.  The 
point  that  nominal  damages  only  could  be  awarded  was 
expressly  overruled.  The  recovery  in  this  case  must,  how- 
ever, be  rested  upon  the  ground  that  the  attorney  had  a 
sufficient  amount  of  the  debtor's  property  in  his  hands  to 
satisfy  the  complaining  creditor's  claim.  In  such  a  case  the 
rule  that  only  nominal  damages  are  recoverable  is  not  con- 
trolling. 

§  62a.  Reference  not  ordered. — In  New  York  State  an 
action  to  set  aside  a  fraudulent  conveyance  will  not  be  re- 
ferred. Gilbert,  J.,  said  :  "  References  are  proper  only  as 
aids  to  facilitate  the  transaction  of  business.  The  grrowino: 
multiplication  of  them  within  the  last  fifteen  years  has  been 
an  evil  prolific  of  individual  injustice  and  public  alarm."  ^ 

§  63.  Relief  collateral  to  main  action. — The  rule  is  estab- 
lished in  New  York  that  in  surplus-money  proceedings  in 
a  foreclosure  suit,  the  referee  has  the  authority  to  inquire 
as  to  the  validity  of  liens  or  conveyances,  and  they  may  be 
attacked  as  fraudulent.^  In  a  reference  as  to  title  in  parti- 
tion, a  party  can  assail  a  mortgage  held  by  another  party  on 
the  ground  that  it  is  fraudulent  and  void  as  against  credit- 
ors.^ It  is  asserted  that  no  good  reason  exists  why  the 
fraudulent  character  of  conveyances  cannot  be  tested  in 
such  proceedings.  When  the  jurisdiction  of  equity  is  once 
acquired,  the  court  has  the  right  to  proceed  to  the  end  and 
administer  complete   justice    between    the    parties."^     This 

'  Bushnell  v.  Eastman,  2  Abb.  Pr.  N.  Barb.  (N.  Y.)  618 ;  Fliess  v.  Buckley,  90 

,.S.  (N.  Y.)4ii.  N.  Y.  292. 

^  Bergen  v.  Carman,  79  N.  Y.  147  ;        ^  Halsted  v.  Halsted,  55  N.  Y.  442. 
S.  C.  I   Am.  Insolv.  Rep.  341.      Com-        "•  Manufacturing  Co.  v.  Bradley,  105 

pare  Schafer  v.  Reilly,   50  N.  Y.  61  ;  U.  S,  182;  Oelrichs  v.  Spain,  15  Wall. 

Mutual    Life    Ins.    Co.   v.   Bovven,   47  211;  Martin  v.  Tidwell,  36  Ga.  345; 

Souder's  Appeal,  57  Pa.  St.  498, 502. 


§  64         REMEDY  GOVERNED  BY  LEX  FORI.  99 

practice  is  considered  more  convenient  for  the  disposition 
of  cases  of  this  character,  and  avoids  the  tedious  process  and 
increased  expense  incident  to  a  distinct  and  separate  action 
instituted  for  that  purpose.  Again,  actions  in  aid  of  an 
execution  at  law  are  ancillary  to  the  original  suit,  and  are, 
in  effect,  a  continuance  of  the  suit  at  law  to  obtain  the 
fruits  of  the  judgment,  or  to  remove  obstacles  to  its  en- 
forcement.^ Usually  the  titles  of  adverse  claimants  cannot 
be  litigated  in  foreclosure.'^ 

§  64.  Remedy  governed  by  lex  fori. — In  a  case  already 
cited  v^^hich  arose  in  Massachusetts,^  it  was  said  that  the 
law  of  New  York  respecting  fraudulent  conveyances  was 
the  same  as  the  common  law  and  the  law  of  Massachusetts  ; 
and  that  although  choses  in  action  could  not  be  attached  or 
levied  upon  in  New  York,  yet  after  execution  issued  on 
the  judgment  at  law,  such  interests  might  be  reached  by 
supplementary  proceedings ;  while  in  Massachusetts  these 
kinds  of  rights  were  subject  to  trustee  process.  The  court 
said  that  the  assignment  having  been  found  by  the  judge, 
before  whom  the  case  was  tried  without  a  jury,  to  have 
been  made  in  fraud  of  the  plaintiff,  as  a  creditor  of  the 
assignor,  and  being  under  the  law  of  either  State  voidable 
by  creditors  in  some  form  of  judicial  process,  the  question 
whether  it  should  be  relieved  against  on  the  common  law. 
or  on  the  equity  side  of  the  court,  was  a  question  of  remedy 
only,  and  governed  by  the  lex  fori}  It  may  be  observed 
that  the  general  rule  that  the  lex  fori  governs  the  remedy 
controls  the  right  to  arrest  the  debtor.  Thus  where  goods 
were  sold  in  New  York  on  credit  to  parties  who  transacted 

'  Claflin  V.  McDermott,  12  Fed.  Rep.  mules    that    took    place   in   Virginia, 

375  ;  S.  C.  20  Blatchf.  522.  where  the  stock  was  subsequently  sent 

'•*  Kinsley  v.  Scott,  58  Vt.  470 ;  Mer-  to  Pennsylvania  for  pasturage,  and  was 

chants' Bank  V.  Thomson,  55  N.  Y.  11;  there  seized  on  a  foreign  attachment 

Lewis  V.  Smith,  9  N.  Y.  514.  against  the  vendor,  it  was  held  that  the 

'  Drake  v.  Rice,  130  Mass.  413.   See  validity  of  the  transfer  must  be  tested 

§  17.  by  the  laws  of  Virginia.    Born  v.  Shaw, 

•*  In  the  case  of  a  sale  of  horses  and  29  Pa.  St.  288. 


lOO  REMEDY  GOVERNED  BY  LEX  FORI.         §  64 

business  in  Alabama,  and  the  debtors  subsequently  disposed 
of  their  property  in  the  latter  State  with  intent  to  defraud 
their  creditors,  the  New  York  Supreme  Court  held  that  an 
order  of  arrest  was  properly  issued  against  the  defendants 
by  that  court.^  In  Pritchard  v.  Norton,'^  the  court  said  : 
"  The  principle  is  that  whatever  relates  merely  to  the 
remedy,  and  constitutes  part  of  the  procedure,  is  deter- 
mined by  the  law  of  the  forum,  for  matters  of  process  must 
be  uniform  in  the  courts  of  the  same  country  ;  but  what- 
ever goes  to  the  substance  of  the  obligation,  and  affects  the 
rights  of  the  parties,  as  growing  out  of  the  contract  itself, 
or  inhering  in  it  or  attached  to  it,  is  governed  by  the  law 
of  the  contract."^  It  is  foreign  to  the  scope  of  this  treatise 
to  discuss  at  length  the  question  of  how  far  a  transfer  of 
personal  property,  which  is  lawful  in  the  owner's  domicil, 
will  be  respected  in  the  courts  of  the  country  where  the 
property  is  located,  and  where  a  different  rule  as  to  transfer 
prevails.  This  is  a  question  upon  which  the  courts  are  much 
at  variance.  It  must  be  remembered  that  there  is  no  abso- 
lute right  to  have  such  a  transfer  respected  in  the  foreign 
forum,  and  it  is  only  on  a  principle  of  comity  that  it  is  ever 
allowed,  x-lnd  this  principle  of  comity  always  yields  in 
cases  where  the  laws  and  policy  of  the  State  in  which  the 
property  is  located  have  prescribed  a  different  rule  of  trans- 
fer from  that  of  the  State  in  which  the  owner  lives.* 


1  Claflin  V.  Frenkel,  3  Civ.  Pro.  (N.  ell,  35  N.  Y.  657 ;  Ockerman  v.  Cross, 

Y.)  109 ;  Brown  v,  Ashbough,  40  How.  54  N.  Y.  29 ;  Howard  Nat.  Bk.  v.  King, 

Pr.  (N.  Y.)  226.    See  §  191.   A  fraudu-  10  Abb.  N.  C.  (N.  Y.)  346;  People  ex 

lent  disposition  of  property  in  Pennsyl-  re/.  Hoyt  v.  Commissioners  of  Taxes, 

vania  may  be  made  the  subject  of  at-  23  N.  Y.  225  ;  Chafee  v.  Fourth  Nat. 

tachment  in  New  York.  Kibbe  v.  Wet-  Bank,  71   Me.  514,  and  cases  cited  in 

more,  31  Hun  (N.  Y.)  424.  the  arguments  of  counsel.    There  is  no 

*  106  U.  S.  129.  presumption  that  the  common  law  pre- 

^  See  McDougall  v.  Page,  55  Vt.  187;  vails  in  Russia  (Savage  v.  O'Neil,  44  N. 

S.  C.  28  Alb.  L.  J.  372.  Y.  300), — a  presumption  of  its  existence 

^  Green  v.  Van  Buskirk,  7  Wall.  151  ;  is  indulged  by  the  courts  only  in  refer- 

reversing,  s.  C.  sttd  nomitte.  Van  Bus-  ence  to  England  and  the  States  which 

kirk  v.  Warren,  4  Abb.  App.  Dec.  (N.  have  taken  the  common  law.     In  the 

Y.)  457.    Compare  Guillander  v.  How-  absence  of  proof  of  the  foreign  law,  the 


^  65  CUMULATIVE  REMEDIES.    '  lOI 

§  65.  Cumulative  remedies  allowed  and  disallowed. — We 
have  disclaimed  the  consideration  of  frand  in  the  lisfht  of  a 
crime,-  and  entertain  no  design  of  noticing  the  penal  stat- 
utes enacted  for  the  punishment  of  fraudulent  insolvents  or 
their  co-conspirators.  This  subject  more  legitimated  ap- 
pertains to  a  treatise  on  criminal  law,^  and  is  a  matter  regu- 
lated by  statute.  Sometimes  resort  to  the  penal  statutes 
conflicts  with  the  pursuit  of  the  civil  remedy.  In  a  con- 
troversy which  arose  in  Maine  it  was  decided  that  one  who 
had  commenced  an  action  to  recover  the  penalty  provided 
by  the  Revised  Statutes'^  of  that  State,  for  knowingly  aiding 
a  debtor  in  the  fraudulent  transfer  of  his  property  to  secure 
it  from  the  creditors,  waived  his  right  to  prosecute  his  suit 
by  filing  a  petition  against  his  debtor  and  having  him  de- 
clared a  bankrupt,  and  then  causing  a  suit  to  be  commenced 
against  the  alleged  fraudulent  transferee  by  the  assignee  in 
bankruptcy,  to  recover  the  value  of  the  property  alleged  to 
have  been  fraudulently  transferred.^  As  to  civil  remedies 
it  was  decided  in  Michigan  that  where  a  judgment-creditor 
had  elected  to  treat  as  fraudulent  a  conveyance  made  by  his 
debtor  before  the  judgment,  and,  notwithstanding  the  trans- 
fer of  title,  had  proceeded  to  sell  the  property  on  an  execu- 
tion, he  could  not  afterward  maintain  a  bill  in  equity  to  set 
aside  the  conveyance.^  The  logic  of  this  ruling  is  scarcely 
apparent.  Again,  a  creditor  who  has  instituted  an  action 
at  law  for  the  recovery  of  a  debt,  and  levied  an  attacbment, 
cannot,  before  judgment,  bring  a  second  suit  to  recover 
the  debt,  annul  an  alleged  fraudulent  judgment  recovered 
against  the  debtor,  and   restrain   its  collection."     In    \cw 

law  of  the  forum  must  furnish  the  rule  of  the  statute.     State  v.  Miller,  98  Iml. 

for  the  guidance  of  the  courts.    Savage  70. 

V.  O'Neil,  44  N.  Y.  301  ;   Monroe  v.  =*€.  113,  §51. 

Douglass,  5  N.  Y.  447.  ••  Fogg  v.  La\vr>',  71  Me.  215. 

'See  §3.  '  Cranson   v.  Smith,  47   Mich.   647. 

-  An  indictment  alleging  the  making  But   see   Erickson  v.  Quinn.  15   Ahb. 

of  a  fraudulent  conveyance  is  sufficient  Pr.  N.  S.  (N.  Y.)  168. 

where  its  recitals  charge  the  language  *  Mills  v.  Block,  30  Barb.  (N.  Y.) 

549.    See  §85. 


I02  IMPRISONMENT    OF    DEBTOR.  §§  66,   67 

York,  on  the  other  hand,  a  complainant  may  institute  sup- 
plementary proceedings  and  prosecute  a  suit  to  establish 
his  judgment  as  a  lien  upon  real  estate;  he  may  prosecute 
either  or  both  proceedings  until  his  judgment  is  satisfied.^ 
So  he  may  bring  a  creditor's  action  to  remove  a  cloud  upon 
title,  and  also  sell  the  debtor's  land  under  execution.^  And 
in  Massachusetts  a  remedy  is  given  by  statute,^  which 
enables  a  creditor  to  maintain  a  bill  to  reach  equitable  as- 
sets, without  having  previously  recovered  a  judgment  at 
law,  and  without  admitting  other  creditors  to  join  in  pros- 
ecuting the  suit.  It  was  decided  that  this  remedy  was  not 
superseded  by  the  grant  of  general  equity  powers.^ 

§  66.  Effect  of  imprisonment  of  debtor. — It  may  be  consid- 
ered as  settled  law  that  while  the  creditor  has  the  body  of 
the  debtor  in  execution  on  a  ca.  sa.  his  right  to  proceed 
against  property  is  suspended.  So  long  as  the  defendant 
is  in  custody  the  creditor  cannot  file  a  bill  in  chancery  to 
reach  his  equitable  assets.^  This  rule  proceeds  upon  the 
theory  that  the  arrest  and  imprisonment  of  the  debtor  con- 
stitute a  satisfaction  of  the  judgment  during  the  continu- 
ance of  the  imprisonment.^ 

§  67.  Election  of  remedies. — In  Cone  v.  Hamilton, ''^  the 
Supreme  Court  of  Massachusetts  said  it  had  been  decided 
in  that  State  that  levies  of  executions  in  favor  of  creditors 
passed  no  title  where,  at  the  time  of  the  conveyance  (which 
was  before  the  Stat,  of  1844,  c.  107,  took  effect),  there  was 
no  statute  by  which  land  paid  for  and  occupied  by  a  debtor, 
the  leo;al  title  to  which   had  never  been  in  him,  but  had 


'  Gates  V.  Young,  17  Weekly  Dig.  321 ;  King  v.  Trice,  3   I  red.   Eq.  (N. 

(N.Y.)55i.  C.)573- 

^  Erickson  v.  Quinn,  15  Abb.  Pr.  N.  «  Koenig  v.  Steckel,   58  N.  Y.  475; 

S.  (N.  Y.)  166.  Bowe  v.  Campbell,  63  How.  Pr.  (N. 

^  Gen'l  Stat.,c.  113,  §2,  sub.  11.  Y.)  170;  Ryle  v.  Falk,  24  Hun  (N.  Y.) 

■*  Barry  v.  Abbot,  100  Mass.  396.  255.      Compare,  especially,  Kasson  v. 

*  Stilwell  V.  Van  Epps,  i  Paige  (N.  People,  44  Barb.  (N.  Y.)  347. 

Y.)  615;  Tappan  v.  Evans,  11  N.  H.  '  102  Mass.  57. 


§  6/  ELECTION    OF    REMEDIES.  IO3 

been  conveyed  by  his  procurement  to  other  persons  in 
order  to  secure  it  from  his  creditors,  could  be  attached  or 
taken  on  execution  at  law  as  his  property.^  Gray,  J.,  con- 
tinuing, said  :  "  Upon  this  state  of  facts,  either  of  two  rem- 
edies was  opened  to  the  judgment-creditors.  The  convey- 
ance being  fraudulent  as  against  them,  the  parties  who  took 
the  legal  title  (though  not  participating  in  the  fraud),  pay- 
ing no  consideration  for  the  conveyance,  and  the  equitable 
title  being  in  the  debtor  who  paid  the  purchase-money,  the 
judgment-creditors  might  doubtless  have  maintained  bills 
in  equity  to  charge  the  land  with  their  debts. '^  Or,  it  aj)- 
pearing  that  the  land  cannot  be  held  under  their  levies,  they 
might,  by  scire  facias,  have  obtained  new  executions  on 
the  original  judgments.^  It  does  not,  however,  follow  that 
this  bill  can  be  maintained  in  its  present  form.  The  plain- 
tiff has  acquired  no  interest  in  those  judgments,  or  in  the 
debts  on  which  they  were  recovered.  The  only  transfers 
from  the  judgment-creditors,  under  which  she  claims,  are 
quitclaim  deeds,  without  covenants  of  warranty,  of  the 
land  taken  on  execution,  which,  as  the  grantors  had  no 
title,  passed  none.  Those  creditors  are  not  made  parties 
to  this  suit,  either  as  plaintiffs  or  defendants,  and  would 
therefore  be  at  liberty,  notwithstanding  any  decree  therein, 
to  pursue  their  remedy  by  scire  facias  against  their  debtor. 
It  would  be  inconsistent  with  the  principles  and  the  prac- 
tice of  courts  of  equity  to  maintain  this  bill,  upon  the 
ground  that  the  original  conveyance  was  fraudulent  and 
void  as  against  the  judgment-creditors,  without  making 
them  part'es  to  the  suit  in  due  form."  It  may  be  further 
observed  that  a  judgment-creditor  is  not  obliged  to  folKjw 


'  Hamilton  v.  Cone,  99  Mass.  478.         Johns.  Ch.  (N.  Y.)  450;  Lyndc  v.  Mc- 

«  Huguenin  v.  Baseley,  14  Ves.  273  ;     Gregor,  13  Allen  (Mass.j  182. 

Neate  v.  Marlborough,  3  Myl.  &  Cr.         '  Dennis  v.  Arnold,  12  Met.  (Mass.) 

407 ;  Goldsmith  v.  Russell,  5  De  G.,     449  ;     Dewing    v.    Durant,    to    Gray 

M.  &  G.  547 ;  Bayard  v.  Hoffman,  4     (Mass.)  29 ;   Gen.  Stats,  of  Mass.  c. 

103,  §  22. 


I04  creditors'  bills.  §  6S 

all  the  fraudulent  conveyances  which  may  have  been  made 
by  several  execution  defendants,  but  may  leave  some  of 
them  to  stand  while  he  seeks  to  set  aside  others  ;  ^  nor  can 
the  debtor  or  the  fraudulent  alienee,  as  a  general  rule,  com- 
pel the  creditor  to  elect  which  method  of  procedure  or  class 
of  property  he  will  pursue.'^ 

§  68.  Creditors'  bills. — It  is  said  in  New  York,^  that  the 
object  of  a  creditor's  bill  in  that  State  ^  is  to  reach  choses 
in  action  and  equitable  assets  of  the  judgment-debtor  which 
cannot  be  reached  by  execution.  And,  before  such  a  bill 
can  be  filed,  it  is  always  necessary  that  an  execution  should 
be  issued  to  the  county  where  the  judgment-debtor  resides,^ 
and  be  returned  unsatisfied  ;^  and  in  such  an  action  all  the 
judgment-debtors  are  necessary  parties,  unless  it  can  be 
shown  that  one  omitted  is  insolvent  or  a  mere  surety  for 
the  defendant.  The  filing  of  a  creditor's  bill,  and  the  service 
of  process,  as  we  have  said,'''  creates  a  lien  in  equity  upon 
the  effects  of  the  judgment-debtor.^  It  has  been  aptly 
termed  an  "  equitable  levy."  ^  It  may  be  here  observed  that 
a  creditor's  bill,  in  many  of  our  States,  is  an  appropriate 


^  First    Nat.    Bank    v.    Hosmer,   48  ^  Compare  Wadsworth  v.   Schissel- 

Mich.  200  ;  Miller  v.  Dayton,  47  Iowa  bauer,  32  Minn.  87. 

312.  "^  Compare   The  Holladay  Case,  27 

'  Gray  v.  Chase,  57  Me.  558  ;  Vasser  Fed.  Rep.  845. 

V.  Henderson,  40  Miss.  519  ;  Edmunds  '  See  §  61. 

V.  Mister,  58  Miss.  766  ;  Baker  v.  Ly-  •*  Per  Swayne,  J.,  in  Miller  v.  Sherry, 

man,  53  Ga.  339.  2  Wall.  249.     Citing  Bayard  v.  Hoff- 

^  Fox  V.  Moyer,  54  N.  Y.  128.     Mr.  man,  4  Johns.  Ch.  (N.  Y.)  450;  Beck 

Bispham    says,    in    his    Principles   of  v.  Burdett,  i  Paige  (N.  Y.)  308 ;  Storm 

Equity,  §  246  :  "  In  many  of  the  States,  v.  Waddell,  2  Sandf.  Ch.  (N.  Y.)  494 ; 

property  of  an  equitable  character,  and  Coming  v.  White,  2  Paige  (N.  Y.)  569  ; 

property  conveyed  in  fraud  of  creditors,  Edgell  v.   Haywood,  2  Atk.  35::^.     See 

may  be  reached  by  a  creditor  s  bill ;  a  Brown  v.  Nichols,  42  N.  Y.  26 ;    Lynch 

remedy  which  may  be   considered   as  v.  Johnson,  48  N.  Y.  33  ;   Roberts  v. 

having  originated  in  the  case  of  Spader  Albany  &  W.  S.  R.R.  Co.,  25  Barb. 

V.  Davis  [5  Johns.  Ch.  (N.  Y.)  280,  de-  (N.  Y.)  662 ;  George  v.  Williamson,  26 

cided  by  Chancellor'  Kent]  in  the  year  Mo.  190. 

1 82 1,  and  which  has  been  very  exten-  ^  Tilford  v.  Bumham,  7  Dana  (Ky.) 

sively  employed  since  that  time."  no  ;  Miller  v.  Sherr)',  2  Wall.  249, 

^  See  2  R.  S.  174;  2  Barb.  Ch.  Pr.  147. 


§  68  creditors'  bills.  105 

remedy  to  annul  a  conveyance  in  fraud  of  creditors.  It 
ought  always  to  be  resorted  to  where  this  latter  relief  is  de- 
sired. "A  creditor's  bill  is  the  continuation  of  the  former 
controversy,  so  far  as  the  fruits  of  the  judgment  are  con- 
cerned. The  complainant  asks  the  aid  of  the  court  to  reach 
the  assets  of  the  defendant,  so  as  to  be  made  liable  to  his 
judgment,  which  assets  have  been  secreted  or  fraudulently 
assigned  to  defeat  the  judgment."^  Usually  creditors'  bills 
are  largely  regulated  by  statute,  and  the  relief  extended  is 
often  in  a  measure  dependent  upon  the  local  laws  governing 
the  subject.  It  may  be  asked  in  what  respects  a  creditor's 
bill  differs  from  an  ordinary  bill  in  equity,  prosecuted  to 
cancel  a  covinous  conveyance  or  remove  a  fictitious  trans- 
fer. The  answer  is  that  the  creditor's  bill,  at  least  in  some 
States,  is  broader  and  more  effectual  in  its  operations  and 
results.  The  ordinary  bill  or  suit  in  equity  is  generally 
brought  to  unravel  some  particular  transaction,  and  to  annul 
some  particular  conveyance,  or  remove  a  cloud  on  a  i)iir- 
ticular  title.^  A  creditor's  bill,  on  the  other  hand,  is  usually 
in  the  nature  of  a  bill  of  discovery,^  and  is  more  extended 
in  its  results  ;  not  only  does  it  reach  property  described 
therein,  but  by  means  of  this  form  of  remedy  every  species 
of  assets,  and  even  debts  due  the  debtor  of  which  the  cred- 
itor knew  nothing,  and  which  were  not  referred  to  in  the 
bill,  may  be  reached  through  the  instrumentality  of  a  re- 
ceiver, and  applied  to  the  claim.  For  this  reason  it  is  ap- 
propriately called  an  omnibus  bill.^     "Creditors'  bills,"  says 

•  Hatch  V.  Dorr,  4  McLean  1 12.  the  statutory  bill,  franiec]  under  2  R.  S. 

-  See  Brown  v.  Nichols,  42  N.  Y.  26  ;  173,  in  aid  of  a  judgment-creditor  who 

Lynch  v.  Johnson,  48  N.  Y.  33  ;  Rob-  has  exhausted  his  remedy  at   law,    to 

erts  V.  Albany  &  W.   S.  R.R.  Co.,  25  enable   him   to    discover   the  debtor's 

Barb.  (N.  Y.)  662  ;  George  v.  William-  property,  and  to  reach  his  ecjuitable  in- 

son,  26  Mo.  190.  terests.     This  bill  was  known  belore 

^  See  Newman  v.Willetts,  52  III.  loi.  the  statute.     (Hadden   v.   Spader,    20 

•»  In  Conro  v.  Port  Henry  Iron  Co.  Johns.  [N.  Y.j  554.)     And  the  statute 

(12  Barb.  [N.  Y.]  58),  the  court  said:  was  framed  to  aid  in  carrying  out  the 

"  There  are  two  sorts  of  creditors' bills  principle  of  that  and  other  like  deci- 

known  to  our  jurisprudence  ;  the  one  is  sions.     In  proceedings  under  such  bill. 


io6 


CREDITORS     BILLS. 


§68 


Mr.  Bispham,^  "are  bills  filed  by  creditors  for  the  purpose 
of  collecting  their  debts  out  of  the  real  or  personal  prop- 
erty of  the  debtor,  under  circumstances  in  which  the  pro- 
cess of  execution  at  common  law  could  not  afford  relief. 


it  had  always  been  held  that  several 
creditors,    by  judgment,  of  the    same 
debtor,    might    unite    in    the    action, 
though  they  had  no  other  common  in- 
terest than  in  the  relief  sought.     (Ed- 
meston  v.  Lyde,  i  Paige  [N.  Y.]  637 ; 
Wakeman  v.  Grover,  4  Paige  [N.  Y.] 
23.)     All  the  judgment-creditors  were 
proper  parties,  though  not   necessary 
parties,  because  the  action  could  not  be 
sustained   by  a  single  judgment-cred- 
itor.    The  same  rule  existed  before  the 
statute,  and  was  applied  in  a  creditor's 
suit  by  Chancellor  Kent  in  McDermutt 
V.  Strong  (4  Johns.   Ch.  [N.  Y.]  687). 
The  other  class  of  creditors'  suits,  not 
depending  upon  any  statute,  are  suits 
brought  for  the  administration  of  as- 
sets, to  reach  property  fraudulently  dis- 
posed of,  or  held  in  trust,  etc.     The  bill 
in  such  case  is  filed  in  behalf  of  the 
plaintiff  or   plaintiffs,   and   all    others 
standing  in  a  similar  relation,  who  may 
corns  in  under  such  bill  and  the  decree 
to  be  made.     It  may  be  filed  by  simple 
contract  creditors,  and  does  not  require 
a  judgment   to  have    been    obtained. 
(Barb.  Chan.  Prac,  vol.    IL,  p.   149)." 
In  Fusze  v.  Stern,  17  Bradw.  (111.)  432, 
the   court   said :  "  There    are    several 
kinds  of  original  bills   known  to  our 
laws,  wherein  courts  of  equity  enter- 
tain jurisdiction  to  aid  a  creditor  in  ob- 
taining satisfaction  of  his  claim  from 
his   debtor,   and   which   are  generally 
denominated  creditors'  bills,  not  only  by 
the  members  of  the  legal  profession,  but 
by  the  courts  as  well,  as  where  a  debtor 
seeks  to  satisfy  his  debt  out  of  some 
equitable  estate  of  the  defendant  which 
is  not  subject  to  levy  and  sale  under  an 
execution  at  law ;  then  before  he  can 
have  the  aid  of  a  court  of  equity  to  de- 


cree the  equitable  estate,  subject  to  the 
payment  of  his  debt,  the  creditor  must 
show  by  his  bill,  as  in  other  cases  where 
invoking  equitable  jurisdiction,  that  he 
has  no  adequate  remedy  at  law,  which 
can  only  be  shown  by  alleging  and 
proving  that  he  has  exhausted  all  the 
means  provided  by  the  law  for  the  col- 
lection of  his  debt,  viz.,  a  recovery  of 
judgment,  the  issuing  of  execution,  and 
its  return  tiulla  bona  by  the  officer 
charged  with  its  collection.  Another 
kind  of  bill  analogous  to  this  is  where 
the  creditor,  having  recovered  judg- 
ment against  his  debtor,  seeks  to  re- 
move a  fraudulent  conveyance  or  in- 
cumbrance out  of  the  way  of  an  execu- 
tion issued  or  to  be  issued  upon  such 
judgment.  In  such  case  equity  will 
afford  relief  on  the  ground  that  such 
judgment  is  an  equitable  lien  upon  real 
estate,  nominally  held  by  a  third  party 
under  such  fraudulent  conveyance,  and 
the  creditor  having  this  lien  is  entitled 
to  levy  upon  and  sell  upon  his  execu- 
tion such  real  estate  discharged  and  un- 
trammeled  from  the  cloud  upon  it  caused 
by  such  conveyance.  In  bills  of  this  kind 
the  complainant  need  not  even  prove  the 
return  of  e.Kecution  ttitlla  bona,  as  such 
conveyances  are  void  by  the  statute, 
and  courts  of  equity  do  not  hesitate  to 
declare  them  void  because  of  such 
fraud,  and  place  the  creditor  in  the 
same  position,  respecting  his  judgment, 
that  he  would  have  occupied  if  such 
conveyance  had  not  been  made.  A 
recovery  of  a  judgment  which  at  time 
of  filing-  the  bill  would,  in  absence  of 


'  Bispham's    Principles    of    Equity, 
§525. 


§  69  DIRECT    AND    COLLATERAL    ATTACK.  IO7 

This  equitable  remedy  may  be  made  use  of  during  the  life- 
time of  the  debtor,  or  after  his  death.  Creditors'  bills  filed 
against  the  estate  of  a  decedent,  generally,  though  not  neces- 
sarily, partake  of  the  nature  of  administration  suits." 

§  69.  Direct  and  collateral  attack — Exceptional  doctrine  in 
Louisiana. — A  novel  principle  relating  to  covinous  convey- 
ances, derived  from  the  civil  law,  prevails  in  Louisiana.  If 
a  sale  is  fraudulent  as  to  creditors  it  must  be  regularly  set 
aside  in  a  direct  action  or  proceeding  instituted  for  that 
purpose.  Not  only  is  it  binding  between  the  original 
parties,  which  is  the  universal  rule,^  but  it  is  conclusive 
upon  third  parties  until  nullified  by  the  form  of  action 
which  the  law  provides,  and  the  possession  of  the  vendee 
is  legal  until  the  fraudulent  instrument  is  avoided  in  the 
due  course  of  law.^  The  reasons  for  this  practice  are  in- 
geniously given  in  Peet  v.  Morgan,^  by  Porter,  J.,  who 
there  says:  "Of  its  correctness  the  court  entertains  no 
doubt.  It  is  clearly  supported  by  authority,  and  it  is  sanc- 
tioned by  reason  and  utility.  The  principle  on  which  it 
rests  is,  that  men  are  presumed  to  act  honestly  until  the 
contrary   is  proved  ;    that   the  conveyances  alleged  to   be 


such  conveyance,  be  a  legal  lien  under  County  of  Morgan  v.  Allen,  103  U.  S. 

the  statute  upon  the  land,  is  all  that  is  498 ;  Crandall  v.  Lincoln,  52  Conn.  73  ; 

necessaiy  to  aver  and  prove."     Citing  Messersmith  v.  Sharon  Savings  Bank, 

Miller  v.  Davidson,  8  111.  518;  Weigt-  96  Pa.  St.  440;  Stone  v.  Chisolm,  113 

man   v.    Hatch,    17  111.  281  ;    Shufeldt  U.  S.  302. 

V.  Boehm,  96  111.  561.      Mr.  Bispham  '  See  Chap.  XX\1. 

says,    in    Principles   of  Equity,  §  527  :  -  Yocum  v.  Bullit,  6  Mart.  N.  S.  (La.) 

"  The  threefold  advantage  of  reaching  324;  s.  c.  17  Am.  Dec.  184,  and  the 

property  otherwise  exempt,  of  setting  learned  note  of  A.  C.  Freeman,  Esq. 

aside  fraudulent  conveyances,  and  of  See  Barbarin  v.  Saucier,  5  Mart.  N.  S. 

discovery,  renders   a  creditors'  bill   a  (La.)    361  ;   Le   Coaster   v.   Barthe,    2 

very  effective  instrument  for  the  collec-  Rob.  (La.)  388 ;   Drummond  v.  Com- 

tion  of  debts."  Creditors' bills  are  much  missioners,  7  Rob.  (La.)  234;  I'rcsasv. 

used    against    insolvent     corporations  Lanata,   1 1   Rob.  (La.)  288  ;  Collins  v. 

where  the  capital  stock  is  treated  as  a  Shaffer,    20   La.    Ann.   41  ;    Payne    v. 

trust  fund.     See  Sawyer  v.  Hoag,   17  Graham,    23   La.    Ann.    771  ;  Ford  v. 

Wall.  610;  Sanger  v.  Upton,  91  U.  S.  Douglas,  5  How.  166. 

56;  Hatch   V.  Dana,   loi   U.  S.   205;  '  6  Mart.  N.  S.  (La.)  137. 


I08  DIRECT    AND    COLLATERAL    ATTACK.  §  69 

fraudulent  are  prima  facie  correct  and  fair ;  and  that  it  is 
improper  in  opposition  to  these  presumptions,  the  creditor 
should  exercise  rights  that  could  only  properly  belong  to 
him,  in  case  the  acts  of  his  debtor  were  null  and  of  no  ef- 
fect. In  many  instances,  should  a  contrary  doctrine  pre- 
vail, sales  which  were  alleged  fraudulent  might  turn  out  to 
be  bona  fide,  and  the  purchaser  be  deprived  of  the  use  and 
enjoyment  of  property  which  was  honestly  his.  In  the  un- 
certainty which  must  prevail  until  the  matter  undergoes  a 
judicial  investigation,  it  is  certainly  the  wisest  course,  and 
the  one  most  conducive  to  general  utility,  to  consider  the 
thing  sold  as  belonging  to  him  in  whom  the  title  is  vested." 
It  is  idle  to  speculate  as  to  the  utility  of  this  doctrine,  for 
it  is  entirely  opposed  to  the  general  practice  in  the  other 
States,  and  to  the  English  and  American  authorities.  The 
fraudulent  transfer  is  not  generally  regarded  as  being  ef- 
fectual against  creditors  ;  it  does  not  as  to  them  divest  the 
debtor's  title,  but  his  interest  remains  subject  to  their  rem- 
edies, and  may  be  seized  and  sold  on  execution.^  The 
property  may  be  treated  and  reached  by  creditors  as  though 
the  transfer  had  never  been  made.^  Thus  in  Imray  v. 
Magnay,^  the  court  said:  "It  is  now  of  frequent  occur- 
rence that  the  sheriff  is  bound  to  take  goods  which  have 
been  fraudulently  conveyed  or  assigned  to  defeat  creditors, 


'  Jacoby's  Appeal,  67  Pa.  St.  434;  595;  citing  Jackson  v.  Myers,  11  Wend. 
Hoffman's  Appeal,  44  Pa.  St.  95  ;  Rus-  (N.  Y.)  535  ;  Jackson  v.  Burgott,  10 
sell  V,  Dyer,  33  N.  H.  186;  Allen  v.  Johns.  (N.  Y.)  456;  Remington  v. 
Berry,  50  Mo.  90 ;  Ryland  v.  Callison,  Linthicum,  14  Pet.  84 ;  Rogers  v. 
54  Mo.  513;  Fowler  v.  Trebein,  16  Brent,  10  111.  580;  Jamison  v.  Beau- 
Ohio  St.  493;  Staples  V.  Bradley,  23  bien,  4  111.  114;  Baze  v.  Arper,  6  Minn. 
Conn.  167;  Foley  v.  Bitter,  34  Md.  220;  Cook  v.  Swan,  5  Conn.  140; 
646;  Gormerly  v.  Chapman,  51  Ga,  Marcy  v.  Kinney,  9  Conn.  397  ;  Lillie  v. 
421  ;  Freeman  on  Executions,  §  136.  Wilson,  2  Root  (Conn.)  517. 
"In  an  action  of  ejectment  it  is  com-  -  Russell  v.  Winne,  37  N.  Y.  591; 
petent  to  show  that  a  conveyance  re-  Brown  v.  Snell,  46  Me.  490  ;  Booth  v. 
lied  upon  by  one  of  the  parties  to  the  Bunce,  33  N.  Y.  139;  Angier  v.  Ash, 
action  was  made  with  intent  to  defraud  26  N.  H.  99. 
creditors."     Knox  v.  McFarran,  4  Col.  ^  11  M.  &  W.  267. 


§  JO  CASES  OF  FRAUD  ON  WIFE.  IO9 

and  is  responsible  in  an  action  for  a  false  return  at  the  suit 
of  a  creditor."  Though  the  principle  embodied  in  these 
Louisiana  cases  may  seem  logical  and  fair  upon  its  face, 
certainly  its  practical  operation  would  not  be  commensurate 
with  the  needs  of  creditors  generally.  The  creditor  cannot 
be  expected  to  lay  formal  siege  to  every  semblance  of  an 
obstruction  that  the  debtor  rears  in  his  pathway.  The 
theory  concerning  a  fraudulent  conv^eyance  is  that  it  has 
only  the  color  and  appearance  of  a  valid  act,  and  is  not  in 
itself  effectual ;  why  then  should  the  creditor  be  forced  to 
undergo  the  vexatious  delay  and  expense  incident  to  pro- 
curing a  formal  adjudication  vacating  every  covinous  alien- 
ation of  property  which  the  ingenuity  of  the  debtor  may 
devise  ?  If  the  transfer  is  in  fact  fraudulent,  then,  by  seiz- 
ing and  selling  the  property  on  execution,  the  controversy 
is  practically  concluded  without  further  trouble  or  suit,  and 
the  fraudulent  alienee  will  not  be  rash  enough  to  attempt  to 
reclaim  it.  On  the  other  hand,  if  the  transfer  is  bona  Jidc, 
the  creditor  is  legally  accountable  for  the  seizure.  If  the 
creditor  unjustly  refuses  to  treat  the  transfer  as  valid  the 
purchaser,  if  it  relate  to  realty,  may  hold  the  possession 
and  defend  in  ejectment ;  while  if  it  be  personalty,  he  may 
recover  it  by  replevin  or  sue  in  trover.  In  either  case,  if 
the  vendee  claims  the  property,  indemnity  would  be  ex- 
acted by  the  officer  making  the  seizure.  Under  the 
Louisiana  system  a  debtor,  by  selecting  an  irresponsible 
vendee,  could  shield  him  with  a  simulated  transfer,  and  en- 
able him  to  dissipate  the  property  in  practical  defiance  of 
the  creditor. 

g  70.  Forms  of  relief  in  cases  of  fraud  on  wife. — Special 
treatment  of  the  relationship  of  husband  and  wife  as  bear- 
ing upon  fraudulent  transfers  will  be  found  in  the  body  of 
the  vvork.^  We  may  allude  here  to  the  rule  thai  where  a  hus- 
band has  fraudulently  alienated  his  real  property,  as  against 

•  See  Chap.  XX. 


no  PROCEDURE    IN    FEDERAL    TRIBUNALS.  §  /I 

the  rights  of  his  wife  or  prospective  wife,  she  may,  even 
during  his  lifetime,  bring  suit  to  annul  the  deed  as  a  fraud 
upon  her  right  of  dower  ;  ^  for  an  inchoate  right  of  dower 
is  an  interest  which  the  courts  will  protect.^  It  is  as  much 
a  fraud  for  a  man  to  place  his  property  out  of  his  hands  for 
the  purpose  of  avoiding  the  right  of  dower  w^hich  is  about 
to  attach  to  it,  as  it  is  for  a  debtor  who  contemplates  the 
contraction  of  debts  to  voluntarily  dispose  of  his  property 
in  order  to  defeat  the  efforts  of  future  creditors  to  secure 
their  payment.  The  latter  result,  it  is  conceded,  as  else- 
where shown,^  cannot  be  successfully  accomplished.^  The 
wife  may  in  such  cases  maintain  a  bill  in  equity  to  reach 
the  property  fraudulently  conveyed,^  or  she  may,  according 
to  some  of  the  cases,  file  a  bill  in  chancery  to  recover  her 
dower  in  the  property  as  though  no  conveyance  had  ever 
been  executed.^ 

§  71.  Procedure  in  Federal  tribunals. — Statutes  passed  by 
State  legislatures  affecting  rights  of  creditors,  being  local 
enactments  and  involving  a  rule  of  property,  the  Federal 
courts  will  adopt  the  construction  which  has  been  given  to 
the  statutes  by  the  highest  judicial  tribunal  of  the  State,^ 
even  though,  were  it  an  open  question  "  depending  upon 
the  general  principles  of  jurisprudence,"  the  conclusion  of 
the  court  might  have  been  different.^  A  Federal  court  is 
bound  to  apply  such  a  rule  of  property  precisely  as  though 
it  were  sitting  as  a  local  court  in  the  State  ;  and  this  is  true 


•  Youngs  V.  Carter,  10  Hun  (N.  Y.)  ®  See  Brown  v.  Bronson,  35  Mich. 

194;  Petty  V.  Petty,  4  B.  Mon.  (Ky.)  415;  Jiggitts  v.  Jiggitts,  40  Miss.  718. 

216.  ""  Nichols  V.  Levy,  5  Wall.  443,  444; 

-  Mills  V.  Van  Voorhies,  20  N.  Y.  Sumner  v.  Hicks,  2  Black  532  ;  Dun- 

412;  Simar  V.  Canaday,  53  N.  Y.  298.  das  v.  Bowler,  3  McLean  397;  Hey- 

'  See  Chap.  VL  dock  v.  Stanhope,  1  Curtis  471  ;  Beach 

•*  See  Savage  v.  Murphy,  34  N.  Y.  v.   Viles,   2   Pet.   675.     See   Williams 

508 ;  Case  V.  Phelps,  39  N.  Y,  164.  v.   Kirtland,    13   Wall.   306;   Ross   v. 

'^  Gilson   v.    Hutchinson,   120  Mass.  M 'Lung,  6  Pet.  283 ;  Morse  v.  Riblet, 

27 ;  Petty  v.  Petty,  4   B.  Mon.  (Ky.)  22  Fed.  Rep.  501. 

215.  °  Nichols  V.  Levy,  5  Wall.  443. 


§   71  PROCEDURE    IN    FEDERAL    TRIBUNALS.  Ill 

as  to  the  observance  of  a  State  rule  gov^erning  voluntary 
conveyances/  general  assignments,'-^  or  sales  rendered  void 
for  want  of  a  change  of  possession.^  And  sometimes  re- 
lief may  be  had  in  a  Federal  court  where  the  jurisdiction 
of  the  State  court  would  have  proved  imperfect.'  Where  a 
State  court  acquires  possession  and  control  over  an  insol- 
vent debtor's  property  it  has  power  to  dispose  of  it  and  to 
give  a  good  title.  To  this  extent,  as  against  a  Federal 
court,  the  State  law  is  a  rule  of  property.'^  Where  a  credit- 
or's suit  is  removed  from  a  State  court  to  a  Federal  court 
on  the  ground  that  the  controversy  is  between  citizens  of 
different  States,  jurisdiction  is  not  lost  by  admitting  as 
plaintiffs  other  creditors  who  are  citizens  of  the  same  State 
as  the  defendants.*'  As  we  have  shown,  the  local  law  where 
the  property  has  its  situs  governs  in  controversies  to  reach 
such  property  by  creditors.^  It  may  be  here  observed  that 
leave  to  sue  and  defend  Z7i  forma  pauperis  will  be  accorded 
to  infants  in  the  Federal  courts,  though  a  different  rule  pre- 
vailed in  the  State  tribunals,^  and  that  equity  jurisdiction  in 
the  Federal  courts  is  wholly  independent  of  the  local  laws 
of  the  State,  and  is  the  same  in  its  nature  and  extent  in  all 
the  States  ;  and  that  Federal  courts  are  bound  to  proceed 
in  equity  causes  according  to  the  principles,  rules,  and 
usages  which  belong  to  the  courts  of  chancery,  as  contra- 
distinguished from  common-law  courts.^ 


'  Lloyd  V.  Fulton,  91  U.  S.  485.  '  Spindle  v.  Shreve,  11 1  U.  S.  542. 

'  Parker  v.  Phetteplace,  2  Cliff.  70;  "  Ferguson  v.  Dent,  15  Fed.  Rep.  771. 

Jaffray  v.   McGehee,   107  U.  S.  364;  See   Southvvorth   v.   Adams.  2   Flipp. 

Sumner  v.  Hicks,  2  Black  532.  282,  in  noiis. 

•■'  Allen  V.  Massey,  17  Wall.  351.    See  '  Gordon  v.  Hobart,  2  Sumner  405  ; 

Howard  v.  Prince,  11  N.  B.  R.  327,   As  Burt  v.  Keyes,  i   Flipp.  69,  per  Stor>', 

to  supplementary  proceedings  in  Fed-  J. ;  McFarlane  v.  Griffith,  4  Wash.  C. 

eral  courts,  see  §61,  n.  C.  585;  Gaines  v.  Relf,  15  Tct.  9.    See 

*  See   Gorrell   v.   Dickson,   26   Fed.  Green  v.  Creighton,  23  How.  90.     A 

Rep.  454.  creditor  having  a  standing  in  the  Fed- 

'  Burt  V.   Keyes,    i    Flipp.  62.     See  eral  courts  can  contest  the  validity  of  a 

Wiswal  V.  Sampson,  14  How.  52;  Will-  voluntary  assignment,  and  a  State  law 

iams  V.  Benedict,  8  How.  107  ;  Payne  cannot  deprive  him  of  this  right.   Adler 

V.  Drewe,  4  East  523.  v.  Ecker,  i  McCrary  257. 

«  Stewart  v.  Dunham,  115  U.  S.  61. 


112  RECAPITULATION.  §   72 

Questions  as  to  appellate  jurisdiction  in  Federal  tribunals 
will  be  presently  considered.^ 

§  72.  Recapitulation. — As  regards  the  enforcement  of  a 
judgment  against  real  property  fraudulently  conveyed  a 
creditor  then  may  be  said  to  have  three  modes  of  obtaining 
satisfaction  of  his  demand. 

First.  To  obtain  a  decree  of  a  court  of  equity  declaring 
the  conveyance  fraudulent,  setting  it  aside,  and  thereafter 
proceeding  to  sell  the  land  on  execution. 

Second.  By  inserting  in  the  decree  in  an  equitable  ac- 
tion, in  addition  to  the  provisions  avoiding  the  transfer,  a 
further  clause  appointing  a  referee  to  sell  at  public  auction, 
and  directing  the  debtor  to  unite  in  the  conveyance  ;  or  a 
clause  appointing  a  receiver  and  directing  that  the  debtor 
convey  the  land  to  him  and  that  he  sell  it. 

Third.  The  creditor  may  sell  the  land  on  execution,  and 
the  purchaser  may  then  set  up  the  fraud  in  the  debtor's 
conveyance,  and  if  this  is  established,  obtain  a  judgment 
entitling  him  to  the  possession  of  the  land.^ 

The  advantages  incident  to  a  judicious  selection  from 
these  remedies  in  particular  cases  should  not  be  over- 
looked.^ 

Stated  in  a  form  of  more  universal  application,  it  is,  as 
we  have  seen,  a  familiar  and  unquestioned  doctrine  of 
equity,  that  the  court  has  power  to  aid  a  judgment-creditor 
to  reach  the  property  of  his  debtor,  either  by  removing 
fraudulent  judgments  or  conveyances  which  obstruct  or 
defeat  the  plaintiff's  remedy  under  the  judgment,  or  by  ap- 
propriating toward  the  satisfaction  of  the  judgment  rights 
or  equitable  interests  of  the  debtor,  which  are  not  the  sub- 
ject of  legal  execution."^ 


'  See  Chap.  XXVII.  ^  See  Chap.  XI. 

-  Dawley  v.  Brown,  65  Barb.  (N.  Y.)        *  Robert    v.   Hodges,  16  N.  J.  Eq. 
120.  302. 


CHAPTER    IV 


STATUS    OF    ATTACKING    CREDITORS. 


§  73-  Rights  of  creditors  at  large. 

74.  Judgment    conclusive    as   to   in- 

debtedness. 

75.  Creditor  must   have   lien    before 

filing  bill. 

76.  Judgments  suflficient. 
TJ.  Judgments  insufficient. 

78.  Foreign  judgments. 

79.  Creditors  of  a  decedent.     * 

80.  Rule  as  to  judgments  in  equitable 

actions. 

81.  Specific  lien  by  attachment. 


§  82.  Property  of  the  debtor  taken  in 
name  of  third  party. 

83.  When  judgment  is  unnecessary. 

84.  Absconding     and     non-resident 

debtors. 

85.  Exceptional  practice  in   Indiana 

and  North  Carolina. 

86.  Return  of  execution  unsatisfied. 

87.  Distinction   between    realty   and 

personalty   as    to   issuance   of 
execution. 

88.  Raising  the  objection. 


"  Courts  of  equity  are  not  tribunals  for  the  collection  of  debts." — Webster  v.  Clark,  25  Me. 
314- 

§  73.  Rights  of  creditors  at  large.— A  creditor  at  large, 
commonly  called  a  simple  creditor,  cannot  assail  as  fraudu- 
lent against  creditors,  an  assignment  or  transfer  of  property 
made  by  his  debtor,  until  the  creditor  has  first  established 
his  debt  by  the  judgment  of  a  court  of  competent  jurisdic- 
tion, and  has  either  acquired  a  lien  upon  specific  property, 
or  is  in  a  situation  to  perfect  a  lien  thereon  and  subject  it 
to  the  payment  of  his  judgment,  upon  the  removal  of  the 
obstacle  presented  by  the  fraudulent  assignment  or  trans- 
fer.^    This  principle  is  elementary.^     A  rule  of  procedure 


1  Southard  v.  Benner,  72  N.  Y.  426. 
Compare  Case  v.  Beauregard,  loi  U. 
S.  688,  and  see  Taylor  v.  Bowker,  1 1 1 
U.  S.  1 10 ;  Briggs  v.  Oliver,  68  N.  Y. 
336.     See  §  52. 

■^  Dodd  V.  Levy,  10  Mo.  App.  122; 
Smith  V.  Railroad  Co.,  99  U.  S.  401  ; 
Turner  v.  Adams,  46  Mo.  95  ;  Crim  v. 
.   8 


Walker,  79  Mo.  335  ;  Dawson  v.  Coffey. 
12  Ore.  519;  Baxter  v.  Moses,  77  Me. 
465  ;  Bassett  v.  St.  Albans  Hotel  Co., 
47  Vt.  314;  Pendleton  v.  Perkins,  49 
Mo.  565 ;  Jones  v.  Green,  i  Wall.  330  ; 
Skeele  v.  Stan  wood.  33  Me.  309 ;  Meux 
V.  Anthony,  11  Ark.  411  ;  Webster  v. 
Clark,  25  Me.  313  ;  Voorhees  v.  How- 


114 


RIGHTS  OF  CREDITORS  AT  LARGE. 


§  n 


which  allowed  any  prowling  creditor,  before  his  claim  was 
definitely  established  by  judgment,  and  without  reference 
to  the  character  of  his  demand,  to  file  a  bill  to  discover 
assets,  or  to  impeach  transfers,  or  interfere  with  the  busi- 
ness affairs  of  the  alleged  debtor,  it  is  asserted  would  mani- 
festly be  susceptible  of  the  grossest  abuse.  A  more  power- 
ful weapon  of  oppression  could  not  be  placed  at  the  disposal 
of  unscrupulous  litigants.  A  creditor  at  large,  having  no 
lien  or  trust,^  is  not  favored  in  the  class  of  litigation  under 
consideration,^  and,  generally  speaking,  has  absolutely  no 
status  in  court  for  the  purpose  of  filing  a  creditor's  bill.^ 


ard,  4  Keyes  (N.  Y.)  371  ;  Barrow  v. 
Bailey,  5  Fla.  9 ;  Burnett  v.  Gould,  27 
Hun  (N.  Y.)  366;  Reubens  v,  Joel,  13 
N.  Y.  488;  Alnutt  V.  Leper,  48  Mo. 
319;  Mills  V.  Block,  30  Barb.  (N.  Y.) 
552;  Martin  v.  Michael,  23  Mo.  50; 
Public  Works  v.  Columbia  College,  17 
Wall.  530 ;  Kent  v.  Curtis,  4  Mo.  App. 
121  ;  Tate  v.  Liggat,  2  Leigh  (Va.) 
84;  Greenway  v.  Thomas,  14  111.  271  ; 
Fletcher  v.  Holmes,  40  Me.  364 ;  Adsit 
V.  Butler,  87  N.  Y.  585  ;  Taylor  v.  Bow- 
ker,  III  U.  S.  no;  Tyler  v.  Peatt,  30 
Mich.  63  ;  Tolbert  v.  Horton,  31  Minn. 
520 ;  Vasser  v.  Henderson,  40  Miss. 
519;  People's  Savings  Bank  v.  Bates, 
120  U.  S.  562  ;  McKinley  v.  Bowe,  97 
N.  Y.  93 ;  Webster  v.  Lawrence,  47 
Hun  (N.  Y.)  566 ;  Lichtenberg  v. 
Herdtfelder,  33  Hun  (N.  Y.)  57 ;  Ben- 
nett V.  Stout,  98  111.  47 ;  McAuliffe  v. 
Farmer,  27  Mich.  76 ;  Smith  v.  Millett, 
12  R.  I.  59;  Ferguson  v.  Bobo,  54 
Miss.  121  ;  Claflin  v.  McDermott,  12 
Fed.  Rep.  375  ;  Haggerty  v.  Nixon,  26 
N.  J.  Eq.  42  ;  Cropsey  v.  McKinney,  30 
Barb.  (N.  Y.)  47  ;  Stewart  v.  Fagan,  2 
Woods  215  ;  McMinn  v.  Whelan,  27 
Cal.  300;  Hunt  v.  Field,  9  N.  J.  Eq. 
36 ;  Robinson  v.  Stewart,  10  N.  Y. 
189 ;  McDermott  v.  Blois,  i  R.  M. 
Charlt.  (Ga.)  281  ;  Sturges  v.  Vander- 
bilt,  73  N.  Y.  384;  Evans  v.  Hill,  18 


Hun  (N.  Y.)  464;  Sexey  v.  Adkinson, 
34  Cal.  346  ;  Dahlman  v.  Jacobs,  1 5 
Fed.  Rep.  863  ;  Miller  v.  Miller,  7  Hun 
(N.  Y.)  208  ;  Griffin  v.  Nitcher,  57  Me. 
270.  See  Ex  parte  Boyd,  105  U.  S. 
653.  Compare  Case  v.  Beauregard, 
loi  U.  S.  688,  and  see  Taylor  v.  Bow- 
ker,  III  U.  S.  no;  Jones  v.  Green,  i 
Wall.  330.  In  Alabama  "  a  creditor 
without  a  lien  may  file  a  bill  in  chan- 
cery to  subject  to  the  payment  of  his 
debt  any  property  which  has  been 
fraudulently  transferred,  or  attempted 
to  be  fraudulently  conveyed,  by  his 
debtor."  Revised  Code,  §  3446.  In 
construing  this  statute  the  court  said 
that  it  was  obviously  the  intention  of 
the  legislature  to  enlarge  the  jurisdic- 
tion of  the  court  of  chancery,  and  in 
cases  where  the  simple  and  pure  rela- 
tionship of  debtor  and  creditor  existed 
to  invest  the  creditor  without  a  lien  or 
a  judgment  with  the  privilege  formerly 
confined  to  judgment-creditors.  Rey- 
nolds V.  Welch,  47  Ala.  200. 

'  Case  V.  Beauregard,  loi  U.  S.  688. 
Compare  Manufacturing  Co.  v.  Brad- 
ley, 105  U.  S.  175. 

-  Herring  v.  New  York,  L.  E.  &  W. 
R.R.  Co.,  63  How.  Pr.  (N.  Y.)  502. 

^  Dunlevy  v.  Tallmadge,  32  N.  Y. 
459.  But  the  simple  contract  creditor 
is  not  always  without  redress  in  cases 


§   TZ  RIGHTS    OF    CREDITORS    AT    LARGE.  II5 

The  possibility  of  a  judgment  will  not  suffice.^  The  rule  is 
peremptory.  "A  court  of  equity  never  interposes,"  says 
Ruffin,  C.  J.,^  "  in  behalf  of  a  mere  legal  demand,  until  the 
creditor  has  tried  the  legal  remedies,  and  found  them  inef- 
fectual." It  is  not  intended  by  this  rule  to  exclude  simple 
contract  creditors  from  the  operation  of  the  statutes  against 
fraudulent  conveyances,  they  being,  except  perhaps  as  re- 
gards statutory  liens,  as  much  protected  as  creditors  by 
judgment ;  but  until  such  creditors  have  obtained  a  judg- 
ment and  acquired  a  lien  or  a  right  to  a  lien  upon  the 
debtor's  property,  they  are  not  in  a  position  to  assert  their 
rights  by  a  creditor's  action.^  It  is  observed  by  Brown,  J., 
in  Paulsen  v.  Van  Steenbergh,'*  that  "  a  court  of  equity  is 
not  X\\Q  forum  for  litigating  disputed  claims,  and,  as  a  gen- 
eral rule,  will  not  entertain  an  action  or  afford  relief  to  a 
creditor  until  he  has  established  his  debt  in  a  court  of 
law."  ^  Courts  of  equity  are  not  tribunals  for  the  collec- 
tion of  ordinary  demands.^  "  The  debt,"  said  Field,  J., 
"  must  be  established  by  some  judicial  proceeding,  and  it 
must  generally  be  shown  that  legal  means  for  its  collection 
have  been  exhausted."'' 


where  a  fraudulent  disposition  of  prop-  396  ;    National    Bank   of  Rondout    v. 

erty  has  been  made.     An  attachment  Dreyfus,  14  Weekly  Dig.  (N.  V.)  160. 

or  process  in  that  nature  may  be  se-  ''  65  How.  Pr.  (N.  Y.)  342  ;  Howe  v. 

cured   against   the    fraudulent  debtor,  Whitney,  66  Me.  17;  Taylor  v.  Bow- 

and    the    property    improperly    trans-  ker,  in  U.  S.  no;  Webster  v.  Clark, 

ferred,    or    any    other     property    the  25  Me.  313  ;  Griffin  v.  Nitchcr,  57  Me. 

debtor  may  have,  can  be  seized  under  270. 

such  provisional  process  and  held  pend-  ^  See  Tasker  v.  Moss,  82  Ind.  62; 

ing  the  suit.  Baxter  v.  Moses,  77  Me.  465. 

'  Griffin    v.    Nitcher,    57    Me.    272.  "  Webster    v.    Clark,    25    Me.    314. 

Compare    Crompton    v.    Anthony,    13  See  Dunlevy  v.  Tallmadge,  32  N.  Y. 

Allen  (Mass.)  36  ;  Stephens  v.  White-  457  ;  Bownes  v.  Weld,  3  Daly  (N.  Y.) 

head,  75  Ga.  297.  253. 

^  Brown  v.  Long,  i  Ired.  Eq.  (N.  C.)  ^  Public  Works  v.  Columbia  College, 

193.  17  Wall.  530;  Powell  V.  Howell,  63  N. 

'  Southard  v.  Benner,  72  N.  Y.  426;  C.  284;  Fox  v.  Moyer.  54  N.  Y.  128. 

Geery    v.  Geery,  63  N.  Y.   256.     See  Compare  Case  v.  Beauregard,  loi  U. 

Frisbey  v.  Thayer,  25  Wend.  (N.  Y.)  S.  688.     A  creditor's  bill  may  be  filed 


Il6  RIGHTS    OF    CREDITORS    AT    LARGE.  §   J ;^ 

When  a  conveyance  is  said  to  be  void  or  voidable  against 
creditors  the  reference  is  to  such  parties  when  they  are 
clothed  with  judgments  and  executions,  or  stick  other  titles 
as  the  law  has  provided  for  the  collection  of  debts.^  Judge 
Bronson,  in  Noble  v.  Holmes,^  after  declaring  that  a  fraud- 
ulent sale  could  not,  under  the  provisions  of  the  Revised 
Statutes  of  New  York,  be  impeached  by  a  creditor  at  large, 
added:  "It  must  be  a  creditor  having  a  judgment  and  ex- 
ecution, or  some  other  process  which  authorized  a  seizure 
of  the  goodsT  It  may  be  urged  that,  where  a  debtor  is 
manifestly  guilty  of  fraudulent  conduct  with  reference  to 
his  property,  the  prerequisites  of  a  judgment  and  execution 
will  prove  serious  impediments  to  an  ordinary  contract 
creditor  who  desires  to  take  immediate  action  to  reach  the 
property  which  the  debtor  is  dissipating  or  concealing. 
But  the  answer  to  this  proposition  has  been  that  the  rem- 
edy of  a  creditor  so  situated  is  not  by  creditor's  bill  ;  he 
must  seek  provisional  relief  by  arrest  or  attachment,  or 
both,  in  a  suit  founded  upon  his  contract  claim.'^  A  creditor 
in  this  position  is  not,  as  we  have  seen,  entitled  to  interfere 
by  injunction  before  judgment  with  any  contemplated 
alienation  of  property  by  the  debtor,*  even  after  instituting 
suit  by  attachment.^  So  stockholders  cannot  sue  in  the 
right  of  a  corporation  without  first  trying  to  set  the  body 
itself  in  motion  ;^  and  a  creditor  or  member  who  desires 
to  sue  in  place  of  a  receiver  must  set  forth  that  the  receiver 
declines  to  proceed.''' 

on  a  judgment  at  law,  after  execution,  •*  Wiggins  v.    Armstrong,  2   Johns, 

notwithstanding   the   recovery   of  an-  Ch.  (N.  Y.)  145  ;  Adler  v.  Fenton,  24 

other  judgment  on  the  judgment.    EHz-  How.  411;    Moran   v.    Dawes,  Hopk. 

abethtown  Savings  Inst.  v.  Gerber,  34  Ch.  (N.  Y.)  365.     See  §  52. 

N.  J.  Eq.  132,  note  ;  Bates  v.  Lyons,  7  ^  Martin  v.  Michael,  23  Mo.  50. 

Paige  (N.  Y.)  85.  '  Taylor  v.   Holmes,  127  U.  S.  492  ; 

^  Per  Denio,  J.,  in  Van  Heusen  v.  Greaves  v.  Gouge,  69  N.  Y.  157;  Moore 

Radcliff,  17  N.  Y.  580;  Gross  v.  Daly,  v.  Schoppert,  22  W.  Va.  291  ;  Hawes 

5    Daly    (N.   Y.)    545  ;    McElwain    v.  v.  Oakland,  104  U.  S.  450. 

WiUis,  9  Wend.  (N.  Y.)  561.  '  Fisher  v.    Andrews,    37    Hun  (N. 

*  5  Hill  (N.  Y.)  194.  Y.)  180;  Wait  on  Insol.  Corps.  §  100. 

^  See  Dodd  v.  Levy,  10  Mo.  App.  121. 


§   74  JUDGMENT    CON'CLUSIVE.  II7 

To  recapitulate,  then,  the  judgment  and  execution  are 
necessary  to  a  creditor  before  proceeding  in  equity — First, 
to  adjudicate  and  definitely  establish  the  legal  demand,  and 
save  the  debtor  harmless  from  interference  at  the  instiga- 
tion of  unconscionable  claimants  ;  second,  to  exhaust  the 
legal  remedy.^ 

The  maxim,  '' Lex  neminem' cogit  ad  vana  seu  iiiutilia 
per  agenda,''  has  struggled  for  application  in  cases  where  it 
is  manifest  the  judgment  at  law  will  be  ineffectual  or 
worthless,-  but,  though  the  sympathy  of  the  profession 
seems  to  favor  a  relaxation  of  the  rule  requiring  a  judgment 
and  execution  before  a  proceeding  by  creditor's  bill  will  lie, 
yet,  generally  speaking,  the  absence  of  a  judgment  proves 
fatal  to  such  a  bill.^  A  guarded  statutory  reform  might  be 
suggested  with  a  view  to  enlarge  the  facilities  of  creditors 
to  reach  equitable  assets.  Complainants  holding  liquidated 
demands,  founded  upon  written  instruments  or  express 
contracts,  might  be  given  a  right  to  proceed  to  attack 
transfers,  against  debtors  who  have  made  general  assign- 
ments, or  against  whom  unsatisfied  judgments  rest,  or  who 
have  suspended  business  solely  from  lack  of  funds  or  have 
become  notoriously  insolvent. 

§  74.  Judgment  conclusive  as  to  indebtedness, — In  cases 
where  fraud  is  established,  the  creditor  does  not  claim 
through  the  debtor,  but  adversely  to  him,  and  by  a  para- 
mount title,  which  overreaches  and  annuls  the  fraudulent 
conveyance  or  judgment  by  which  the  debtor  himself 
would  be  estopped.  It  follows  from  the  principles  sug- 
gested, that  a  judgment  obtained  without  fraud  or  collu- 
sion, and   which  concludes  the  debtor,  whether   rendered 


'  See   Merchants'  National   Bank  v.  ing  Co.,  9  Ore.  202  ;  Turner  v.  Adams. 

Paine,  13  R.  I.  594.  46  Mo.  95;  Des  Brisay  v.  Hogan,  53  Me. 

**  See  Lichtenberg  v.  Herdtfelder.  33  554;  Terry  v.  Anderson.  95  U.  S.  636. 

Hun  (N.  Y.)  57,  60,  dissenting  opinion  »  See  Taylor  v.  Bowker,  in  U.  S. 

of  Davis,  P.  J.;  Case  V.  Beauregard,  loi  iio;    Baxter   v.    Moses,    TJ  Me.  476; 

U.  S.  690;  Hodges  V.  Silver  Hill  Min-  Jones  v.  Green,  i  Wall.  330. 


1  li 


JUDGMENT    CONCLUSIVE. 


§   74 


upon  default,  by  confession  or  after  contestation,  is,  upon 
all  questions  affecting  the  title  to  his  property,  conclusive 
evidence  against  his  creditors,  to  establish,  first,  the  rela- 
tion of  creditor  and  debtor  between  the  parties  to  the 
record,  and  secondly,  the  amount  of  the  indebtedness. 
This  principle  is  assumed  in  the  New  York  statute  in  rela- 
tion to  creditors'  bills,^  and  is  so  decided  in  Rogers  v. 
Rogers.*^     The  execution  issued  upon  the  judgment  shows 


'2R.  S.  174.  §38. 

^  3  Paige  (N.  Y.)  379.  See  2  Greenl. 
Ev.  531  ;  Marsh  v.  Pier,  4  Rawle  (Pa.) 
288;  Candee  v.  Lord,  2  N.  Y.  275; 
Decker  v.  Decker,  108  N.  Y.  128;  Mat- 
tingly  V.  Nye,  8  Wall.  373,  and  cases 
cited.  But  compare  Teed  v.  Valen- 
tine, 65  N.  Y.  471.  Creditors  may  of 
course  attack  a  collusive  judgment 
when  it  is  a  fraud  upon  them.  Lewis 
V.  Rogers,  16  Pa.  St.  18;  Sidensparker 
V.  Sidensparker,  52  Me.  481  ;  Edson  v. 
Cumings,  52  Mich.  52  ;  Clark  v.  Doug- 
lass, 62  Pa.  St.  416,  per  Sharswood,  J.; 
Wells  V.  O'Connor,  27  Hun  (N.  Y.) 
428.  Compare  Voorhees  v.  Seymour, 
26  Barb.  (N.  Y.)  569 ;  Meeker  v.  Har- 
ris, 19  Cal.  278;  Thompson's  Appeal, 
57  Pa.  St.  175  ;  Clark  v.  Foxcroft,  6 
Me.  298  ;  Uhlfelder  v.  Levy,  9  Cal.  607. 
See  especially  Shaw  v.  Dwight,  27  N. 
Y.  244 ;  Mandeville  v.  Reynolds,  68  N. 
Y.  545 ;  Burns  v.  Morse,  6  Paige  (N. 
Y.)  108 ;  Whittlesey  v.  Delaney,  73  N. 
Y.  571.  So  the  alienee  from  whom  it 
is  sought  to  recover  property  may  show 
that  the  judgment  is  fraudulent  and 
collusive  (Collinson  v.  Jackson,  14  Fed. 
Rep.  309;  s.  C.  8  Sawyer,  357.  See 
Freeman  on  Judgments,  §§335-7),  or 
that  there  is,  in  fact,  no  indebtedness 
(Clark  v.  Anthony,  31  Ark.  549;  King 
V.  Tharp,  26  Iowa  283 ;  Esty  v.  Long, 
41  N.  H.  103),  for  judgments  may  be 
fraudulent  as  well  as  deeds.  Carter  v. 
Bennett,  4  Fla.  283  ;  Decker  v.  Decker, 
108  N.  Y.  128.     Finch,  J.,  said :    "It 


does  not  alter  the  character  of  this 
fraudulent  arrangement,  or  enable  it  to 
defy  justice,  that  it  was  accomplished 
through  the  agency  of  a  valid  judg- 
ment regularly  enforced.  That  often 
may  be  made  an  effective  agency  in  ac- 
complishing beyond  its  own  legitimate 
purpose  a  further  result  of  fraud  and 
dishonesty."  Decker  v.  Decker,  108  N. 
Y.  128,  135.  One  who  is  in  possession 
of  property  of  the  debtor  transferred 
with  intent  to  defraud  creditors  cannot 
defend  himself  on  the  ground  that  the 
debtor  might  have  had  a  defense  against 
the  judgment  had  he  chosen  to  assert 
it  (Dewey  v,  Moyer,  9  Hun  [N.  Y.] 
479);  but  confession  of  judgment  by 
an  administrator  cannot  deprive  the 
grantee  of  his  intestate  of  the  defense  of 
the  statute  of  limitation.  McDowell  v. 
Goldsmith,  24  Md.  214.  Then  a  de- 
cree confirming  a  conveyance  of  real 
estate  from  a  husband  to  a  wife  in  a 
suit  between  them,  is  not  conclusive 
upon  the  husband's  assignee  in  bank- 
ruptcy, seeking  to  annul  the  transfer  as 
having  been  made  in  fraud  of  creditors. 
Humes  v.  Scruggs,  94  U.  S.  22.  Mr. 
Justice  Hunt  said  in  this  case  :  "  There 
would  be  little  difficulty  in  making  and 
sustaining  fraudulent  transfers  of  prop- 
erty, if  the  parties  thereto  could  by  a 
subsequent  suit  between  themselves  so 
fortify  the  deed  that  no  others  could  at- 
tack it."  See  also  Van  Kleeck  v.  Mil- 
ler, 19  N.  B.  R.  494.  A  debtor  may 
attack  a  judgment  as  having  been  ob- 


§   75  LIEN    BEFORE    FILING    BILL.  II9 

that  the  remedy  afforded  at  law  has  been  pursued,  and  of 
course  is  the  highest  evidence  of  the  fact.  The  return 
shows  whether  the  remedy  has  proved  effectual  or  not, 
and,  because  of  the  embarrassments  which  would  attend 
any  other  rule,  the  return  is  generally  held  conclusive. 
The  court  will  not  ordinarily  entertain  inquiries  as  to  the 
diligence  of  the  officer  in  endeavoring  to  find  property 
upon  which  to  levy.^ 

§  75.  Creditor  must  have  lien  before  filing  bill. — We  must 
then  accept  the  general  rule  that  a  court  of  equity  will  not 
interfere  to  enforce  the  payment  of  debts  until  the  creditor 
has  exhausted  all  the  remedies  known  to  the  law  to  obtain 
satisfaction  of  the  judgment.  It  is  usually  essential  in 
order  to  give  the  court  jurisdiction,  and  to  reach  equitable 
assets,  that  an  execution  should  have  been  issued  upon  the 
judgment,  and  returned  unsatisfied,  or,  if  an  action  is 
brought  in  aid  of  an  execution  at  law,  that  it  be  outstand- 
ing. The  commencement  of  the  action  will  then  give  the 
creditor  a  specific  lien.^  The  rule  that  the  legal  remedy 
must  be  exhausted  by  the  judgment-creditor  before  relief 
can  be  solicited  to  reach  property  not  subject  to  the  lien 
of  the  judgment  is  an  ancient  one.  It  existed  in  England, 
and  was  recognized  by  the  Court  of  Chancery  in  New 
York,  before  the  provisions  made  by  the  Revised  Statutes^ 
of  that  State,  which  require  that  an  execution  be  issued 
and  returned  unsatisfied  in  whole  or  in  part,  before  a  bill 
can  be  filed  to  compel  a  discovery  of  property  and  to  pre- 
vent a  transfer  of  it.    "  This  statute,"  says  Chancellor  Wal- 


tained  by  fraud.     Richardson  v.  Trim-  cases    cited;     Ross  v.  Wood.    70    N. 

ble,   38    Hun  (N.  Y.)  409.     We   may  Y.  9. 

here  state  that  the  frauds  which  will  '  Jones  v.  Green,  i  Wall.  332. 

sustain  a  bill  to  set  aside  a  judgment  or  '  Adsit  v.  Butler,  87  N.  Y.  5S7  ;  be- 

Atcrtt  betweftt  the  parties  rQX\d&xQ(\hy  low,  23  Hun  (N.  Y.)  45;    Crippen  v. 

a  court  of  competent  jurisdiction  are  Hudson,   13  N.  Y.   161  ;  Beck  v.  Bur- 

those  which  are  extrinsic  or  collateral  dett,  i   Paige  (N.  Y.)  305  ;  Uunlevy  v. 

to  the  issues  litigated.     United  States  Tallmadge,  32  N.  Y.  461. 

V.    Throckmorton,  98  U.   S.   61,  and  '  2  N.  Y.  R.  S.  174,  §38. 


I20  JUDGMENTS    SUFFICIENT.  §   76 

worth,  in  Child  v.  Brace/  "  is  only  declaratory  of  a  principle 
which  had  before  been  adopted  in  this  court."  ^  Hence  the 
creditors  of  an  insolvent  partnership  must  acquire  a  legal 
or  an  equitable  lien  upon  the  property  of  the  firm  to  au- 
thorize them  to  invoke  the  equitable  powers  of  the  court 
in  its  administration.^  Nor  does  the  fact  that  the  debtor  is 
an  insolvent  corporation,  and  has  alienated  its  property  in 
contravention  of  the  statute,  authorize  a  resort  to  equity 
until  the  remedy  at  law  has  been  exhausted  by  judgment 
and  execution  returned  unsatisfied,^ 

§  76.  Judgments  sufficient. — An  ordinary  money-judgment 
rendered  in  the  State  in  which  the  debtor  resides  and  the 
concealed  property  is  located,  is  manifestly  a  proper  founda- 
tion for  a  creditor's  suit.  A  bill  of  this  character  may  also 
be  filed  "  to  aid  in  the  collection  of  money  decreed  in 
chancery." ^  "I  have  no  doubt,  however,"  said  Chancellor 
Walworth,  "that  a  creditor,  by  a  decree  in  chancery,  upon 
the  return  of  his  execution  unsatisfied,  is  entitled  to  the 
same  relief,  against  the  equitable  rights  and  property  of  his 
debtor,  as  a  creditor  by  a  judgment  at  law."  ^  A  justice's 
judgment  will  suffice,'^  especially  if  docketed  in  a  court  of 
record.^  And  a  judgment  by  confession,  even  though  de- 
fective in  form  and  particularity  of  statement,  authorizes 


^  4  Paige  (N.  Y.)  309.  See  Greenwood  v.  Brodhead,  8  Barb. 

'^  See  Dunlevy  V.  Tallmadge,  32  N.  Y.  (N.  Y.)  593;  Young  v.  Frier,  9  N.  J. 

460 ;   Adsit  V.  Butler,  87   N.  Y.  587  ;  Eq.  465. 

Wiggins   V.  Armstrong,  2  Johns.  Ch.  ■*  Adee  v.  Bigler,  81  N.  Y.  349. 

(N.  Y.)  144 ;  Hendricks  v.  Robinson,  2  ^  Farnsworth  v.  Strasler,  12  111.  485  ; 

Johns.  Ch.  (N.  Y.)  283;  Brinkerhoff  v.  W^eigtman  v.  Hatch,  17  111.  281. 

Brown,    4    Johns.    Ch.    (N.    Y.)    671;  ^  Clarkson  v.  De  Peyster,  3  Paige  (N. 

Spader  v.  Davis,  5  Johns.  Ch.  (N.  Y.)  Y.)  320, 

280 ;  S.  C.  on  error,  20  Johns.  (N.  Y.)  '^  Bailey  v.  Burton,  8  Wend.  (N.  Y.) 

554;     Willetts    V.    Vandenburgh,    34  339;    Newdigate   v.   Jacobs,    9   Dana 

Barb.  (N.  Y.)  424 ;  Crippen  v.  Hudson,  (Ky.)    18;   Heiatt  v.  Barnes,  5   Dana 

13N.Y.  161;  Brooks  V.  Stone,  19  How.  C^^yO  220;   Ballentine  v.  Beall,  4  111. 

Pr.  (N.  Y.)  396.  204. 

'  Crippen  v.  Hudson,  13  N.  Y.  161 ;  ^  See  Crippen  v.  Hudson    13  N.  Y. 

Dunlevy  v,  Tallmadge,  32  N.  Y.  457.  161. 


§   ^^  JUDGMENTS    INSUFFICIENT.  12  1 

the  creditor  to  impeach  a  fraudulent  transfer.^  So  does  a 
demand  classified  and  allowed  by  a  probate  court.^  Under 
a  judgment  against  joint  debtors  only  part  of  whom  were 
served  with  process,  a  creditor's  action  may  be  prosecuted 
to  reach  joint  property,  but  not  the  separate  property  of 
those  not  served  with  process  in  the  original  suit.^  Supple- 
mentary proceedings  may  be  taken  on  a  judgment  so  re- 
covered, to  reach  joint  property.* 

§  77.  Judgments  insufficient. — It  seems  clear  in  New  York 
at  least,  that  a  creditor's  action  cannot  be  founded  upon  a 
judgment  recovered  in  a  justice's  court  where  the  execution 
had  only  been  issued  to,  and  returned  by,  the  justice.^  It 
should  be  docketed  in,  and  made  a  judgment  of,  a  court  of 
record.  It  then  becomes  as  much  entitled  to  the  aid  of  a 
court  of  equity  as  though  originally  recovered  in  a  court  of 
record,*' 

Again,  a  judgment  in  an  attachment  suit,  where  the  de- 
fendant has  not  been  brought  into  court  so  as  to  make  it  a 
personal  judgment,  is  not  evidence  of  the  debt  in  another 
suit  founded  upon  that  record  ;'''  and  a  creditor's  bill  cannot 
be  brought  upon  a  judgment  barred  by  the  statute  of  limita- 
tions.^ And  an  action  based  upon  a  judgment  rendered 
against  executors  in  their  representative  capacity,  is  not 


'  Neusbaum  v.  Keim,  24  N.  Y.  325.         ■*  Perkins   v.    Kendall,    3  Civ.   Proc. 

If  a  creditor  attacks  a  confession   of  (N.  Y.)  240. 

judgment  as  being  fraudulent  against         '' Crippen  v.  Hudson,   13  N.  Y.  161. 

him  he  must  plead  the  grounds  of  the  See  Dix  v.  Briggs,  9  Paige  (X.  Y.)  595  ; 

objection.    A  general  averment  will  not  Coe  v.  Whitbeck,  11  Paige  (N.  Y.)  42  ; 

suffice.     Meeker  V.  Harris,  19  Cal.  278.  Henderson  v.  Brooks,  3  T.  &  C.  (N.  Y.) 

2  Wright  V.  Campbell,  27  Ark.  637.  445. 
Compare    Catchings    v.   Manlove,    39        "  Bailey  v.  Burton,  S  Wend.  (N.  Y.) 

Miss.  671.  339;    Newdigate   v.   Jacobs,    9    Dana 

«  Billhofer  v.  Heubach,  15  Abb.  Pr.  (Ky.)    18;    Heiatt  v.   Barnes,   5   Dana 

(N.   Y.)    143.     See    Produce   Bank   v.  (Ky.)   220;    Ballentinc  v.  Beall,  4   111. 

Morton,  67  N.  Y.  199.    Compare  How-  204. 

ard  V.  Sheldon,  11   Paige  (N.  Y.)  558;         '  Manchester  v.  McKee,  9  111.  520. 
Commercial    Bank    of    Lake   Erie   v.         "  Fox  v.  Wallace,  31  Miss.  660. 
Meach,  7  Paige  (N.  Y.)  448. 


122  FOREIGN    JUDGMENTS.  §   78 

maintainable  to  set  aside,  as  fraudulent  as  against  creditors, 
a  conveyance  of  real  estate  made  by  a  decedent.^  This  lat- 
ter case  seems  to  result  in  a  denial  of  justice.  The  court 
said  that  if  the  facts  recited  in  the  complaint  were  true  it 
was  the  duty  of  the  executors  to  reclaim  the  real  estate. 
Earl,  J.,  observed  :  "  The  fact  that  the  fraudulent  grantee 
is  one  of  the  executors  furnishes  no  insurmountable  obsta- 
cle. If  she  should  refuse  to  restore  the  lands  to  the  estate, 
she  could  be  removed  from  her  office  of  executrix,  and  then 
the  remaining  two  executors  could,  under  the  act  of  1858, 
disaffirm  the  conveyances  of  the  real  estate  and  bring  an 
action  to  set  them  aside.  Or  the  two  executors  could  com- 
mence the  action  making  the  executrix  a  defendant,  and  in 
such  an  action  obtain  for  the  estate  the  relief  demanded. 
If  the  two  defendants  refused  to  commence  the  action  upon 
the  application  of  the  creditors  or  some  of  them,  they  could 
be  compelled  to  commence  it  by  an  order  of  the  surrogate." 
Parties  experienced  in  suits  instituted  to  annul  fraudulent 
conveyances  will  readily  appreciate  the  perfunctory  manner 
in  which  these  executors  would  be  likely  to  prosecute  their 
associate. 

§  78.  Foreign  judgments. — Usually  a  foreign  judgment 
will  not  suffice  as  the  foundation  of  a  creditor's  bill.  In 
Buchanan  v.  Marsh,^  which  was  an  action  in  the  courts  of 
the  State  of  Iowa  on  a  judgment  rendered  in  Canada,  an 
injunction  was  asked  restraining  the  defendants  from  alien- 
ating or  encumbering  their  real  estate  until  the  rights  of 
the  parties  should  be  determined  at  law.  Wright,  C.  J., 
said  :  "  Plaintiffs  are  not  judgment-creditors.  For  the  pur- 
pose of  the  present  inquiry,  their  action  is  like  any  ordinary 
one  upon  a  note,  account,  or  any  simple  contract,  or  evi- 
dence of  indebtedness.  They  have  a  foreign  judgment  ; 
but  until  it  becomes  a  judgment  in  our  courts,  they  are  no 
more  than  creditors  at  large,  and  until    they  obtain  the 


'  Lichtenberg  v.  Herdtfelder,  103  N.  Y.  302.  *  17  Iowa  494. 


§   7^  FOREIGN    JUDGMENTS.  I  23 

recognition  of  their  claim  by  the  adjudication  of  our  State 
tribunals,  they  have  no  other  or  different  rights  as  to  the 
property  of  their  debtor  than  if  their  demand  was  indorsed 
by  a  less  solemn  or  conclusive  proceeding  or  instrument. 
For,  however  effectual  such  judgment  may  be,  or  whatever 
the  faith  and  credit  to  which  it  may  be  entitled,  it  is  very 
certain  that  it  cannot  be  enforced  here  until  its  validity  is 
recognized  and  passed  upon  by  the  judgment  of  our  courts. 
This  being  so  upon  common-law  principles,  we  know  of  no 
principle  upon  which  plaintiffs  were  entitled  to  this  injunc- 
tion. The  rule  is,  as  far  as  we  know,  without  exception, 
that  the  creditor  must  have  completed  his  title  at  law,  by 
judgment  (if  not  by  execution)  before  he  can  question  the 
disposition  of  the  debtor's  property."  The  weight  of  au- 
thority sustains  this  view.^  On  the  other  hand,  upon  a 
judgment  recovered  in  Pennsylvania,  an  attachment  was 
issued  in  New  Jersey,  and  the  lien  thereby  created  was  held 
to  be  sufficient  to  enable  the  creditor  to  attack  a  fraudulent 
transfer.^  Again,  in  Wilkinson  v.  Yale,'^  a  creditors  bill 
was  maintained  in  the  United  States  Circuit  Court, 
founded  upon  a  judgment  of  a  court  of  the  State  in  wliich 
the  Federal  court  was  sittinff."*  Still  the  c^eneral  rule  is  that 
a  foreign  judgment  ranks  as  a  simple  contract  debt ;  it  does 
not  have  the  force  and  operation  of  a  domestic  judgment 


'  See    McCartney   v.    Bostwick,    31  ^  But  compare  Tompkins  v.  Purcell, 

Barb.  (N.  Y.)  390,  overruled  32  N.  Y.  12  Hun  (N.Y.)  664  ;  Tarboll  v.  Griggs.  3 

53  ;  Claflin  v.  McDermott,  12  Fed.  Rep.  Paige  Ch.  (N.Y.)  208  ;  Steere  v.  Hoag- 

375;  Davis  v.  Bruns,  23  Hun  (N.  Y.)  land,  39  111.  264;  Bullitt  v.  Taylor,  34 

648;    Bcrryman   v.  Sullivan,  21   Miss.  Miss.  708,  743  ;  Brown  v.  Bates,  10  Ala. 

65;  Tarbell  v.  Griggs,  3  Paige  (N.  Y.)  440;  Goodyear  Dental  Vulcanite  Co.  v. 

207;  Farned  v.  Harris,  19  Miss.  366;  Frissclle,  22  Hun  (N.  Y.)  174;  Crim  v. 

Davis  V.  Dean,  26  N.  J.  Eq.  436;  Crim  Walker,  79  Mo.  335  ;  Claflin  v.  McDer- 

v.  Walker,  79  Mo.  335.  mott,  12  Fed.  Rep.  375.    It  would  seem 

'-'  Smith  V.  Muirheid,  34  N.  J.  Eq.  4.  from  perusing  these  cases  that  the  ju- 

See  Watkins  v.   Wortman,  19  W.  Va.  risdiction  to  proceed  in  a  State  court 

79.  upon  a  Federal  judgment  is  problemati- 

2  6  McLean  16.     See  Bullitt  v.  Tay-  cal. 
lor,  34  Miss.  708. 


124  CREDITORS  OF  A  DECEDENT.  §  79 

except  for  the  purposes  of  evidence,  beyond  the  jurisdiction 
in  which  it  is  obtained.^ 

§  79.  Creditors  of  a  decedent. — The  question  of  the  neces- 
sity of  a  judgment  as  the  foundation  of  a  creditor's  pro- 
ceedings, in  cases  where  the  debtor  is  dead,  has  created 
much  dissension  in  the  courts.  Estes  v.  Wilcox,^  an  im- 
portant case  in  the  New  York  Court  of  Appeals,  is  to  the 
effect  that  a  creditor  without  judgment  and  execution  re- 
turned, cannot  maintain  an  action  to  enforce  a  resulting 
trust  under  the  statutes  of  uses  and  trusts,  in  lands  pur- 
chased and  paid  for  by  the  debtor,  and  deeded  to  another, 
although  the  debtor  died  insolvent.  It  was  held  that  these 
facts  did  not  dispense  with  the  observance  of  the  general 
rule  that  a  debt  must  be  fixed  and  ascertained  by  judgment, 
and  the  legal  remedies  exhausted.'^  '  It  is  contended  that 
the  reason  of  the  rule  that  a  creditor's  debt  must  be  ascer- 
tained by  judgment  before  proceeding  in  equity,  does  not 
necessarily  fail  by  the  death  of  the  debtor  before  judgment 
recovered  upon  the  debt.  The  creditor  may  prosecute  the 
claun  to  judgment  against  the  personal  representatives  of 
the  debtor,  and.  although  it  will  not  be  conclusive  against 
his  heirs  or  his  grantees  by  title  acquired  before  his  death, 
it  would  conclude  the  creditor  as  to  the  amount  of  his 
claim.*  But  we  cannot  discover  that  the  judgment  against 
the  personal  representatives  would  be  of  much  worth  to 
the  creditor.^  This  case  certainly  extends  the  requirement 
to  an  extreme  limit.^  The  correctness  of  this  rule  is  not 
uniformly  conceded,  and  in  a  number  of  States  the  princi- 


'  McElmoyle  v.  Cohen,  13  Pet.  312.  den    v.    Brewster,   2    Wall.   196.     See 

""  67  N.  Y.  264.  also  §  73. 

3  See  Allyn  v.  Thurston,  53  N.  Y.  ■*  Estes   v.   Wilcox,   67    N.  Y.    266  ; 

622;   Fox   V.    Moyer,   54  N.  Y,   129;  Burnett  v.  Gould,  27  Hun  (N.  Y.)  366. 

Shaw  V.  Dwight,  27  N.  Y.  249 ;  North  ^  Lichtenberg  v.  Herdtfelder,  103  N. 

American  Fire  Ins,  Co.  v.  Graham,  5  Y.  302. 

Sandf.  (N.  Y.)  200 ;  Jones  v.  Green,  i  *  See  Merchants'  Nat.  Bank  v.  Paine, 

Wall.  332,  per  Justice  Field  ;  Chitten-  13  R.  I.  594. 


§  8o  JUDGMENTS    IN    EQUITABLE    ACTIONS.  I  25 

pie  is  asserted  that  no  proof  of  the  recovery  of  judgment 
is  necessary  where  the  debtor  is  dead,^  as  the  judgment 
would  be  useless  and  unmeaning.^  In  Hagan  v.  Walker,'* 
Mr.  Justice  Curtis,  a  very  learned  and  able  jurist,  held  that 
a  simple  creditor  might  maintain  a  suit  to  remove  a  covin- 
ous conveyance  and  reach  assets,  against  the  administrator 
and  the  fraudulent  alienee  of  a  deceased  debtor.  The  court 
was  of  opinion  that  such  a  case  was  not  to  be  treated  as  an 
application  by  a  judgment-creditor  for  the  exercise  of  the 
ancillary  jurisdiction  of  the  court  to  aid  him  in  executing 
legal  process,  but  came  under  the  head  of  original  jurisdic- 
tion in  equity.^  The  authorities  upon  this  subject  cannot 
he  reconciled.  The  best  reasoning  would  seem  to  be  with 
the  cases  holding  that  no  judgment  need  be  recovered 
as^ainst  the  decedent's  estate,  and  in  favor  of  allowinc:  the 
creditor  both  to  establish  his  claim,  and  to  discover  assets 
to  be  applied  toward  its  payment,  in  the  same  action.  The 
practice  of  allowing  executors  and  administrators  to  prose- 
cute actions  to  annul  fraudulent  transfers,  in  the  interest 
and  right  of  creditors,  will  be  noticed  presently.  Where 
the  personal  representatives  sue  the  necessity  for  judgment 
and  execution  returned  unsatisfied  is  superseded. "^ 

§  80.  Rule  as  to  judgments  in  equitable  actions. — The 
remedy,  it  seems,  must  also  be  exhausted  where  the  judg- 
ment   proceeded    upon    was   rendered    in   an   equity   suit. 


'  Johnson    v.    Jones,   79   Ind.    141  ;  Loomis  v.  Tifft,  16  Barb.  (N.  Y.)  541 

Kipper    v.    Glancey,    2   Blackf.    (Ind.)  (contra,  Estes  v.  Wilcox,  67  N.  Y.  264) ; 

356;  O'Brien  V.  Coulter,  2  Blackf.  (Ind.)  Doran  v.  Simpson,  4  Yes.  651  ;  Alsa- 

421  ;  Spencer  v.  Armstrong,  12  Heisk.  ger  v.  Rowley,  6  Ves.  749;  Wright  v. 

(Tenn.)  707;  Love  v.  Mikals,  11  Ind.  Campbell,  27  Ark.  637. 

227  ;  Spicer  v.  Ayers,  2  T.  &  C.  (N.  '  14  How.  32. 

Y.)  628  ;   Reeder  v.  Speake,  4  S.  C.  ■»  See  Green  v.  Creighton,  23  How. 

293  ;  Haston  v.  Castner,  29  N.  J.  Eq.  106;  Bay  v.  Cook,  31  111.  336  ;  Merry 

536;  Offutt  V.  King,  I  MacA.  (D.  C.)  v.  Fremon,  44  iMo.  518  ;  Snodgrass  v. 

314  ;  Fowler's  Appeal,  87  Pa.  St.  449;  Andrews,    30    Miss.    472.      Compare 

Shurts  V.   Howell,  30  N.  J.  Eq.  418  ;  Hills  v.  Sherwood,  48  Cal.  386. 

Phelps  V.  Piatt,  50  Barb.  (N.  Y.)  430.  "■  Barton  v.  Hosner,  24  Hun  (N.  Y.) 

•^  Piatt  V.   Mead,  9   Fed.  Rep.  96;  471.     See  §§  1 12,  1 13. 


126  JUDGMENTS    TN    EQUITABLE    ACTIONS.  §  8o 

Thus  in  Geery  v.  Geery,^  which  was  an  action  brought  to  set 
aside  conveyances  of  real  estate  alleged  to  have  been  made 
by  the  defendant,  through  other  persons,  to  his  wife,  in 
fraud  of  creditors,  there  was  no  proof  of  the  docketing  of 
a  judgment,  and  of  execution  returned  unsatisfied,  and 
the  point  was  taken  that  the  ordinary  remedy  usually  avail- 
able to  creditors  had  not  been  exhausted.  The  creditor 
sought  to  obviate  this  objection  by  urging  that  the  rule  did 
not  apply  where  the  judgment  sought  to  be  collected  was 
rendered  in  an  equitable  action.  It  appeared  that  the 
foundation  of  the  complainant's  claim  was  a  judgment  ren- 
dered upon  a  partnership  accounting,  but  the  judgment 
had  not  been  docketed,  nor  had  any  execution  been  issued 
upon  it.  Earl,  J.,  said :  "  I  can  perceive  no  reason  for  a 
distinction.  A  suit  in  equity  to  enforce  satisfaction  of  a 
judgment  should  not  be  allowed  so  long  as  there  is  a  more 
simple  and  obvious  remedy.  The  statute  law  gives  a  rem- 
edy by  execution,  and  that  remedy,  upon  every  reason  of 
public  policy  and  convenience,  should  be  exhausted  be- 
fore a  new  suit  should  be  allowed  to  be  maintained."^ 
Then  Johnson,  J.,  observed,  in  Crippen  v.  Hudson,^  that 
"  the  court  of  chancery  required  executions  to  be  returned 
unsatisfied,  when  issued  on  its  own  decrees,  before  it  would 
entertain  creditors' bills  founded  upon  them."^  There  is, 
however,  a  rule  running  through  some  of  the  cases  to  the 
effect  that  where  the  claim  asserted  is  purely  equitable,  and 
such  as  a  court  of  equity  will  take  cognizance  of  in  the  first 
instance,  equity  will  at  the  same  time  go  to  the  extent  of 
inquiring  into  the  matter  of  obstructions  which  have  been 
placed  in  the  way  of  enforcing  the  demand.^    For  instance, 

'  63  N.  Y.  252;  overruling  White  v.     Graham,  5  Sandf.  (N.  Y.)  198;  Speigle- 
Geraerdt,  i  Edvv.  Ch.  (N.  Y.)  336.  myer    v.    Crawford,   6   Paige    (N,  Y.) 

2  See  supra,  §§76,  ^T.     Clarkson  v.     254. 

De  Peyster,  3  Paige  (N.  Y.)  320 ;  S.  P.  '  Halbert   v.   Grant,   4   Mon.    (Ky.) 

Adsit  V.  Butler,  87  N.  Y.  585-589.  583.     Compare   Shea   v.   Knoxville  & 

3  13  N.  Y.  161.  Kentucky  R.R.  Co.,  6  Baxter  (Tenn.) 
*  See   North  Am.   Fire   Ins.  Co.  v.  277. 


§  8l  SPECIFIC    LIEN    BY    ATTACHMENT.  1 27 

where  a  surety  has  paid  money  for  a  principal,  chancery  has 
jurisdiction  of  a  suit  for  its  recovery,  and  the  complainant 
may  add  a  prayer  seeking  to  annul  a  fraudulent  conveyance 
that  stands  in  the  way  of  a  settlement  or  is  calculated  to 
defeat  or  embarrass  the  remedial  action  of  the  court.' 

§  81.  Specific  lien  by  attachment. — In  cases  where  the 
sheriff  takes  property  upon  attachment  which  is  subject  to 
seizure  and  sale,  but  which  has  been  fraudulently  transferred, 
it  seems  that  the  plaintiff,  after  the  service  of  the  at- 
tachment, is  not  a  mere  creditor  at  large,  but,  according  to 
some  of  the  authorities,  one  having  a  specific  lien  upon  the 
goods  attached,  and  that  the  sheriff  has  a  like  lien,  and  the 
right  to  show,  as  a  defense  to  an  action  for  taking  the 
property,  that  the  title  of  the  party  claiming  it  is  fraud- 
ulent as  against  the  attaching  creditor.^  Hence  it  was 
held,  in  an  action  brought  by  a  general  assignee  for  the 
benefit  of  creditors,  to  recover  goods  seized  by  a  sheriff  on 
a  warrant  of  attachment  issued  against  the  assignor,  that  it 
was  permissible  for  the  sheriff  to  show  that  the  assignment 
was  fraudulent  and  void  as  against  the  attaching  creditors.** 
There  is  some  confusion,  however,  in  the  authorities  on  the 
question  of  the  right  of  an  attaching  creditor  to  attack 
fraudulent  transfers.  The  Supreme  Court  of  Nebraska 
and  the  courts  of  some  other  States  deny  such  right  in  a 
variety  of  instances.^  The  Nebraska  case  is  rested  uj)C)n 
the  authority  of   Brooks  v.  Stone, ^  which  proceeds  on  the 


'  Waller  v.  Todd,  3  Dana  (Ky.)  508.  '  Carr  v.  Van  Hoesen.  26  Hun  (N. 

Compare  Smith  v.  Rumsey,  33  Mich.  Y.)  316.     Compare   Bates  v.  Plonsky, 

184;    especially,    Swan    v.    Smith,    57  28  Hun  (N.  Y.)  1 12. 

Miss.  548.     But  see  §85.  ■*  Wei!  v.  Lankins,  3  Neb.  384;  Ten- 

*  Gross  V.  Daly,  5  Daly  (N.  Y.)  542  ;  nent  v.  Battey,  18  Kan.  324;  Martin  v. 

Rinchey  v.  Stryker,  28  N.  Y.  45  ;  S.  C.  Michael,  23  Mo.  50;  Greenleaf  v.  Mum- 

26  How.    Pr.  75;  Noble  v.  Holmes,  5  ford,  19  Abb.  Pr.  (N.  Y.)  469;  Mills  v. 

Hill  (N.  Y.)  194;  Van  Etten  v.  Hurst,  Block,  30  Barb.  (N.  Y.)  549;  Melville 

6  Hill  (N.  Y.)  311  ;  Sheafe  v.  Shcafe,  40  v.  Brown,  16  N.  J.  Law  364  ;  McMinn 

N.  H,  516;  Webster  v.  Lawrence,  47  v.  Whelan,  27  Cal.  300. 

Hun  (N.  Y.)  565.  '  19  How.  Pr.  (N.  Y.)  395. 


128  SPECIFIC    LIEN    BY    ATTACHMENT.  §  8 1 

theory  that  the  creditor's  remedy  at  law  is  not  exhausted, 
his  claim  is  not  established,  and  perhaps  he  will  never  get  a 
judgment.^  So  garnishment  process  does  not  create  a  suf- 
ficient lien  to  uphold  a  creditor's  bill.^  In  New  York,  a 
State  in  which  the  authorities  relating  to  the  different 
phases  of  our  subject  are  burdened  with  subtle  distinctions, 
it  is  said  that  an  attaching  creditor  could  not  maintain  an 
independent  action  in  the  nature  of  a  creditor's  bill  to  set 
aside  a  fraudulent  transfer  of  a  chose  in  action.^  This  case 
rests  upon  the  theory  that  the  attachment,  owing  to  the 
nature  of  the  property,  created  no  lien  ;  but,  where  a  lien 
is  in  fact  acquired,  the  rule,  as  already  stated,  seems  to  be 
different,"^  especially  when  the  attaching  creditor  is  a  de- 
fendant, at  the  suit  of  the  fraudulent  alienee,  and  relief 
will  be  in  some  instances  extended,  both  in  that  State  and 
in  sister  States,  for  the  vindication  of  the  lien.^  In  Bowe 
V.  Arnold^  the  courts  of  New  York  held  that  the  plaintiffs, 
in  an  action  instituted  by  attachment,  could  not  join  with 
the  sheriff  in  a  suit  against  an  assignee  claiming  the  prop- 
erty under  an  assignment  which  it  was  sought  to  set  aside 
in  the  action  as  fraudulent.  It  was  conceded  that  such 
parties  might  join  in  that  State,'''  in  actions  to  collect  debts, 
effects,  or  choses  in  action  attached  by  the  sheriff,^  but  the 
court  observed  that  this  was  not  such  a  case.     The  counsel 


'  Compare  Jones  v.  Green,  i  Wall.  v.    McGill,    52    Iowa    128;    Heye  v. 

331.     See  §73.  Bolles,  33  How.  Pr.  (N.  Y.)  266;  Mer- 

''  Bigelow  V.  Andress,  31  111.  322.  riam    v.  Sewall,  8   Gray  (Mass.)  316  ; 

^  Thurber  v.  Blanck,  50  N.  Y.  80.  Falconer  v.  Freennan,  4  Sandf.  Ch,  (N. 

•*  Carr  v.  Van  Hoesen,  26  Hun  (N.  Y.)  565  ;  Stone  v.  Anderson,  26  N.  H. 

Y.)  316 ;  Rinchey  v.  Stryker,  28  N.  Y.  506  ;  Dodge  v.  Griswold,  8  N.  H.  425  ; 

45,     Compare  Frost  v.  Mott,  34  N.  Y.  Hunt  v.  Field,  9  N.  J.  Eq.  36 ;  Will- 

255;  Smith  V.  Longmire,  24  Hun  (N.  iams    v.  Michenor,   11  N.J.  Eq.  520; 

Y.)  257;    Hall  V.   Stryker,  27  N.  Y.  Sheale  v.  Sheafe,  40  N.  H.  516. 

596;  Castle  V.   Lewis,  78  N.  Y.   131  ;  "^  18  Weekly  Dig.  (N.  Y.)  326;  s.  C. 

Ocean  Nat.  Bank  v.  Olcott,  46  N.  Y.  31  Hun  (N.  Y.)  256  ;  affi'd  loi  N.  Y. 

12  ;  Deutsch  v.  Reilly,  57  How.  Pr.  (N.  652. 

Y.)  75.  "  See  N.  Y.  Code  Civ.  Pro.  §§  655-667. 

*  Heyneman  v.  Dannenberg,  6  Cal.  ^  Compare  Thurber  v.  Blanck,  50  N. 

378;  Scales  V.  Scott,  13  Cal.  76  ;  Joseph  Y.  86  ;  Lynch  v.  Crary,  52  N.  Y.  183. 


§  8 1  SPECIFIC    LIEN    BY    ATTACHMENT.  1 29 

sought,  upon  the  authority  of  Bates  v.  Plonsky,'  to  main- 
tain the  action  as  being  instituted  for  the  protection,  pres- 
ervation, and  enforcement  of  the  Hen  obtained  by  the  sup- 
posed levy  of  the  attachment,  but  the  court  said  that  the 
precedent  cited  was  a  suit  of  a  different  nature,  and  was 
prosecuted  merely  to  enjoin  the  distribution  of  a  fund 
until  the  rights  of  the  conflicting  claimants  could  be  estab- 
lished. It  is  observed  in  the  course  of  the  opinion  that  a 
creditor  could  only  file  a  bill  to  annul  a  fraudulent  transfer 
after  return  of  execution  unsatisfied,"  or  in  aid  of  the  exe- 
cution after  the  recovery  of  a  judgment.'^ 

The  judgment  in  this  case  is  undoubtedly  correct,  but  in 
view  of  the  other  authorities  cited,  it  can  scarcely  be  con- 
sidered as  leaving  the  law  of  that  State  relative  to  the  rights 
of  an  attaching  creditor  in  a  very  clear  or  satisfactory  con- 
dition. We  deny  that  a  mere  attaching  creditor  can,  under 
any  correct  theory  of  law,  become  an  actor  in  a  creditor's 
suit.  Indeed  the  underlying  principles  of  the  cases  in  which 
it  is  sought  to  make  a  lien  acquired  by  the  provisional 
remedy  of  attachment  the  practical  equivalent  of  a  lien 
procured  by  final  judgment,  are  subversive  of  the  time- 
honored  policy  and  rule  of  the  courts,  that  a  creditor's  bill 
must  be  founded  upon  a  definite  claim,  established  by  a 
judgment  at  law.^  If  the  innovations  in  modern  j)n)ce(lure 
call  for  the  abrogation  of  this  old  chancery  practice,  it 
should  not  be  superseded  by  indirection,  but  deliberately, 
and  by  some  carefully  formulated  legislative  substitute. 
The  requirement  is  neither  artificial  nor  technical  ;  it  is  a 
necessary  protection  and  safeguard  to  the  debtor.  Mani- 
festly, where  the  property  in  controversy  is  of  such  char- 
acter as  not  to  be  susceptible  to  an  attachment  lien,  the 
attaching  creditor  cannot,  either  as   plaintiff  or  defendant, 

'  28  Hun  (N.  Y.)  112.  73;  Ballou  v.  Jones,   13   Hun  (N.  Y.) 

*  See  Chatauque  Co.  Bank  v.  Risley,     629. 
19  N.  Y.  370  ;  Cole  v.  Tyler,  65  N.  Y.        »  See  Adsit  v.  Duller.  87  N.  Y.  585. 

^  See  §73. 
9 


130     PROPERTY  TAKEN  IN  NAME  OF  THIRD  PARTY.     §  82 

avoid  or  attack  any  alienation  or  disposition  that  may  have 
been  made  of  it ;  he  has  no  status  and  no  lien.  Where, 
however,  an  attachment  lien  has  been  actually  acquired,  and 
the  officer  or  attaching  creditor  is  made  defendant  in  a  suit 
by  the  fraudulent  alienee,  the  efficacy  of  the  lien  may  be 
vindicated  by  setting  up  the  fraud  by  way  of  defense,  be- 
cause the  plaintiff  will  be  forced  to  recover  upon  -the 
strength  of  his  own  title,  and  if  it  be  shown  that  such  title 
is  affected  wnth  fraud  as  regards  the  defendant  or  attaching 
creditor,  the  plaintiff  will  fail  to  make  out  a  good  title. 

§  82.  Property  of  the  debtor  taken  in  name  of  third  party. — 
The  rules  of  procedure  in  cases  where  property  has  been 
paid  for  by  the  debtor,  but  the  title  taken  in  the  name  of 
third  parties,  have  already  been  noticed.^  The  New  York 
Court  of  Appeals,  in  The  Ocean  National  Bank  v.  Olcott,^ 
said,  ill-advisedly  as  we  think,  that  it  was  difficult  to  per- 
ceive the  reason  for  any  distinction  between  the  rights  of 
creditors  as  to  the  property  fraudulently  transferred  by  the 
debtor  personally,  and  property  paid  for  by  him  and  trans- 
ferred by  the  vendor  or  grantor  to  a  third  person.  "  Why," 
said  Chief-Justice  Church,  "  should  creditors  have  different 
and  superior  rights  to  enforce  their  debts,  in  the  latter  case, 
to  those  enjoyed  in  the  former  ?  T  can  see  no  reason  for 
any  distinction,  and  I  do  not  believe  the  statute  has  created 
any.  But,  in  either  case,  the  commencement  of  an  equita- 
ble action  is  necessary  to  constitute  a  lien  or  charge,  in  any 
legal  sense,  upon  the  land The  harmony  and  analo- 
gies of  the  law  are  better  preserved  by  requiring  all  availa- 
ble legal  remedies  to  be  resorted  to,  as  a  preliminary  requi- 
site to  an  action  for  the  application  of  the  trust  property." 
In  Ohio  it  is  said  that  the  statute^  does  not  apply  to  cases 
where  the  title  is  taken  in  the  name  of  a  third  party  for  the 


'  See  §  57.  lating  the  mode  of  administering  as- 

^  46  N.  Y.  22.  signments  in  trust  for  the  benefit  of 

"  Swan  &  Sayler's  Stats.  397,  regu-     creditors. 


§  S^  WHEN    JUDGMENT    IS    UNNECESSARY.  I3I 

reason  that  the  avoidance  of  the  conveyance  merely  leaves 
the  title  in  the  grantor,  which,  of  course,  does  not  benefit 
the  creditor  ;  ^  such  an  interest  it  is  argued  must  be  reached 
by  a  creditor's  bill.^  It  cannot  be  sold  on  execution.^  This 
question  arose  in  Spaulding  v.  Fisher.*  It  was  held  that 
property  purchased  with  the  funds  of  the  debtor,  though 
taken  in  the  name  of  a  third  party,  was  the  property  of  the 
debtor  as  regards  his  creditors.  The  court  said :  "  Its 
fraudulent  transfer  and  concealment  is  equally  established, 
whether  the  transfer  is  directly  from  the  debtor  or  from 
another  by  his  direction  and  procurement,  the  property 
transferred  having  been  purchased  wnth  his  funds.  The  ob- 
ject of  the  statute  is  to  afford  a  remedy  to  the  creditor 
against  any  one  to  whom  the  property  of  his  debtor,  no  mat- 
ter in  what  it  consisted,  or  how  situated,  has  been  fraudu- 
lently transferred  for  the  purpose,  and  with  the  intent  on 
the  part  of  the  debtor  transferring,  and  the  individual  rc- 
ceivins:  such  transfer,  to  conceal  the  same,  so  as  '  to  secure  it 
from  the  creditors  and  prevent  its  attachment  or  seizure  on 
execution.'"^ 

§  83.  When  judgment  is  unnecessary. — It  has  been  de- 
cided, though  the  question  is  a  debatable  one,  that  in  special 
cases,  if  the  execution  cannot  be  issued  in  the  State  in 
which  the  land  lies,  it  will  suffice  if  issued  in  the  State  of 
the  debtor's  residence  ;  ^  and  if  the  debtor's  property  is  in 
the  hands  of  a  receiver  appointed  by  the  court,  so  that  a 

'  Shorten  v.  Woodrow,  34  O.  S.  645.  but  had  been  conveyed  to  anotlicr  pt-r- 
2  Bomberger  v.  Turner,  13  O.  S.  263.  son  in  order  to  secure  it  from  his  credit- 
See    Martin   v.    Elden,   32  O.   S.   282.  ors,  could  not  be  attached  or  taken  on 
Compare  Combs  v.  Watson,  32  O.  S.  execution  as  his  property.     Hamilton 
228.  V.  Cone,  99  Mass.  478 ;  Howe  v.  Bish- 
»  Garfield    v.  Hatmaker,   15    N.  Y.  op,  3  Met.  (Mass.)  26.     See,  also,  Gar- 
475.  field  V.  Hatmaker.  15  N.  Y.475  ;  Web- 
•*  57  Me.  415.     See  §  57.  ster  v.  Folsom,  58  Me.  230.     Compare 
"  In  Massachusetts,  until  the  St.  of  Guthrie  v.  Gardner,  19  Wend.  (N.  Y.) 
1844,  c.  107,  took  effect,  land  paid  for  414. 

and  occupied    by  a  debtor,  the  legal  "  McCartney  v.  Bostwick,  32  N.  Y. 

title  to  which  had  never  been  in  him,  53. 


132  WHEN    JUDGMENT    IS    UNNECESSARY.  §  83 

levy  cannot  be  made,  levy  is  excused  ;^  and  where,  by  rea- 
son of  special  circumstances,  the  creditor  has  no  remedy  at 
law,  it  has  been  argued  that  the  legal  remedy  cannot  be 
exhausted  before  proceeding  in  equity.^  McCartney  v. 
Bostvvick  ^  seems  to  be  in  its  general  statements  overruled 
by  Estes  v.  Wilcox  ;*  at  least  the  courts  have  so  held.^  A 
distinction  is  drawn  in  McCartney  v.  Bostwick  between 
property  fraudulently  alienated  by  the  debtor,  and  property 
paid  for  by  him  and  taken  in  the  name  of  a  third  party. 
In  the  former  instance,  the  proceeding  is  to  remove  imped- 
iments in  the  way  of  reaching  the  debtor  s  property  ;  in  the 
latter,  it  is  to  charge  with  a  statutory  lien  the  property  of 
a  third  party,  which  the  debtor  never  owned  ;  in  the  one 
case,  it  is  to  exercise  auxiliary  jurisdiction  in  aid  of  legal 
process ;  in  the  other  to  enforce  a  trust  of  which  the  courts 
of  law  have  no  jurisdiction.  We  have  already  shown  that 
Chief-Justice  Church,  in  a  later  case,  could  see  no  reason 
for  this  distinction.^  In  a  controversy  which  arose  in 
Georgia,  it  was  decided  that  where  a  creditor  of  an  insol- 
vent estate  was  under  injunction  not  to  sue  the  executor, 
this  constituted  a  good  excuse  for  not  obtaining  judgment 
on  his  debt  before  proceeding  by  bill  in  equity  to  cancel  a 
voluntary  conveyance  made  by  the  testator  in  his  lifetime.''' 
The  court  in  this  case  seemed  determined  to  favor  the 
creditor,  for  it  was  held  that  if,  during  the  pendency  of  the 
bill,  a  judgment  or  decree  establishing  the  amount  of  the 
debt  was  obtained  against  the  executor,  it  might  be  brought 
into  the  bill  by  way  of  amendment,  and  used  as  effectively 


1  Stewart  v.  Beale,  7  Hun  (N.  Y.)  Y.)  143,  overruled  in  other  respects,  59 

405.     This  case  contains  an  important  N.  Y.  212.     See  §  80, 

V  review  of  the  authorities,  and  is  af-  ^  32  N.  Y.  53.. 

iiirmed  without  an  opinion  in  the  Court  •*  67  N.  Y.  264. 

of  Appeals.     See  68  N.  Y.  629.     See  ^  Evans  v.  Hill,  18  Hun  (N.  Y.)  465. 

also  Adsit  v.  Sanford,  23  Hun  (N.  Y.)  ^  The  Ocean  National  Bank  v.  Olcott, 

49.  46  N.  Y.  22.     See  §  82. 

'  Ka,mp  v.  Kamp,  46  How.  Pr.  (N.  '  Compare  Shellington  v.  Howland, 

53  N.  Y.  371. 


§  S^  WHEN    JUDGMENT    IS    UNNECESSARY.  1 33 

as  if  the  adjudication  had  preceded  the  fiUng  of  the  bill, 
and  had  been  originally  alleged  therein.^  Where  the  per- 
formance of  a  condition  becomes  impossible  or  illegal,  per- 
formance is  excused.^  So  in  some  States  creditors  may 
proceed  against  an  insolvent  estate  without  the  return  of 
an  execution.^  In  Case  v.  Beauregard,''  Mr.  Justice  Strong 
observed  :  "  But,  after  all,  the  judgment  and  fruitless  exe- 
cution are  only  evidence  that  his  legal  remedies  have  been 
exhausted,  or  that  he  is  without  remedy  at  law.  They  are 
not  the  only  possible  means  of  proof.  The  necessity  of 
resort  to  a  court  of  equity  may  be  made  otherwise  to  ap- 
pear. Accordingly  the  rule,  though  general,  is  not  without 
many  exceptions.  Neither  law  nor  equity  requires  a  mean- 
ingless form,  'Bona,  scd  impossibilia  non  cogit  lex!  It 
has  been  decided  that  where  it  appears  by  the  bill  that  the 
debtor  is  insolvent  and  that  the  issuing  of  an  execution 
would  be  of  no  practical  utility,  the  issue  of  an  execution 
is  not  a  necessary  prerequisite  to  equitable  interference.^ 
This  is  certainly  true  where  the  creditor  has  a  lien  or  a 
trust  in  his  favor."  °  Still  the  observations  of  Mr.  Justice 
Strong  are  not  being  accorded  hearty  approval  even  in  the 
Supreme  Court  itself. '^  In  Russell  v.  Clark, *^  Chief- Justice 
Marshall,  in  discussing  the  general  subject,  said  :  "  If  a 
claim  is  to  be  satisfied  out  of  a  fund,  which  is  accessible 


'  Cleveland  v.  Chambliss,  64  Ga.  352.  "  loi  U.  S.  690. 

2  Shellington  v.  Howland,  53  N.  Y.  ^  Citing  Turner  v.  Adams,  46  Mo, 

374;  Cohen  v.  N.  Y.  Mutual  Life  Ins.  95;   Postlewait  v.  Howes,  3  la.  365  ; 

Co.,  50  N.  Y.  610;  Semmes  V.  Hartford  Ticonic  Bank  v.  Harvey,   16  la.  141; 

Ins.  Co.,  13  Wall.  158.  Botsford  v.  Beers,  n  Conn.  369;  Payne 

'  Steere   v.    Hoagland,   39   111.   264;  v.  Sheldon,  63  Barb.  (N.  Y.)  169.     See 

McDowell  V.  Cochran,  11  111.  31 ;  Bay  Fink  v.  Patterson,  21  Fed.  Rep.  609. 

V.  Cook,  31  III.  336  ;  Hagan  v.  Walker,  ^  See  Austin  v.  Morris,  23  S.  C.  403. 

14  How.  32;  Merry  v.  Fremon,  44  Mo.  '  Taylor  v.  Bowker.  iii  U.  S.  no; 

518;  Haston  v.  Castner,  29  N.  J.  Eq.  People's  Savings  Bank  v.  Bates,  120 

536 ;   Johnson  v.  Jones,  79  Ind.  141  ;  U.   S.    556.      Compare   Thompson   v. 

Piatt  V.  Mead,  9  Fed.  Rep.  96.     Com-  Van  Vechten,  27  N.  Y.  568.  582 ;  Bax- 

pare  Crompton  v.  Anthony,  13  Allen  ter  v.   Moses,  77    Me.  476;  Jones  v. 

(Mass.)  36  ;   Wright  v.  Campbell,  27  Green,  i  Wall.  330. 

Ark.  637.     See  §  79.  "7  Cranch  89. 


134  ABSCONDING    DEBTORS.  §  84 

only  by  the  aid  of  a  court  of  chancery,  application  may  be 
made,  in  the  first  instance,  to  that  court,  which  will  not 
require  that  the  claim  should  be  first  established  in  a  court 
of  law."^  Then,  as  we  shall  presently  see,^  in  cases  where 
the  statute  gives  a  new  remedy  in  favor  of  creditors  at 
large,  by  giving  to  an  assignee  or  trustee  for  their  benefit 
a  statutory  right  to  property  conveyed  in  fraud  of  creditors, 
this  statutory  right  takes  the  place  of  the  specific  lien  re- 
quired by  law  as  a  condition  of  the  right  of  individual 
creditors  to  contest  the  validity  of  the  transfers.'^ 

§  84.  Absconding  and  non  -  resident  debtors. — The  fact 
that  the  debtor  is  a  non-resident,  and  has  no  property 
within  the  State,  is  not  proof  that  all  the  legal  remedies 
have  been  exhausted.^  If  he  has  fraudulently  alienated 
real  property  within  the  State,  his  interest,  whatever  it 
may  be,  must  be  first  reached  by  attachment.^  Where, 
however,  the  debtor  has  absconded  so  that  no  personal 
judgment  can  be  obtained  against  him,  and  there  is  no 
statutory  proceeding  by  which  his  property  can  be  reached, 
it  has  been  held  that  a  creditor's  bill  will  lie  in  the  first  in- 
stance, and  from  the  necessity  of  the  case.''  It  is  con- 
sidered as  analogous  to  a  proceeding  to  reach  and  subject 
the  equities  of  a  deceased  debtor  to  the  claims  of  creditors, 
or  to  satisfy  a  debt  from  a  specific  equitable  fund,  as  to  en- 
force a  lien,  in  neither  of  which  cases  is  a  personal  judg- 
ment required.'''  A  full  review  of  the  authorities  upon  this 
question  may   be  found  in  Merchant's  National  Bank  v. 


'  See  Shufeldt  V.  Boehm,  96  111.  563 ;  Greenway    v.    Thomas,    14    111.    272. 

Steere  v.  Hoagland,  39  111.  264.  Contra,  Anderson  v.  Bradford,  5  J.  J. 

'  See  Chap.  VII.  Marsh  (Ky.)  69  ;  Scott  v.  McMillen,  i 

^  Southard  v.  Banner,  72  N.  Y.  427  ;  Litt.  (Ky.)  302. 

Barton  v.  Hosner,  24  Hun  (N.  Y.)  471 ;  ^  See  Turner  v.  Adams,  46  Mo.  95. 

Cady  V.  Whaling,  7  Biss.  430 ;  Cragin  ■>  Pendleton  v.  Perkins,  49  Mo.  565. 

V.  Carmichael,  2  Dillon  520;  Piatt,  As-  Compare  O'Brien  v.  Coulter,  2  Blackf. 

signee,  v.  Matthews,  10  Fed.  Rep.  280.  (Ind.)  421  ;  Russell  v.  Clark,  7  Cranch 

*  Ballou  V.Jones,  13  Hun  (N.  Y.)  631.  89,  per    Chief- Justice  Marshall.     See 

°  Dodd  V.  Levy,  10  Mo.  App.  121  ;  §79. 


§  85  PRACTICE  IN  INDIANA  AND  NORTH  CAROLINA.  I  35 

Paine/  an  important  and  well-considered  case.  The  court 
there  maintain  the  right  of  a  creditor,  before  the  recovery 
of  judgment,  to  file  a  bill  to  reach  equitable  assets  where 
the  absconding  debtor  had  left  no  legal  assets  liable  to  at- 
tachment,^ and  cite  in  support  of  their  conclusion  cases 
from  Kentucky,'^  Virginia,*  Indiana,^  South  Carulina.''  and 
Missouri,''  and  adopt  the  views  of  the  Supreme  Court  of 
Missouri,  already  quoted. 

§  85.  Exceptional  practice  in  Indiana  and  North  Carolina. 
— In  Indiana  a  novel  practice  as  to  joinder  of  claims 
prevails.  Thus  a  claim  to  cancel  a  conveyance  of  real 
property  from  a  husband  to  his  wife,  as  being  fraudulent 
against  creditors,  may  be  united  with  a  demand  against  the 
husband  arising  out  of  contract.^  Then  in  an  action 
against  a  husband  and  v/ife,  instituted  to  obtain  judgment 
against  the  husband  for  the  price  of  goods  sold,  a  Cfaud- 
ulent  conveyance  from  the  husband  to  the  wife  may  be  set 
aside  so  as  to  let  in  the  lien  of  the  judgment  when  re- 
covered.'^ It  should  be  observed  that  this  practice  is  wholly 
at  variance  with  the  prevalent  rule  that  only  judgment- 
creditors  can  attack  fraudulent  transfers.^*^  Nevertheless  its 
technical  correctness  seems  to  be  recognized  in  North 
Carolina.  There  the  court  declare  it  obvious  that  the  rule 
exacting  the  recovery  of  a  judgment  at  law  before  proceed- 
ing in  equity  grew  out  of  the  relations  of  the  two  courts 
under  the  former  system,  one  acting  as  an  aid  to  the  other, 

'  13  R.  I.  592.  •*  Peay  v.  Morrison's  Exrs.,  10  Gratt. 

*  Scott   V.    McMillen,    I    Litt.  (Ky.)  (Va.)  149. 

302.    Compare  Russell  V.  Clark's  Exrs.,  *  Kipper  v.  Giancey.  2  Blackl".  (Ind.) 

7  Cranch   69,89;  Miller  v.  Davidson,  356;    O'Brien    v.    Coulter,    2    Blackl'. 

8  111.  518,  522  ;  Greenway  v.  Thomas,     (Ind.)  421. 

14  111.  271  ;    Anderson  v.  Bradford,  5         "  Farrar  v.    Haseldcn,  9   Rich.  Eq. 

J.   J.    Marsh  (Ky.)  69;    Meux  v.  An-  (S.  C.)  331. 

thony,    II    Ark.   411.     See  Turner  v.         '  Pendleton  v.  Perkins,  49  Mo.  565. 
Adams,  46  Mo.  95,  99;  McDermutt  v.        "  Lindley  v.  Cross,  31  Ind.  106. 
Strong,  4  Johns.  Ch.  (N.  Y.)  687,  689.  '  Frank  v.  Kessler,  30  Ind.  8. 

=  ScoU   V.    McMillen,    i    Litt.    (Ky.)         '"  See  Mills  v.  Block.  30  Barb.  (N.V.) 

•302.  549-     See  ^73. 


136  rUACTICE  IN  INDIANA  AND  NORTH  CAROLINA.  §  85 

and  that  it  was  essential  to  tlic  harmony  of  their  action  in 
the  exercise  of  their  separate  functions  in  the  administra- 
tion of  the  law.  Chief-Justice  Smith  continuing,  said  : 
"  It  must  of  necessity  cease  to  have  any  force,  when  the 
powers  of  both,  and  the  functions  of  each,  are  committed 
to  a  single  tribunal,  substituted  in  place  of  both.  Why 
should  a  plaintiff  be  compelled  to  sue  for  and  recover 
[judgment  on]  his  debt,  and  then  to  bring  a  new  action  to 
enforce  payment  out  of  his  debtor's  property  in  the  very 
court  that  ordered  the  judgment  ?  Why  should  not  full 
relief  be  had  in  one  action,  when  the  same  court  is  to  be 
called  on  to  afford  it  in  the  second  ?  The  policy  of  the 
new  practice,  and  one  of  its  best  features,  is  to  furnish  a 
complete  and  final  remedy  for  an  aggrieved  party  in  a  single 
court,  and  without  needless  delay  or  expense."  ^  This  method 
of  procedure  constitutes  a  startling  innovation.  New 
York,  the  birthplace  and  stronghold  of  the  reformed  pro- 
cedure, clings  tenaciously  to  the  old  practice  of  requiring  a 
judgment  and  execution  before  an  appeal  can  be  made  to 
the  equity  side  of  the  court.  Not  only  has  the  rule  been 
rigidly  enforced  in  that  State,  but,  as  is  shown  elsewhere, 
it  has  been  extended  and  strengthened.^  The  rule  has  been 
relaxed  in  other  States,  but  the  cases  which  completely 
subvert  or  overturn  it  are  comparatively  few.  The  old 
method  of  procedure  did  not  result,  as  the  court  supposed 
in  Bank  v.  Harris,^  wholly  from  the  relation  of  courts  of 
law  to  courts  of  equity,  nor  is  the  necessity  for  its  observ- 
ance abrogated  by  the  amalgamation  of  these  jurisdictions. 


'  Bank   v.   Harris,    84    N.    C.    210.  their   individual   liabilities    under    the 

Claims  for  judgment  upon  coupons  and  charter.     Glenn  v.  Farmers' Bank,  72 

for   a  mandamus   to   coerce   payment  N.  C.  626. 

were  joined.     McLendon   v.  Commis-  -  See  Estes  v.  Wilcox,  67  N.  Y.  264 

sioners  of  Anson,  71   N.  C.  38.     So  it  Burnett  v.  Gould,  27  Hun  (N.  Y.)  366 

was  held  competent  to  proceed  in  the  Crippen    v.    Hudson,    13   N.  Y.    161 

same  action  against  an  insolvent  debtor  Adee   v.    Bigler,   81    N.   Y.   349.     See 

bank   and   against   stockholders  upon  §§  79,  80. 

=  84  N.  C.  210.     ■ 


§  S6  RETURN    OF    EXECUTION    UNSATISFIED.  1 37 

If  the  creditor  is  to  be  allowed  to  prove  and  recover  judg- 
ment upon  his  simple  demand,  and  cancel  fraudulent  con- 
veyances, or  reach  equitable  assets  in  the  same  action,  it 
would  seem  to  follow  that  the  usual  incidents  of  a  creditor's 
suit  would  attach  to  the  proceeding.  The  creditor  in  an 
action  for  assault  and  battery,  libel,  or  slander,^  might  ap- 
ply for  an  injunction  against  the  debtor,  or  for  a  receiver 
of  his  property,  or  embarrass  him  by  filing  a  lis  pendens. 
The  time-honored  rule  that  the  debtor's  manafrement  and 
control  of  his  property  should  not  be  interfered  with  by 
injunction  or  otherwise,  before  judgment,  would  be  up- 
rooted,^ and  an  unscrupulous  creditor,  having  only  the  faint- 
est shadow  of  a  claim,  could  work  out  the  debtor's  financial 
destruction.  The  ancient  practice  must  not  be  regarded  as 
technical  or  artificial,  but  as  a  safeguard  to  the  debtor  dic- 
tated alike  by  reason  and  necessity.  If  the  practice  is  to 
undergo  a  change,  as  seems  likelv  in  some  States,  then  the 
joinder  should  be  limited  to  cases  of  liquidated  demands 
of  creditors,  certain  in  their  character,  and  provisional  re- 
lief should  be  withheld.  The  union  is  calculated  to  crowd 
into  a  single  action  a  multitude  of  complicated  issues  con- 
cerning distinct  transactions,  as  to  the  debt  and  the  facts 
attending  the  alienation,  a  result  always  to  be  deprecated  ; 
and  would  necessitate  the  presence  of  the  alleged  fraud- 
ulent vendee  in  the  action.^ 

§  86.  Return  of  execution  unsatisfied. — A  cloud  of  cases 
may  be  cited  to  the  general  effect  that,  to  reach  personal 
property  or  equitable  assets,  by  bill,  a  creditor  must  first 
secure  the  return  of  an  execution  unsatisfied'*  unless  it  can 


'See  §90.  V.   Burnett,   37   Miss.  617;  Vassrr  v. 

^  See  §  52.  Henderson,   40    Miss.   519;    Scott    v. 

^  See  §  131.  W^allace,  4  J.  J.  Marsh  (Ky.)  654 ;  Ro- 

•*  Morgan    v.    Bogue,    7    Neb.    429;  per   v.   McCook,  7   Ala.   318;    Baxter 

Castle  V.  Bader,  23  Cal.  76 ;  Newman  v.  Moses,  T]  Me.  465  ;    Weigtman  v. 

V.  Willetts,  52   111.  98;  Brown  v.  Bank  Hatch,  17  III.  286;  Bigelow  v.  .Andress, 

of  Mississippi,  31  Miss.  454;  McElwain  31    111.    334;    Beach  v.    Bcslor.  45    111. 

V.  Willis,  9  Wtnd.  (N.  Y.)  548 ;  Hogan  346. 


138  RETURN    OF    EXECUTION    UNSATISFIED.  §  86 

be  shown  that  the  property  is  not  suseeptible  to  levy} 
And  it  is  immaterial  that  the  return  of  the  execution  was 
made  at  the  request  of  the  plaintiff  and  within  sixty  days 
after  its  issuance.^  An  embarrassing  conflict  of  decisions, 
which  must  be  noticed,  arose  between  the  Court  of  Appeals 
of  New  York,  in  Thurber  v.  Blanck,^  and  the  Commission 
of  Appeals  of  the  same  State,  in  Mechanics'  Bank  v. 
Dakin.'*  The  Commission  held  that  when  a  suit  had  been 
commenced  by  attachment,  and  a  judgment  recovered,  the 
plaintiff,  after  issuance  of  execution,  and  before  its  return, 
could  maintain  an  equitable  action  to  set  aside  a  fraudulent 
assignment  of  a  bond  and  mortgage,  to  the  end  that  it 
might  be  applied  toward  the  satisfaction  of  the  judgment  ; 
the  theory  being,  that  by  the  service  of  the  attachment  a 
lien  was  acquired  upon  the  bond  and  mortgage,  w^hich 
could  be  enforced  after  judgment,  and  to  which  the  fraud- 
ulent assignment  was  no  impediment.^  The  Court  of  Ap- 
peals held,  however,  that  an  equitable  action  could  not  be 
brought  in  such  a  case  until  the  remedy  at  law  was  first 
exhausted  ;  that  is,  until  the  execution  on  the  judgment 
had  been  returned  unsatisfied  ;  that  no  lien  could  be  ac- 
quired by  the  attachment  upon  a  bond  and  mortgage,  the 
legal  title  to  which  was  in  a  third  person  ;  that  in  the  case 
of  choses  in  action  and  debts,  the  lien  is  constructive,  and 
cannot  operate  through  an  intermediate  or  inchoate  legal 
title  ;  that  in  such  a  case  no  debt  at  law  is  owing  to  the 
defendant,  and  there  is  nothing  for  the  attachment  to 
operate  upon,  since  it  can  only  act  upon  legal  rights,  and 
not  upon  mere  equitable  interests  ;  that  debts  and  choses  in 
action  are  legal  assets  under  the  attachment  law  only  when 
the  process  acts  directly  upon  the  legal  title,  and  that  when 
they  are  so  situated  as  to  require  the  exercise  of  the  equit- 


'  Snodgrass  V.  Andrews, 30  Miss472.  54  N.  Y.  681.    Compare  McElwain  v. 

-  Forbes  v.  Waller,  25  N.  Y.  430.  Willis,  9  Wend.  (N.  Y.)  561  ;  reviewed 

*  50  N.  Y.  80.  in  Smith  v.  Weeks,  60  Wis.  too. 
•*  51  N.  Y.  519  ;  re-argument  denied,        '  See  §81. 


§  8/  REALTY    AND    PERSONALTY.  1 39 

able  powers  of  the  court  to  place  them  in  that  condition 
they  are  to  be  regarded  as  equitable  assets  only,  and  that, 
in  such  a  case,  to  allow  the  equitable  action  upon  the  issu- 
ance of  an  execution,  and  before  its  return,  would  l)c  in 
direct  conflict  with  the  rule  that  a  creditor  has  no  standing 
in  court  to  reach  equitable  assets  until  his  remedy  at  law  is 
exhausted.  The  decision  of  the  Commission  of  Appeals, 
it  may  be  observed,  was  unanimous,  while  that  of  the 
Court  of  Appeals  was  rendered  by  a  majority  of  the  court, 
three  judges  dissenting,  and  three  concurring  with  the 
chief-justice.  The  Commission  of  Appeals  was  a  tempo- 
rary court  called  into  existence  to  relieve  the  overcrowded 
calendar  of  the  Court  of  Appeals.  Its  duration  as  a  court 
was  limited  and  it  has  ceased  to  exist.  The  Court  of  .-\p- 
peals  being  the  permanent  appellate  court  its  decision  has 
been  generally  followed,^  though  it  must  be  conceded  that 
the  relief  which  the  Commission  of  Appeals  attempted  to 
extend  would,  in  many  instances,  prove  highly  serviceable 
to  creditors.  The  decision  of  the  New  York  Court  of 
Appeals,  in  Thurber  v.  Blanck,^  is  not  to  be  taken  as  being 
in  conflict  with  the  class  of  cases  in  which  it  has  been  liekl 
that  an  equitable  action  may  be  brought  after  the  issuance 
of  an  execution,  and  before  its  return  unsatisfied,  to  set 
aside  a  fraudulent  transfer  of  goods  and  chattels,  or  of  real 
estate  which  can  be  levied  upon  under  the  execution  when 
the  fraudulent  impediment  is  removed.^ 

§  87.   Distinction  between  realty  and  personalty  as  to  issu- 
ance of  execution.— The  predicate  of  the  jurisdiction  as  affect- 


'  Gross  V.  Daly,  5  Daly  (N.  Y.)  543;  561  ;  Heye  v.   Bolles,  2   Daly  (N.  Y.) 

Castle  V.   Lewis,  78  N.  Y.  137.     See  231  ;  McCul!ouL,fh   v.   Colby,    5    Bosw. 

Smith  V.  Longmire,  i  Am.  Insolv.  R.  (N.  Y.)  477  ;  Nonh  AmiMJcaii  Fire  Ins. 

426;  Anthony  v.  Wood,  96   N.  Y.  1S5,  Co.  v.  Graham,  5  .Sanclf.  (N.  Y.)  200; 

citing  this  section.  Falconer  v.  Freeman,  4  Sandf.  Ch.  (N. 

*  50  N.  Y.  80.  Y.)    565;    Greenleaf  v.    Mumford.    30 

'^  Gross  V.  Daly,  5  Daly  (N.  Y.)  542 ;  How.  Pr.  (N.  Y.)  30. 

McElwain  v.  Willis,  9  Wend.  (N.  Y.) 


140  REALTY  AND  PERSONALTY.  §  87 

ing  realty  is  that  the  creditor  has  a  Hen,^  and  of  course  if  the 
lien  has  expired  the  creditor's  action  will  fail.^  A.  judg- 
ment is  usually  a  lien  upon  real  property  by  statute,  and 
hence  authority  can  be  found  for  the  proposition  that  a 
covinous  conveyance  of  real  property  can  be  attacked  by  a 
judgment-creditor  without  the  issuance,  levy,  or  return  of 
an  execution.^  Jurisdiction  is  invoked  in  such  cases  in  aid 
of  the  remedy  at  law.  It  may  be  observed  that,  as  a  cred- 
itor must  usually  exhaust  the  personal  property  of  the 
judgment-debtor  before  having  recourse  to  the  realty,  it  is 
generally  essential  to  show,  in  proceedings  to  reach  the 
latter,  that  an  execution  has  been  issued.^  There  is,  how- 
ever, an  absence  of  harmony  in  the  authorities.  The  ques- 
tion recently  came  before  the  New  York  Court  of  Ap- 
peals,^ and  the  result  of  the  decision  is  briefly  to  the  effect 
that,  in  an  action  to  set  aside  a  fraudulent  conveyance  of 
realty,  the  complaint  must  allege  the  issuance  of  an  execu- 
tion and  its  return  unsatisfied,  or  the  action  must  be  brought 
in  aid  of  an  execution  then  outstanding.  The  authorities 
in  that  State,  on  the  general  proposition  that  all  available 
legal  remedies  must  be  pursued  before  resort  to  equity,^ 
are  reviewed,  and   Shaw  v.   Dwight"^  distinguished.     This 

1  Partee  v.  Mathews,  53  Miss.  146  ;  82  ;  Multnomah  Street  Ry.  Co.  v.  Har- 

PulHam  V.  Taylor,  50  Miss.  551-554;  ris,  13  Ore.  198;  Payne  v.  Sheldon,  63 

Carlisle  v.  Tinclall,  49  Miss.  229-232.  Barb.  (N.  Y.)  169 ;  Weigtman  v.  Hatch, 

*  Evans    v.    Hill,    18    Hun    (N.   Y.)  17  111.  281  ;  Dargan  v.  Waring,  11  Ala. 

464.  993.     See  Busvvell  v.  Lincks,  8  Daly 

3  Cornell  v.  Radvvay,  22  Wis.  260;  (N.  Y.)  518. 

Mohawk  Bank  v.  Atwater,  2  Paige  (N.  •*  North  Am.  Fire  Ins.  Co.  v.  Graham, 

Y.)  58;  Clarkson  v.  De  Peyster,  3  Paige  5  Sandf.  (N.  Y.)  197  ;  reviewed  in  Mc- 

(N.  Y.)  320  ;  Shaw  v.  Dwight,  27  N.  Cullough  v.  Colby,  5  Bosw.  (N.  Y.)  477. 

Y.  249  {contra,  Adsit  v.  Butler,  87  N.  *  Adsit  v.  Butler,  87  N.  Y.  586. 

Y.  587);  Brinkerhoff V.Brown, 4 Johns,  «  Ocean  Nat.  Bank  v.  Olcott,  46  N. 

Ch.  (N.  Y.)  671  ;  Royer  Wheel  Co.  v.  Y.  12  ;  Geery  v.  Geery,  63  N.  Y.  252  ; 

Fielding,  61    How.    Pr.   (N.  Y.)  437  ;  Estes  v.  Wilcox,  67  N.  Y.  264  ;  Allyn 

McCalmont    v.    Lawrence,    i    Blatch.  v.  Thurston,  53  N.  Y.  622  ;  McCartney 

232  ;  Newman  v.  Willetts,  52  111.  98  ;  v.  Bostwick,  32  N.  Y.  62  ;  Fox  v.  Moy- 

Vasser  v.   Henderson,  40  Miss.   519;  er,  54  N.  Y.  125;  Crippen  v.  Hudson, 

Baldwin  v.  Ryan,  3  T.  &  C.  (N.  Y.)  13  N.  Y.  161. 

253  ;   Binnie  v.  Walker,  25  111.   App.  '  27  N.  Y.  244. 


§  8/  REALTY  AND  PERSONALTY.  I4I 

decision  being  the  most  recent  utterance  of  the  court  of 
last  resort,  it  follows  that  in  New  York  State  at  least,  exe- 
cution must  issue  upon  a  judgment  before  a  creditor's  ac- 
tion, or  a  suit  to  annul  a  fraudulent  conveyance  of  realty 
can  be  supported.  This  places  real  property  and  equitable 
interests  on  substantially  the  same  basis,  as  regards  the 
status  of  .an  attacking  creditor,  and  in  some  measure  re- 
stricts his  rights.-^ 

To  obtain  an  equitable  lien  upon  property  not  the  sub- 
ject of  levy  and  sale  under  execution,  the  creditor  must,  of 
course,  have  exhausted  his  remedy  under  his  judgment  or 
decree  by  the  return  of  an  execution  unsatisfied.'^  The  re- 
turn of  the  execution,  even  as  to  personalty  capable  of 
being  subjected  to  a  lien,  is  not  always  essential.  In  Bus- 
well  V.  Lincks,^  Chief-Justice  Daly  said  :  "  The  equitable 
aid  of  the  court  to  set  aside  a  fraudulent  conveyance  is 
given  where  the  one  invoking  it  has  a  lien  upon  the  proj)- 
erty  which  is  obstructed  by  the  conveyance.  In  the  case 
of  personal  property,  a  judgment-creditor  acquires,  by  the 


'  See  Verner  v.  Downs,  13  S.  C.  449;  veyance  of  real  property  on  which  the 
Hyde  v.  Chapman,  33  Wis.  399  ;  Dana  plaintiff's  judgment  is,  as  against  his 
V.  Haskell,  41  Me.  25.  In  the  Halladay  debtor,  a  lien  without  an  execution. 
Case,  27  Fed.  Rep.  845,  the  court  say  :  In  the  latter  case  the  right  to  maintain 
"The  issue  of  an  execution,  and  the  re-  the  suit  is  based  on  the  unsatisfied 
turn  of  «//■//«  ^^wa  thereon,  is  considered  judgment,  the  fraudulent  conveyance, 
sufficient  evidence  of  the  insolvency  of  and  the  insolvency  of  the  debtor;  which 
the  judgment-debtor,  and  that  the  judg-  latter  fact  may  be  proved  by  any  com- 
ment-creditor is  remediless  at  law.  petent  evidence,  as  well  as  a  return  of 
But  it  is  not  the  only  evidence  of  that  fiulla  bona  on  an  execution."  As  to 
fact,  nor,  in  my  judgment,  always  the  proof  of  insolvency,  see  Hodges  v.  Silver 
best.  The  authorities  are  in  apparent  Hill  Mining  Co.,  9  Ore.  200  ;  Terry  v. 
conflict  on  this  question.  Wait  Fraud.  Tubman,  92  U.  S.  156  ;  Case  v.  Ikau- 
Conv.  §68;  Bump  Fraud.  Conv.  518,  regard,  loi  U.  S.  688  ;  McCalmont  v. 
527.  But  where  the  diversity  is  not  Lawrence,  i  Blatchf.  232. 
the  result  of  local  legislation,  I  think  '•  Clarkson  v.  De  IVyster,  3  Paige 
the  apparent  conflict  arises  from  con-  (N.  Y.)  320;  Shaw  v.  Dwight,  27  N. 
founding  creditors'  bills  to  subject  per-  Y.  249 ;  Brinkerhoff  v.  Brown,  4  Johns, 
sonal  property  to  the  satisfaction  of  a  Ch.  (N.  Y.)  676  ;  Adsit  v.  Butler,  87 
judgment  with  an  ordinary  bill  in  N.  Y.  587  ;  Fox  v.  Moycr,  54  N.  Y.  128. 
equity  to  set  aside  or  postpone  a  con-  ^  8  Daly  (N.  Y.)  518. 


142 


RAISING    THE    OBJECTION.  § 


issuing  of  an  execution,  a  lien  upon  the  personal  property 
of  the  debtor  as  against  a  fraudulent  conveyance,  and  the 
aid  of  the  court  is  given  in  that  case  to  remove  the  obstruc- 
tion in  the  way  of  the  execution,  which  cannot  be  done  if 
the  execution  has  been  returned,  for  the  lien  under  it  is 
then  at  an  end."  ^ 

§  88.  Raising  the  objection. — The  objection  that  the  cred- 
itor's remedy  is  at  law,  or  that  his  bill  is  without  equity,  or 
his  lien  is  suspended,  may  be  raised  at  the  hearing,^  though 
it  is,  of  course,  safer  to  bring  it  up  by  demurrer,  if  apparent 
on  the  face  of  the  pleading,  or  by  answer,  if  the  defect  is 
not  so  shown.     The  court  may  itself  raise  the  objection.^ 

In  concluding  this  chapter  we  may  state  that,  as  a  general 
rule,  under  both  the  old  Chancery  system  and  the  reformed 
procedure  in  New^  York,  the  bill  should  generally  show 
affirmatively  that  an  honest  attempt  has  been  made  to  col- 
lect the  debt  by  the  issuing  of  an  execution  against  the 
debtor  and  its  return  unsatisfied,  and,  where  there  are  sev- 
eral defendants  jointly  liable,  that  such  effort  has  been  made 
and  the  remedy  exhausted  against  all  the  judgment-debtors 
before  jurisdiction  will  be  entertained  in  chancery.*  Where 
the  sole  purpose  of  the  bill  is  to  subject  real  property  fraud- 
ulently aliened  to  the  lien  of  a  judgment  the  exaction  that 
execution  should  have  been  returned  is  not  uniformly  en- 
forced. 


'  Citing   Forbes  v.  Logan,  4  Bosw.  ^  Oelrichs  v.  Spain,  15  Wall.  211. 

(N.  Y.)  475  ;  Watrous  v.  Lathrop,  4  •*  Voorhees  v.  Howard,  4  Keyes  (N. 

Sandf.  (N.  Y.)  700.  Y.)  383.     See  Child  v.  Brace,  4  Paige 

2  Meux   V.   Anthony,    11   Ark.   423;  (N.Y.)309;  Reed  v.  Wheaton,  7  Paige 

Tappan  v.  Evans,  1 1  N.  H.  31 1  ;  Brown  (N.  Y.)  663. 
V.  Bank  of  Mississippi,  31  Miss.  454. 


CHAPTER    V. 


EXISTING    CREDITORS. 


I  89.  Classes  of  creditors — existing  and 
subsequent. 

90.  Contingent  creditors. 

91.  Who  are  not  creditors. 

92.  Transfer  of  right  to  sue. 


§  93.  Voluntary  alienations  as  to  exist- 
ing creditors. 

94.  Such  conveyances  only  presump- 

tively fraudulent. 

95.  Evidence  of  solvency. 


"  The  complainant,  not  showing  that  he  was  at  the  time  a  creditor,  cannot  complain.  Even 
a  voluntary  conveyance  is  good  as  against  subsequent  creditors,  unless  executed  as  a  cover  for 
future  schemes  of  fraud."— Mr.  Justice  Field  in  Horbach  v.  Hill,  112  U.  S.  149. 

§  89.  Classes  of  creditors — existing  and  subsequent. — As 
appertaining  to  the  subject-matter  of  this  treatise,  credit- 
ors may  be  said  to  resolve  themselves  into  two  great  classes 
or  subdivisions,  commonly  named  existing  creditors  and 
subsequent  creditors.  Existing  creditors  are  those  whose 
claims  or  demands  against  the  debtor  were  in  l)eing  in  some 
form  at  the  date  of  the  alleged  voluntary  or  fraudulent 
alienation.^  Subsequent  creditors  are  those  to  whom  the 
insolvent  became  indebted  at  a  time  subsequent  to  the 
alienation  which  is  the  subject  of  inquiry.  The  rights  of 
these  two  classes  of  creditors  are  manifestly  and  necessarily 
different  ;^  the  proofs  in  each  case  vary,  and  the  measure 
of  relief  extended  by  the  courts  in  particular  instances  is 
largely  dependent  upon  the  question  as  to  which  of  these 
two  classes  or  subdivisions  the  complaining  creditor  be- 
longs. "  The  difference,"  says  Chancellor  Williamson, 
"  between  existing  and  subsequent  debts,  in  reference  to 
voluntary  conveyances,  is  this — as  to  the  foniur  the  fraud 


'See   Horbach   v.    Hill,    112  U.   S.         ''See  Gordon  v.  Reynolds.   114  III. 
149.  123;  Jones  V.  King,  86  III.  225. 


144  CONTINGENT    CREDITORS.  §  90 

is  an  inference  of  law,  but  as  to  the  latter  there  must  be 
fraud  in  fact."  ^  This  latter  distinction  as  we  shall  pres- 
ently see  is  not  universally  applied.  Manifestly  if  the 
debtor  has  made  any  secret  reservation  for  his  own  benefit 
the  alienation  may  be  overturned  by  either  class  of  cred- 
itors."^ 

§  90.  Contingent  creditors. — It  has  been  repeatedly  ad- 
judged that  a  party  bound  by  a  contract  upon  which  he 
may  become  liable  for  the  payment  of  money,  although  his 
liability  be  contingent,  is  a  debtor  within  the  meaning  of 
the  statute  avoiding  all  grants  made  to  hinder  or  delay 
creditors.'^  It  follows  that  the  person  to  whom  he  is  bound 
is  a  creditor.^  A  wife  is  a  creditor  under  13  Eliz.  c.  5,  in 
a  case  where  her  husband  covenanted  with  trustees  to  pay 
her  a  sum  of  money  after  his  death. ^  A  surety  is  a  cred- 
itor from  the  time  the  obligation  is  entered  into  ;  ^  a  person 
liable  contingently  as  an  accommodation  indorser  is  a  cred- 
itor before  the  dishonor  of  the  note  ;  ^  and  a  warrantor,  if 
at  the  date  of  the  deed  a  paramount  title  was  outstanding, 
is,  from  the  time  of  the  conveyance,  a  debtor  to  the  war- 
rantee.® A  municipal  corporation  is,  upon  the  issuance  to 
the  proper  officer  of  a  tax  warrant,  a  creditor  within  the 
statute.^  The  date  when  the  agreement  or  obligation  came 
into  existence  governs  ^"^  in  determining  the  complaining  or 

'  Cook  V.  Johnson,  12  N.  J.  Eq.  54.  *  Pennington  v.  Seal,  49  Miss.  525. 

■■'  See  Gordon  v.  Reynolds,   114   111.  '  Hamet  v.  Dundass,  4  Pa.  St,  178. 

123.  '  Gannard  v.  Eslava,  20  Ala,   740; 

^  Young  V.  Heermans,  66  N.  Y.  384;  Pennington  v.  Seal,  49  Miss.  525. 

Fearn  v.  Ward,  65  Ala.  33  ;  Van  Wyck  ^  Stimson  v.  Wrigley,  86  N.  Y.  332. 

V.  Seward,  18  Wend.  (N.  Y.)  375,  383,  A  judgment  for  costs  accrues  at  the 

and  cases  cited  ;  Shontz  v.  Brown,  27  time  the  judgment  is  rendered,  and  not 

Pa.  St.  123  ;  Bibb  v.  Freeman,  59  Ala.  when  the  action  is  commenced,  as  re- 

612;    Cook  V.  Johnson,   12  N.  J.  Eq,  gards    the    question    of   whether   the 

52;  Hamet  v.  Dundass,  4  Pa.  St.  178;  claimant  is  an  existing  or  subsequent 

Jenkins  v.  Lockard,  66  Ala,  381.  creditor.     Inhabitants    of    Pelham    v. 

■*  See  Jackson  v.  Seward,  5  Cow,  (N.  Aldrich,  8  Gray  (Mass.)  515  ;  Ogden 

Y.)  67;  Jackson  v.  Myers,   18  Johns,  v.    Prentice,  33   Barb.    (N.    Y.)    160; 

(N.  Y.)  425.  Stevens  v.  Works,  81  Ind.  449. 

"■  Rider  v.  Kidder,  10  Ves.  360.  '"  Van  Wyck  v,  Seward,  18  Wend, 


§  91  WHO    ARE    NOT    CREDITORS.  1 45 

attacking  creditor's  rights.  As  elscwiiere  shown,  a  person 
whose  claim  arises  from  a  tort,^  such  as  libel  or  slander,'^  is 
a  creditor.  The  date  the  tort  or  injury  was  committed 
governs  in  determining  the  creditor's  status,  where  the  con- 
veyance was  made  in  pursuance  of  a  fraudulent  design  to 
defeat  the  judgment  which  might  be  recovered  upon  it.'' 
So  a  transfer  to  defeat  a  claim  for  deceit,*  for  usury  penal- 
ties,^ breach  of  promise  to  marry,^  seduction,"  bastardy,*^  and 
assault  and  battery,^  may  be  annulled.  And  a  wife  may  at- 
tack alienations  intended  to  defeat  claims  for  alimony.^"  In 
Pendleton  v.  Hughes,^^  the  defendants,  at  the  date  of  the 
fraudulent  alienation,  had  in  their  possession  a  5-20  U.  S. 
bond  belonging  to  plaintiff  which  they  afterward  con- 
verted. The  court  held  that  plaintiff  was  equitably  en- 
titled to  protection  against  the  fraudulent  transfer  to  the 
same  extent  as  thouirh  the  defendants  had  been  indebted  to 
her  in  that  amount  at  the  time  of  the  fraudulent  alienation. 
§  91.  Who  are  not  creditors. — In  Baker  v.  Gilman,^*  the 
court  speaking  by  Johnson,  J.,  said  that  the  sole  object  of 

(N.  Y.)    375  ;    Seward   v.   Jackson,  8  •»  Miner  v.   Warner,   2  Grant  (Pa.) 

Covven  (N.  Y.)  406.     See  Wooldridge  448. 

V.  Gage,  68  111.  158 ;  Stone  v.  Myers,  9  '  Heath  v.  Page,  63  Pa.  St.  108. 

Minn.  309.  "Hoffman    v.   Junk,    51    Wis.   613; 

'  Post  V.  Stiger,  29  N.  J.  Eq.  558  ;  McVeigh  v.  Ritenour,  40  Ohio  St.  107. 

Scott  V.   Hartman,   26  N.  J.  Eq.  90 ;  '  Hunsinger  v.  Hofer,  1 10  Ind.  390. 

Pendleton  v.  Hughes,  65  Barb,  (N,  Y.)  "  Schuster  v.  Stout,  30  Kans.  530. 

136  ;  Barling  v.  Bishopp,  29  Beav.  417  ;  "  Martin  v.  Walker,  12  Hun  (N.  Y.) 

Shean  v.  Shay,  42  Ind.  375  ;  Bongard  46. 

V.  Block,  81  111.  186;  Weir  v.  Day,  '"Morrison  v.  Morrison,  49  N.  H. 
57  Iowa  87;  Jackson  v.  Myers,  18  69;  Bouslough  v.  Bouslough,  68  Pa. 
Johns.  (N.  Y.)  425  ;  Shontz  v.  Brown,  St.  495  ;  Turner  v.  Turner.  44  Ala. 
27  Pa.  St.  131;  Harris  v.  Harris,  23  437;  Dugan  v,  Trislcr,  69  Ind.  553; 
Gratt.  (Va.)  737  ;  Tobie  &  Clark  Mfg.  Bailey  v.  Bailey,  61  Me.  361  ;  Liver- 
Co.  V.  Waldron,  75  Me.  472.  See  more  v.  Boutelle,  1 1  Gray  (Mass.)  217  ; 
§  123.  Chase  v.  Chase,  105  Mass.  385  ;  Hinds 

""  Cooke  V.  Cooke,  43  Md.  522;    Hall  v.  Hinds,  80  Ala.  225,  227,  citing  this 

V.  Sands,  52  Me.  355.     But  see  Fowler  section  ;  Foster  v.  Foster,  56  Vt.  546; 

V.  Frisbie,  3  Conn.  320.  Stuart  v.  Stuart,  123  Mass.  370;    Bur- 

^  Miller  v.    Dayton,   47    Iowa   312;  rows  v.  Purple,  107  Mass.  435. 

Evans  v.  Lewis,  30  Ohio  St.  11  ;   Ford  "  65  Barb.  (N.  Y.)  136. 

V.  Johnston,  7  Hun  (N.  Y.)  563.  "  52  Barb.  (N.  Y.)  37. 
10 


146  TRANSFER    OF    RIGHT    TO    SUE.  §§  92,   93 

the  Statute  "  in  declaring  conveyances  void,  is  to  protect, 
and  prevent  the  defeat  of,  lawful  debts,  claims,  or  demands, 
and  not  those  which  are  unlawful,  or  trumped  up,  and  which 
have  no  foundation  in  law  or  justice,  and  the  verity  of  which 
is  never  established  by  any  judgment,  or  by  the  assent  of 
the  person  against  whom  they  are  made.  As  against  claims 
and  demands  of  the  latter  class,  the  statute  does  not  forbid 
conveyances  or  assignments,  nor  declare  them  void."  So  a 
party  who  is  not  a  bona  fide  creditor  is  not  entitled  to  equit- 
able relief  on  a  creditor's  bill.^  A  pretended  creditor  w^hose 
claim  is  illegal,^  or  void  as  against  public  policy,^  or  barred 
by  statute  at  law,^  or  who  is  not  concerned  in  the  transfer,^ 
cannot  support  a  creditor's  action.  A  court  of  equity  can 
only  lend  its  aid  to  enforce  a  judgment  which  could  be  en- 
forced at  law. 

§  92.  Transfer  of  right  to  sue. — It  may  be  here  observed 
that  the  right  to  avoid  a  fraudulent  conveyance  is  not  per- 
sonal to  the  then  existing  creditor ;  his  successors  and  as- 
signs may  enforce  the  right.  Thus  the  subsequent  pur- 
chaser of  a  pre-existing  note  may  attack  a  transfer.^  Camp- 
bell, J.,  says  '.'^  "  No  change  in  the  ownership  or  the  form 
of  the  debt  affects  the  right  incident  to  the  debt  to  attack 
a  conveyance  fraudulent  as  to  it."  Davis,  J.,  observed  : 
"  The  conveyance  was  void  as  against  the  person  intended 
to  be  defrauded,  and  his  heirs,  successors,  executors,  ad- 
ministrators, and  assigns,  if  their  actions,  suits,  debts,  etc., 
were  liable  to  be  delayed  or  hindered  thereby."^ 

§  93.  Voluntary  alienations  as  to  existing  creditors. — At 
first  blush  it  would  seem  apparent  that  every  voluntary 
alienation  of  a  debtor's  estate,  aside  from  the  question  of 


1  Townsend  v.  Tuttle,  28  N.  J.  Eq.        ^  Morrison  v.  Atwell,  9  Bosw.  (N.  Y.) 

449.     See  §  73.  503  ;  Powers  v.  Graydon,  10  Bosw.  (N. 

«  Fuller  V.  Bean,  30  N.  H.  186.     See  Y.)  630. 
Walker  v.  Lovell,  28  N.  H.  138.  *  Warren  v.  Williams,  52  Me.  349. 

'  Bruggerman  v.  Hoerr,  7  Minn.  337.        '  Cook  v.  Ligon,  54  Miss.  655. 

*  Edwards  v.  M'Gee,  31  Miss.  143.  "  Warren  v.  Williams,  52  Me.  349. 


§  93  VOLUNTARY    ALIENATIONS,  14/ 

intent,  ought  to  be  avoided  as  to  existing  creditors.  The 
debtor's  property  is  the  fund  upon  which  the  creditor  re- 
lied in  extending  the  credit,  and  that,  after  the  claim  ac- 
crued, this  fund  should  be  depleted  and  pass  into  the  hands 
of  persons  who  did  not  pay  value  for  it,  is  a  palpable  in- 
justice to  the  creditor  whose  claim  remains  unpaid.  Ex- 
actly how  to  accomplish  substantial  justice  in  such  cases, 
and  yet  to  give  full  scope  and  effect  to  the  proi)er  pre- 
sumptions and  rules  of  law,  is  not  easily  determined.  Shall 
such  a  conveyance  be  declared  pruna  facie  or  absolutely 
void  ? 

Some  of  the  confusion  and  uncertainty  which  has  been 
introduced  into  this  subject  in  this  country  may  be  traced 
to  the  celebrated  decision  of  Chancellor  Kent  in  the  widely 
known  case  of  Reade  v.  Livingston,^  \\\  which  it  was  held 
that  a  voluntary  marriage  settlement  after  marriage,  was  of 
itself  void  as  to  existing  creditors.  This  case  has  been  de- 
clared by  an  essayist^  to  be  "the  grandest  monument  of 
legal  acumen  and  wide  and  varied  erudition  which  New 
York  has  ever  produced,"  and  while  it  is  conceded  that  the 
case  was  repudiated  by  the  courts  of  the  very  Stale  which 
gave  it  birth,^  it  was  asserted  that  "unless  indications  are 
wholly  delusive  the  learned  Chancellor  was  not  more  than 
a  century  in  advance  of  his  age.'"*  The  English  Court  of 
Chancery  in  Freeman  v.  Pope,^  substantially  acknowledge 

>  3  Johns  Ch.   (N.  Y.)  481  ;  S.  C.  8         *  See  Doe  d.  Davis  v.  McKinncy.  5 

Am.  Dec.  520.  Ala.  719;  Foote  v.  Cobb,  18  Ala.  585  ; 

•  Fraudulent   Conveyances  to  Bofta  Gannard  v.  Eslava.  20  Ala.  732  ;  Spcn- 

Ft'de  Purchasers,  etc..  by  John  Rcy-  cer  v.  Godwin,  30  Ala.  355  ;  Crawford  v. 

nolds,  Esq.,  cited  stifira.  Kirksey,  55  Ala.  282  ;  Early  v.  Owens. 

=  Seward  v.  Jackson,  8  Cow.  (N.  Y.)  68  Ala.  171 ;  Cook  v.  Johnson.  12  N. 

406.     By  statute  in  New  York,  as  else-  J.  Eq.  51  ;  Smith  v.  Vreeland,  16  N.  J. 

where  shown,  the  question  of  fraud  is  Eq.  198;  Kuhl  v.  Martin,  26  N.  J.  Eq. 

made  one  of  fact,  and  no  conveyance  is  60;    Haston  v.  Castner,  31   N.  J.  Eq. 

considered  fraudulent  as  against  cred-  697  ;  City  National  Bank  v.  Hamilton, 

itors  or  purchasers  solely  on  the  ground  34  N.  J.  Eq.  1 58  ;  Aber  v.  Brant.  36  N. 

that  it  was  not  founded  upon  a  valu-  J.  Eq.  116;  Fellows  v.  Smith,  40  Mir" 

able  consideration.     See  Dygert  v.  Re-  689 ;  Matson  v.  Melchor.  42  Mich. 
merschnider,  32  N.  Y.  636.  '  L.  R.  9  Eq.  at  p.  211. 


148  CONVEYANCES    PRESUMPTIVELY    FRAUDULENT.  §  94 

the  doctrine  of  this  case  and  give  the  following  emphatic 
and  extreme  illustration  :  If  at  the  time  of  a  voluntary  set- 
tlement, the  settler  "had  ^100,000,  and  put  ^100  in  the 
settlement,  and  a  creditor  for  say  ^10,  happened  to  be 
unpaid  in  consequence  of  the  settler  losing  his  money  in 
the  interval,  that  would  be  quite  sufficient  to  set  aside  the 
voluntary  settlement";  and  the  doctrine  of  the  case  is  un- 
reservedly followed  in  many  American  cases.^  Salmon  v. 
Bennett,**  a  leading  early  case,  created  an  exception  to  the 
rule  set  forth  in  Reade  v.  Livingston,  and  tends  to  uphold 
voluntary  conveyances  to  relatives  as  distinguished  from 
strangers,  where  actual  fraud  is  not  found. ^ 

§  94.  Such  conveyances  only  presumptively  fraudulent. — If, 
however,  the  majority  rule  is  to  be  applied  in  determining 
this  conflict,  or  the  cases  are  to  be  counted  and  not  weighed, 
then  it  must  be  conceded  that  a  voluntary  alienation  by  a 
person  who  happens  to  be  indebted  at  the  time  is  ov^y prima 
facie  fraudulent.*  In  Smith  v.  Vodges,^  Swayne,  J.,  said  : 
"  In  order  to  defeat  a  settlement  made  by  a  husband  upon 
his  wife,  it  must  be  intended  to  defraud  existing  creditors, 
or  creditors  whose  rights  are  expected  shortly  to  supervene, 


1  See  Crawford  v.  Kirksey,  55  Ala.  Hill's  Ch.  (S.  C.)   113;  s.  C.  26  Am. 

282;  Spencer  v.  Godwin,  30  Ala.  355;  Dec.   192;  Heiatt  v.  Barnes,  5  Dana 

Hanson  v.  Buckner,  4  Dana  (Ky.^  251  ;  (Ky.)  220;  Koster  v.  Hiller,  4  Bradw. 

Emerson  v.  Bemis,  69  111.  540 ;  Annin  (III.)  24 ;  Fellows  v.  Smith,  40  Mich. 

V.  Annin,  24  N.  J.  Eq.  184;   Richard-  691;    Grant   v.   Ward,   64  Me.    239; 

son  V.  Rhodus,  14  Rich.  Law  (S.  C.)96.  French  v.  Holmes,  67  Me.  190;  War- 

*  I  Conn.  525.  ner  v.  Dove,  33  Md.  579 ;  Babcock  v. 

^  See  §  242.      Foster  v.   Foster,    56  Eckler,  24  N.  Y.  623  ;  Greenfield's  Es- 

Vt.   548;    Lloyd  V.  Fulton,  91    U.  S.  tate,  14  Pa.  St.  489 ;  Clark  v.  Depew, 

479;  Babcock  v.  Eckler,  24  N.  Y.  623  ;  25   Pa.  St.  509;  Pomeroy  v.  Bailey,  43 

Gale  V.  Williamson,  8  M.  &  W.  405.  N.   H.    118;  Dewey  v.   Long,   25   Vt. 

•*  See  note  to  Jenkins  v.  Clement,  14  564;  Lloyd  v.  Fulton,  91  U.  S.  485  ; 

Am.  Dec.  705  ;  Pence  v.  Croan,  51  Ind.  Hoxie  v.  Price,  31  Wis.  82.     The  vol- 

336;  Gwyer  v.  Figgins,  37  Iowa  517  ;  untary  donee  "is  entitled  only  to  that 

Wilson   V.    Kohlheim,   46   Miss.  346 ;  which  his  donor  could  honestly  give." 

Bank  of  U.  S.  v.  Housman,  6  Paige  Adams'  Equity,  p.  149.     See  Green  v. 

(N.  Y.)  526  ;  Holden  v.  Bumham,  63  Givan,  33  N.  Y.  343. 

N.  Y.   74;    Eigleberger  v.   Kibler,   i  ^  92  U.  S.  183. 


§  95  EVIDENCE  OF  SOLVENXV.  1 49 

or  creditors  whose  rights  may  and  do  so  supervene  ;  the 
settler  purposing  to  throw  the  hazards  of  business  in  which 
he  is  about  to  engage  upon  others,  instead  of  honestly  hold- 
ing his  means  subject  to  the  chance  of  those  adverse  re- 
sults to  which  all  business  enterprises  are  liable."'  "The 
sentiment  of  these  cases,"  says  Mr.  Freeman,^  "  is  well  ex- 
pressed in  Lerow  v.  Wilmarth,^  by  Chief-Justice  Bigclow  : 
'  We  do  not  wish  to  be  understood  as  giving  our  sanction 
to  the  doctrine  that  a  voluntary  conveyance  by  a  father  for 
the  benefit  of  his  child  is /^^r  j^  fraudulent  as  to  existing 
creditors,  although  shown  not  to  have  been  fraudulent  in 
fact,  and  is  liable  to  be  set  aside,  because  the  law  conclu- 
sively presumes  it  to  have  been  fraudulent,' and  shuts  out 
all  evidence  to  repel  such  presumption.  The  better  doc- 
trine seems  to  us  to  be  that  there  is,  as  applicable  to  volun- 
tary conveyances  made  on  a  meritorious  consideration,  as 
of  blood  and  affection,  no  absolute  presumption  of  fraud 
which  entirely  disregards  the  intent  and  purpose  of  the 
conveyance,  if  the  grantor  happened  to  be  indebted  at  the 
time  it  was  made,  but  that  such  a  conveyance  under  such 
circumstances  affords  only  prima  facie  or  presumptive  evi- 
dence of  fraud  which  may  be  rebutted  and  controlled.'"'* 

§  95.  Evidence  of  solvency. — The  Supreme  Court  of 
Maine  regard  it  as  established  law,  that  mere  indebtedness 
is  not  sufficient  to  render  a  voluntary  conveyance  void. 
Consequently  it  was  said  that  a  man,  chough  indebted,  may 
make  a  valid  gift.°     Mere  insolvency  will  not,  of  course, 


'  Citing  Sexton  v.Wheaton,  8  Wheat,  kins,  59  N.  Y.  346;  Walter  v.  Lane,  i 

229;  Mullen  V.  Wilson,  44  Pa.  St.  413  ;  MacAr.  (D.  C.)  284;  Parish  v.  Miir- 

Stileman  v.  Ashdown,  2  Atk.  481.  phree.  13  How.  92  ;  Moritz  v.  HofTman, 

"^  See  note  to  Jenkins  v.  Clement,  14  35  III.  553  ;  Koster  v.  Hiller,  4  Bradw. 

Am.  Dec,  705.  (111.)  24. 

'  9  Allen  (Mass.)  386.  '  French    v.    Holmes,   67    Me.    193. 

*  See  Hinde  v.  Longworth,  1 1  Wheat.  See  McFadden  v.  Mitchell,  54  Cal.  628  ; 

199;  Verplank  V.  Sterry,  12  Johns.  (N.  Patterson    v,    McKinncy.    97    III,   47; 

Y.)    536.   559;    Seward  v.  Jackson,   8  Hinde  v.  Long%vorth,  11   Wheat.  213; 

Cow.   (N.  Y.)  406  ;  Dunlap  v.   Haw-  Mcrrell  v.  Johnson,  96  111,  230. 


150  EVIDENCE    OF    SOLVENCY.  §  95 

render  a  deed  fraudulent  provided  it  was  made  with  the 
sole  view  of  paying  a  debt  due  to  the  grantee.^  As  a 
general  rule  if  the  donor  is  solvent,  and  has,  after  making 
the  gift,  sufficient  assets  remaining  to  satisfy  his  creditors, 
the  gift  will  be  upheld.^  Subsequent  insolvency  will  not 
generally  render  it  invalid.^  In  such  cases  the  creditors' 
trust  fund  cannot  be  said  to  have  been  depleted  by  the 
alienation.  If  their  claims  remain  unsatisfied  it  is  due  to 
some  subsequently  accruing  cause.  Judge  Lowell,  in  Pratt 
V.  Curtis,^  derives  the  following  propositions  from  the 
cases  :  "  (i).  A  voluntary  conveyance  to  a  w'de  or  child  is 
not  fraudulent /<?r  se  /  but  it  is  a  question  of  fact  in  each 
case  whether  a  fraud  was  intended.  (2).  Such  a  deed, 
made  by  one  who  is  considerably  indebted,  is  prima  facie 
fraudulent,  and  the  burden  is  on  him  to  explain  it.  (3). 
This  he  may  do  by  showing  that  his  intentions  were  inno- 
cent, and  that  he  had  abundant  means,  besides  the  property 
conveyed,  to  pay  all  his  debts."  ^  The  rule  may  be  summed 
up  to  the  effect  that  the  gift,  conveyance,  or  settlement  will 
be  upheld  "if  it  be  reasonable,  not  disproportionate  to  the 
husband's  means,  taking  into  view  his  debts  and  situation, 
and  clear  of  any  intent,  actual  or  constructive,  to  defraud 
creditors."^  Dunlap  v.  Hawkins'''  embodies  an  important 
statement  of  the  law  upon  this  subject.  The  principle  is 
asserted  that  a  creditor  cannot  impeach  a  conveyance 
founded  on  natural  love  and  affection,  free  from  the  impu- 
tation of  fraud,  when  the  grantor  had,  independent  of  the 


1  Fuller  V.    Brewster,   53   Md.    362.  Hamilton,    56    Ind.   34;    Sherman    v. 

See  Copis  v.  Middleton,  2  Madd.  410  ;  Hogland,  54  Ind.  578  ;  Pence  v.  Croan, 

Phettiplace  v.  Sayles,  4   Mason  312  ;  51  Ind.  336. 

Hardey  v.   Green,   12  Beav.  182;  At-  •*  2  Lowell,  90. 

wood  V.  Impson,  20  N.  J.  Eq.  150.  ^  See,  also,  note   to  Jenkins  v.  Cle- 

"^  Stewart   v.  Rogers,  25  Iowa  395  ;  ment,   14  Am.   Dec.  707  ;  Herring  v. 

Gridley  v.  Watson,  53  111.   193;  Win-  Richards,  i  McCrary  574. 

Chester  v.  Charter,  97  Mass.  140.  ''  See    Herring  v.   Richards,    i    Mc- 

3  Dunn  V.   Dunn,   82   Ind.  43.     See  Crary  574. 

Rose  V.  Colter,  76  Ind.  590;  Evans  v.  ■"  59  N.  Y.  346. 


§  95  EVIDENCE  OF  SOLVENCY.  I5I 

property  granted,  an  ample  fund  to  satisfy  his  creditors.^ 
Allen,  J.,  in  the  course  of  the  opinion,  said  :  "  By  proving 
the  pecuniary  circumstances  and  condition  of  the  grantor, 
or  him  who  pays  for  and  procures  a  grant  from  others,  his 
business  and  its  risks  and  contingencies,  his  liabilities  and 
obligations,  absolute  and  contingent,  and  his  resources  and 
means  of  meeting  and  solving  his  obligations,  and  showing 
that  he  was  neither  insolvent  nor  contemplating  insolvency, 
and  that  an  inability  to  meet  his  obligations  was  not  and 
could  not  reasonably  be  supposed  to  have  been  in  the  mind 
of  the  party,  is  the  only  way  by  which  the  presumption  of 
fraud,  arising  from  the  fact  that  the  conveyance  is  without 
a  valuable  consideration,  can  be  repelled  and  overcome, 
except  as  the  party  making  or  procuring  the  grant  may,  if 
alive,  testify  to  the  absence  of  all  intent  to  hinder,  delay,  or 
defraud  creditors."  And  in  Parish  v.  Murphree^  the  court 
observed  :  "  To  hold  that  a  settlement  of  a  small  amount, 
by  an  individual  in  independent  circumstances,  and  which, 
if  known  to  the  public,  would  not  affect  his  credit,  is  fraud- 
ulent, would  be  a  perversion  of  the  statute."  In  Carpenter 
V.  Roe,^  the  New  York  Court  of  Appeals  held  that,  to  in- 
validate a  voluntary  conveyance,  belief  by  the  debtor  as  to 
his  insolvency  was  not  absolutely  necessary  ;  it  was  suffi- 
cient if  his  solvency  was  contingent  upon  the  stability  of 
the  market  in  the  business  in  which  he  was  engaged.  In 
other  words,  a  debtor  has  not  the  right  to  make  voluntary 
alienations  so  as  to  leave  himself  in  a  condition  in  which  he 
hazards  the  rights  of  creditors  on  the  contingency  of  a  fluc- 
tuating market.  In  Cole  v.  Tyler^  the  court  say  :  "  It 
was  at  one  time  the  rule  that  a  voluntary  conveyance 
bv  one  indebted  at  the  time  was  fraudulent,  as  a  matter  of 


'  See  Jackson  v.  Post,  15  Wend.  (N.  Paige  (N.  Y.)  62  ;  Jackson   v.    Miner. 

Y.)  588 ;  Phillips  V.  Wooster,  36  N.  Y.  loi  111.  554. 
412;  Bank  of  U.   S.   v.   Housman,   6        "  13  How.  98. 
Paige  (N.  Y.)  526;  Fox  v.  Moyer,  54        '  10  N.  Y,  227. 
N.  Y.   125  ;  Van  Wyck  v.  Seward,  6        ^  65  N.  Y.  78. 


152  EVIDENCE    OF    SOLVENCY.  §  95 

law,  towards  his  creditors.  No  evidence  was  allowed  to 
rebut  the  presumption  of  fraud.^  This  rule  was  subse- 
quently deemed  to  be  too  severe  by  the  courts,  and  the  less 
stringent  rule  was  adopted  that,  while  a  conveyance  by  a 
person  indebted  was  presumptively  ox  prima  facie  fraudu- 
lent, the  presumption  might  be  rebutted  by  proof  to  the 
contrary.^  This  presumption,  however,  is  not  to  be  over- 
thrown by  mere  evidence  of  good  intent,  or  generous  im- 
pulses or  feelings.  It  must  be  overcome  by  circumstances 
showing  on  their  face  that  there  could  have  been  no  bad 
intent,  such  as  that  the  gift  was  a  reasonable  provision,  and 
that  the  debtor  still  retained  sufficient  means  to  pay  his 
debts.  He  can  no  more  delay  his  creditors  by  such  volun- 
tary conveyance  than  he  can  actually  defraud  them."^ 


'  Reade  v.  Livingston,  3  Johns.  Ch.  Babcock  v.  Eckler,  24  N.  Y.  623 ;  Dy- 

(N.  Y.)  481.     See  §93.  gert  v.  Remerschnider,  32  N.  Y.  648  ; 

"  Seward  v.  Jackson,  8  Cow.  406.  Curtis  v.  Fox,  47  N.  Y.  300. 
^  Carpenter  v.  Roe,  10  N.  Y.  230 ; 


CHAPTER  VI. 


SUBSEQUENT    CREDITORS. 


§  96.  )  Fraud    upon    subsequent   cred- 

97.  \      itors. 

98.  Proof  of  intent. 

99.  Conveyance  by  embarrassed  debt- 

or. 

icx).  Placing  property  beyond  the  risk 
of  new  ventures  or  specula- 
tions. 

loi.  Convevances  avoided. 


§  102.  Conveyances     not      considered 
fraudulent. 

103.  Subrogation  of  subsequent  cred- 

itors. 

104.  Subsequent     creditors     sharing 

with  antecedent  creditors. 

105.  Mixed  claims  accruing  prior  and 

subsequent  to  alienation. 

106.  Creditors  whose  claims  accrued 

after  notice  of  alienation. 


§  96.  Fraud  upon  subsequent  creditors. — The  great  prac- 
tical distinction  between  existing  or  antecedent  creditors 
and  subsequent  creditors  in  most  of  the  States  is,  that  a 
voluntary  alienation  is  considered,  as  to  the  former,  pre- 
sumptively fraudulent,  while  as  to  the  latter  the  burden  of 
proving  an  intention  to  commit  a  fraud,  or  the  existence  of 
a  secret  trust  or  reservation, -rests  upon  the  creditor.  Gen- 
erally speaking,  subsequent  creditors  must  elicit  facts  show- 
ing contemplation  of  future  indebtedness  by  the  insolvent.^ 
Voluntary  deeds  it  should  be  remembered  arc  ordinarily 
invalid  only  at  the  suit  of  antecedent  creditors,^  and  the 
absence  of  evidence  showing  fraud  in  the  transaction  will 
usually  defeat  the  actions  of  subsequent  creditors.^  As  wc 
shall  presently  see  there  is  no  presumption  to  aid  the  latter 
class.''     A  specific  intent  to  defraud  subsequent  creditors 


'  See  Todd  v.  Nelson,  109  N.  Y.  327  ; 
Teed  v.  Valentine,  65  N.  Y.  474 ;  Sav- 
age v.  Murphy,  34  N.  Y.  508. 

'  Hinde's  Lessee  v.  Longworth,  1 1 
Wheat.  211;  Sexton  v.  Whcaton,  8 
Wheat.  229,  252  ;  S.  C.  i  Am.  Lea.  Cas. 
17  ;  Locschigk  v.  Addison,  4  Abb.  N. 


S.  (N.  Y.)  210,  affi'd  51  N.  Y.  660.  Sec 
§  89,  and  Chap.  V, 

3  Ford  V.  Johnston.  7  Hun  (N.  Y.) 
568  ;  Dygert  v.  Remcrschnider,  32  N. 
Y.  649  ;  Cole  v.  Varncr,  31  Ala.  244. 

'  Herring  v.  Richards,  i  McCrary 
574. 


154       FRAUD  UPON  SUBSEQUENT  CREDITORS.       §  96 

will  manifestly  avoid  the  transfer  as  to  them  ^  In  the  ab- 
sence of  proof  of  such  an  intent  the  transaction  will  stand. ^ 
Chancellor  Kent  in  his  celebrated  judgment  pronounced 
in  Reade  v.  Livingston,^  a  case  already  noticed,  said  :  "  The 
cases  seem  to  agree,  that  the  subsequent  creditors  are  let  in 
only  in  particular  cases  ;  as  where  the  settlement  was  made 
in  contemplation  of  future  debts,  or  where  it  is  requisite  to 
interfere  and  set  aside  the  settlement,  in  favor  of  the  prior 
creditor."*  Judge  Story  observed  :  "  Where  the  settlement 
is  set  aside  as  an  intentional  fraud  upon  creditors  there  is 
strong  reason  for  holding  it  so  as  to  subsequent  creditors, 
and  to  let  them  into  the  full  benefit  of  the  property."^  In 
Savage  v.  Murphy,*^  it  appeared  that  the  judgment-debtor 
was  engaged  in  an  extensive  business  on  credit,  in  which 
he  was  considerably  indebted,  and  that  he  stripped  himself 
of  the  title  to  all  his  property  by  transfer  to  his  wife  and 
children  for  a  merely  nominal  pecuniary  consideration, 
without  any  visible  change  of  possession,  and  with  the  in- 
tent to  contract  and  continue  a  future  indebtedness  in  his 
business  on  the  credit  of  his  apparent  ownership  of  the 
property  transferred,  and  to  avoid  payment  of  his  debts. 
After  the  transfer  he  continued  in  business,  making  new 
purchases  on  credit,  and  using  part  of  the  avails  of  each 
successive  purchase  to  pay  the  indebtedness  then  existing, 
during  a  period  of  about  ten  months,  at  the  end  of  which 
time  he  failed,  owing  debts  thus  contracted  amounting  to 
$3,500.  The  court,  upon  these  facts,  held  that  it  was  clear 
that  the  transfer  thus  made  was  fraudulent  and  void  as 


>  McPherson  v.  Kingsbaker,  22  Kan.  ^  3   Johns.    Ch.    (N.  Y.)    497.      See 

646  ;  United  States  v.  Stiner,  8  Blatchf.  Chap.  V. 

544 ;   Candee  v.  Lord,  2  N.  Y.   275  ;  ■*  See  Walter  v.  Lane,  i  MacAr.  (D. 

Anon.  I  Wall.  Jr.  113  ;  Horn  v.  Ross,  C.)  275. 

20  Ga.  223 ;  Black  v.  Nease,  37  Pa.  St.  °  See  also  Ede  v.  Knowles,  2  Y.  &  C. 

433  ;  Johnston  v.  Zane,  11  Gratt.  (Va.)  N.  R.  172-178,  cited  in  Story's  Eq.  Jur, 

552.  §  361,  n.;  Dewey  v.  Mover,  72  N.  Y.  76. 

2  Teed  v.  Valentine,  65  N.  Y.  474,  «  34  N.  Y.  508.     See  Todd  v.  Nelson, 

and  cases  cited.  109  N.  Y.  327. 


§  97       FRAUD  UPON  SUBSEQUENT  CREDITORS.        1 55 

against  subsequent  creditors.  The  design  to  obtain  a  credit 
after  the  conveyance  by  means  of  the  continued  possession 
and  apparent  ownership  of  the  property,  which  the  debtor 
thus  placed  beyond  the  reach  of  those  who  might  give  him 
future  credit,  was  plainly  fraudulent.  The  conclusion  of 
fraud  was  not  repelled  by  the  circumstance  that  the  delns 
owing  by  him  at  the  time  of  the  transfer  were  paid  with 
the  proceeds  of  credit  subsequently  acquired  by  the  means 
already  stated.  The  indebtedness  then  existing  was  merely 
transferred,  not  paid,  and  the  fraud  was  as  palpable  as  it 
would  have  been  if  the  debts  remaining  unpaid  were  owing 
to  the  same  creditors  to  whom  he  was  oblijiated  at  the  time 
of  the  transfers.^ 

§  97.  —  It  may  be  here  observed  that  a  fraudulent  and 
deceitful  conveyance  of  property,  made  without  valuable 
consideration,  and  with  intent  to  injure  the  rights  or  avoid 
the  debts  of  any  other  person,  is  invalid  as  to  subsequent 
creditors  as  well  as  to  those  who  were  creditors  at  the  time 
of  the  conveyance."  In  Parkman  v.  Welch, ^  Dewey,  J.,  in 
speaking  of  the  rights  of  subsequent  creditors,  said  :  "  This 
raises  the  question  whether  the  effect  of  the  statute  of  13 
Eliz.  c.  5,  is  to  avoid  conveyances  made  upon  secret  trust 
and  with  fraudulent  intent,  as  well  in  favor  of  subseciuent 
as  previous  creditors.  On  this  subject  we  apprehend  the 
law  is  well  settled,  ....  that  a  conveyance  fraudulent  at 


'  See  S.  p.  Carr  v.  Breese,  18  Hun  ing  in  some  hazardous  business  requir- 
(N.  Y.)  134  ;  S.  C.  I  Am.  Insolv.  Rep.  ing  such  credit,  or  the  debts  wliich  he 
255.  In  Todd  V.  Nelson,  109  N.  Y.  has  incurred  were  incurred  soon  after 
327,  Peckham,  J.,  said  :  "  The  theory  the  conveyance,  thus  making  the  fraud- 
upon  which  deeds  conveying  the  prop-  ulent  intent  a  natural  and  almost  a 
erty  of  an  individual  to  some  third  necessary  inference,  and  in  this  way  he 
party  have  been  set  aside  as  fraudulent  has  been  enabled  to  obtain  the  prop- 
in  regard  to  subsequent  creditors  of  erty  of  others  who  were  relying  upon 
the  grantor  has  been  that  he  has  made  an  appearance  which  was  wholly  dclu- 
a   secret   conveyance   of  his   property  sive." 

while  remaining  in  the  possession  and  '  McLane    v.   Johnson,    43    \'t.   48. 

seeming   ownership   thereof,  and    has  See  Clark  v.  French,  23  Me.  221. 

obtained  credit  thereby,  while  embark-  •''  19  Pick.  (Mass.)  237. 


156 


FRAUD  UPON  SUBSEQUENT  CREDITORS. 


§  97 


the  time  of  making  it,  might  be  avoided  in  favor  of  subse- 
quent creditors."^  In  Toney  v.  McGehee,^  the  rule  is  rec- 
ognized that  a  voluntary  conveyance  may  be  impeached  by 
a  subsequent  creditor  on  the  ground  that  it  was  made  in 


'  See  Carpenter  v.  McClure,  39  Vt.  9. 
In  Day  v.  Cooley,  118  Mass.  527,  the 
court  observed  :  "  It  is  well  settled  that 
if  a  debtor  makes  a  conveyance  with  the 
purpose  of  defrauding  either  existing  or 
future  creditors,  it  may  be  impeached 
by  either  class  of  creditors,  or  by  an 
assignee  in  insolvency  or  bankruptcy 
who  represents  both.  Parkman  v. 
Welch,  19  Pick.  (jMass.)  231  ;  Thacher 
V.  Phinney,  7  Allen  (Mass.)  146  ;  Win- 
chester V.  Charter,  12  Allen  (Mass.) 
606  ;  Wadsworth  v.  WiUiams,  100 
Mass.  126.  As  it  was  proved  in  this 
case  that  the  grantor  had  an  actual 
fraudulent  design  which  was  partici- 
pated in  by  the  grantee,  it  is  imma- 
terial whether  the  demandants  are  to 
be  regarded  as  subsequent  or  existing 
creditors  as  to  the  conveyance." 

'  38  Ark.  427  ;  i  Story's  Eq.  Jurisp. 
§  361  ;  Claflin  v.  Mess,  30  N.  J.  Eq. 
211;  Pope  V.  Wilson,  7  Ala.  690; 
Smith  V.  Greer,  3  Humph,  (Tenn.) 
118;  Reade  v.  Livingston,  3  Johns. 
Ch.  (N.  Y.)  481. 

Rights  of  subsequent  creditors — 
Laughton  v.  Harden, — The  rights  of 
subsequent  creditors  are  considered 
and  the  general  policy  of  the  courts 
in  dealing  with  fraudulent  transfers 
learnedly  discussed  in  Laughton  v. 
Harden,  68  Me.  208.  The  doctrine 
is  there  asserted  that  a  voluntary 
conveyance  from  father  to  son,  made 
with  the  intent  to  defraud  creditors, 
may  be  avoided  as  to  such  credit- 
ors without  allegations  or  proof  that 
the  grantee  participated  in  the  fraud- 
ulent intent.  The  court  said  :  "  The 
exact  question  presented  is  this :  Is 
a  voluntary  conveyance  from  father 
to  son,  made  by  the  grantor  with  an 


intent  to  defraud  subsequent  creditors, 
void  as  to  such  creditors,  when  there 
is  no  proof  that  the  grantee  partici- 
pated in  that  intent  when  he  received 
or  accepted  the  deed  ?  The  statute  of 
Elizabeth,  c.  5,  answers  the  question  in 
the  affirmative.  It  pronounces  every 
conveyance,  made  to  hinder,  delay,  or 
defraud  creditors,  utterly  void  as  against 
such  creditors,  unless  the  estate  shall 
be, '  upon  good  consideration,  and  bona 
fide,  lawfully  conveyed  to  such  person,' 
not  having  at  the  time  '  any  manner 
of  notice '  of  such  fraud.  Can  it  be 
said  that  this  estate  was  bo7ia  fide, 
'  lawfully '  conveyed,  or  that  a  grantee 
who  pays  no  consideration  for  land 
fraudulently  conveyed  to  him  has  '  no 
manner  of  notice  '  of  the  fraud  ?  But 
this  is  not  all  of  the  statute.  It  threat- 
ens a  penalty  against  a  party  to  such  a 
conveyance  who,  being  privy  and  know- 
ing thereto,  '  shall  wittingly  and  will- 
ingly put  in  use,  avow,  maintain,  jus- 
tify, and  defend  the  same,'  as  true  and 
bona  fide  and  upon  good  consideration. 
When  a  grantee  in  such  a  deed  be- 
comes informed  of  the  grantor's  intent, 
does  he  not  assist  in  executing  that 
intent  by  an  endeavor  to  uphold  and 
maintain  the  deed  ?  Is  he  not,  in  the 
eye  of  the  law,  presumed  to  be  a  par- 
ticipator in  the  fraud  ?  Should  not  an 
honest  grantee  repudiate  the  deed  ? 
The  grantee,  by  the  fraudulent  act  of 
his  grantor,  becomes  the  trustee  or 
depositary  of  property  which  belongs 
to  the  grantor's  creditors.  By  attempt- 
ing to  witlihold  it  from  the  creditors, 
does  not  the  grantee  himself  commit  a 
fraud  ?  If  innocent  in  the  beginning, 
does  he  not  become  guilty  in  the  end .'' 
The  governing  and  acting  intent  was 


§  9^  PROOF    OF    INTENT.  1 57 

fraud  of  existing  creditors  ;  but,  to  be  successful,  the  sub- 
sequent creditor  must  show  either  that  actual  fraud  was 
intended,  or  that  there  were  debts  still  outstanding,  which 
the  grantor  owed  at  the  time  it  was  made. 

§  98.  Proof  of  intent. — The  subject  of  the  intent  of  tne 
parties  to  an  alleged  fraudulent  transfer  will  be  considered 
presently.^  Speaking  of  the  sufficiency  of  the  evidence  of 
the  intent  to  defraud  subsequent  creditors,  Johnson,  J., 
said  :^  "  Upon  the  question  of  fraudulent  intent,  or  whether 
the  conveyance  is  fraudulent  in  fact,  as  to  subsequent  cred- 
itors, it  is  proper  to  consider  the  circumstances  of  its  being 
voluntary,  and  the  party  indebted  at  the  time  ;  and  if  ad- 
ditional circumstances  connected  with  those  two  be  suffi- 
cient to  show  fraud  in  fact,  it  is  void  as  to  subsequent  cred- 
itors. It  is  not  necessary  that  there  should  be  direct  proof 
to  show  the  fraud  ;  it  is  to  be  legally  inferred  from  the 
facts  and  circumstances  of  the  case,  where  those  facts  and 
circumstances  are  of  such  a  character  as  to  lead  a  reasonable 
man  to  the  conclusion  that  the  conv'eyance  was  made  with 
intent  to  hinder,  delay,  or  defraud  existing  or  future  cred- 
itors."^    Folger,   J.,  delivering  the  opinion   of  ilie   New 


the  grantor's.  Does  not  the  grantee  apparent  possession  of  means  and  prop- 
endeavor  to  avail  himself  of  it  and  erty,  be  enabled  to  create  a  very  great 
adopt  it  when  he  holds  on  to  the  deed  ?  amount  of  subsequent  indebtedness. 
No  other  conclusion  can  be  reached.  How  could  a  creditor  show  that  the 
Of  course  it  will  not  at  this  day  be  wife,  and  a  fortiori,  that  the  young 
questioned  that  any  conveyance  may  minor  children  knew  of  the  grantor's 
be  avoided  by  subsequent  as  well  as  fraud,  unless  the  knowledge  can  be 
by  prior  creditors,  if  fraud  was  by  such  imputed  to  them  under  such  circum- 
conveyance  meditated  against  subse-  stances  as  a  necessary  implication  of 
quent  creditors.  Wyman  v.  Brown,  50  law?  It  would  be  unnatural  for  a 
Me.  139;  Bailey  v.  Bailey,  6i  Me.  361.  debtor's  wife  and  children  to  believe 
Any  other  view  of  this  question  than  him  to  be  a  dishonest  man,  and  un- 
the  one  taken  by  us  would  permit  and  common  for  them  to  know  much  of  his 
encourage  most  iniquitous  frauds  upon  business  affairs." 
the  part  of  badly  disposed  debtors.  A  '  See  Chap.  .\IV. 
man  might  convey  all  his  property  to  '•  Rose  v.  Brown,  11  W.  Va.  134. 
his  wife  or  minor  children  upon  the  •''  See  Carpenter  v.  Roe,  10  N.  Y. 
eve  of  an  expected  bankruptcy,  and,  on  227;  Larkin  v.  McMulIin,  49  Pa.  St. 
account  of  his  undoubted  credit  and  29. 


158       CONVEYANCE  BY  EMBARRASSED  DEBTOR.        §  99 

York  Court  of  Appeals  in  Shand  v.  Hanley,'  observes  upon 
this  subject  that  "there  is  no  difference  in  result,  as  there 
is  no  difference  in  the  intention  to  produce  the  result,  be- 
tween a  transfer  of  property  to  defraud  a  creditor  existing 
at  the  time,  and  a  creditor  thereafter  to  be  made."^  A 
conveyance  intended  to  defraud  creditors  is  voidable  not 
only  as  to  existing  but  as  to  future  creditors.^  The  intent 
must  be  mutual.  Marriage,  as  vve  shall  elsewhere  see,  is  a 
valuable  consideration  which  is  much  respected  in  the  law, 
and  an  antenuptial  settlement,  though  made  by  the  settler 
with  the  design  of  defrauding  his  creditors,  will  not  be  an- 
nulled in  the  absence  of  the  clearest  proof  of  participation 
in  the  fraud  on  the  part  of  the  wife.* 

§  99.  Conveyance  by  embarrassed  debtor. — In  Wallace  v. 
Penfield,^  it  appeared  that  the  debtor,  who  was  somewhat 
indebted  at  the  time,  made  a  voluntary  settlement  upon  his 
wife,  by  causing  the  title  to  the  lands  in  question  to  be 
taken  in  her  name,  with  the  intention  of  immediately  build- 
ing upon  and  improving  the  land  and  using  it  as  a  perma- 
nent residence  for  himself  and  family.  It  was  shown  by  a 
preponderance  of  evidence  that  when  the  settlement  was 
effected,  and  during  the  period  the  land  was  being  built 
upon  and  improved,  the  debtor  had  property  which  credit- 
ors could  have  reached,  exceeding  in  value  his  indebtedness 
by  several  thousand  dollars,  and  was  engaged  in  an  active 
business  with  fair  prospects.  All  the  creditors  whose  claims 
existed  at  the  date  of  the  settlement,  or  during  the  period 
when  the  debtor  was  making  expenditures  for  improve- 
ments, had  been  fully  paid  and  discharged.     The  plaintiff's 


'71    N.    Y.    319,    322;    Matter    of  Thomson   v.   Dougherty,   12   S.  &  R. 

Brown,    39   Hun    (N.  Y.)  27;  Case  v.  (Pa.)  448;  Lockhard  v.  Beckley,  10  W. 

Phelps,  39  N.  Y.  164.  Va.  87. 

•  See  Mullen  V.Wilson,  44  Pa.  St.  416.  ■*  Prewit   v.  Wilson,   103    U.  S.  22. 

'  Partridge  v.  Stokes,  66  Barb.  (N.  See  Chap.  XX, 

Y.)  586.     See  Case  v.  Phelps,  39  N.  Y.  '  106  U.  S.  260 ;  S.  C.  I  Sup.  Ct.  Re- 

164;  Carr  v.   Breese,   81   N.  Y.  584;  porter,  216. 


§  99        CONVEYANCE  BY  EMBARRASSED  DEBTOR.       I  59 

claim  accrued  subsequently.  The  Supreme  Court  of  the 
United  States  very  properly  decided  that  these  facts  were 
entirely  consistent  with  an  honest  purpose  to  deal  fairly  with 
any  creditors  the  debtor  then  had,  or  might  thereafter  have 
in  the  ordinary  course  of  his  business,  and  that  neither  the 
conveyance  to  the  wife,  nor  the  withdrawal  of  the  husband's 
means  from  his  business  for  the  purpose  of  improving  the 
land  settled  upon  the  wife,  had  the  effect  to  hinder  or  de- 
fraud his  the-n  existing  or  subsequent  creditors.  In  Pepper 
V.  Carter,^  the  Supreme  Court  of  Missouri  said:  "Some 
would  make  an  indebtedness  per  se  evidence  of  fraud 
against  existing  creditors  ;  others  would  leave  every  con- 
veyance of  the  kind  to  be  judged  by  its  own  circumstances, 
and  from  them  infer  the  existence  or  non-existence  of  fraud 
in  each  particular  transaction.  Without  determining  the 
question  as  to  existing  creditors,  we  may  safely  affirm  that 
all  the  cases  will  warrant  the  opinion  that  a  voluntary  con- 
veyance as  to  subsequent  creditors,  although  the  party  be 
embarrassed  at  the  time  of  its  execution,  is  not  fraudulent 
pej'  se  as  to  them  ;  but  the  fact,  whether  it  is  fraudulent  or 
not,  is  to  be  determined  from  all  the  circumstances.  I  do 
not  say  that  the  fact  of  indebtedness  is  not  to  weigh  in  the 
consideration  of  the  question  of  fraud  in  such  cases,  but 
that  it  is  not  conclusive."  The  language  of  this  case  is 
quoted  approvingly  by  the  same  court  in  the  later  case  of 
Payne  v.  Stanton,^  where  it  is  said  :  "  The  doctrine  is  well 
settled  that  a  voluntary  conveyance  by  a  person  in  debt,  is 
not,  as  to  subsequent  creditors,  fraudulent/^?;-^*?.  To  make 
it  fraudulent  as  to  subsequent  creditors,  there  must  be  proof 
of  actual  or  intentional  fraud.  As  to  creditors  existing  at 
the  time,  if  the  effect  and  operation  of  the  conveyance  arc 
to  hinder  or  defraud  them,  it  may,  as  to  them,  be  justly  re- 
garded as  invalid,  but  no  such  reason  can  he  urued  in  behalf 
of  those  who  become  creditors  afterwards."     These  cases 

'  n  Mo.  543.  '  59  Mo,  159. 


l6o  PLACING    PROPERTY    BEYOND    RISK.  §    TOO 

in  Missouri  are  quoted  from  at  length,  and  declared  to  be 
controlling,  by  the  United  States  Supreme  Court  in  Wal- 
lace V.  Penfield,  ubi  supra.  In  the  latter  case,  however, 
the  facts  proved  and  found  by  the  court  expressly  repel  the 
idea  that  the  debtor  was  embarrassed  or  insolvent  when  the 
settlement  was  made ;  and  the  decision  can  scarcely  be  re- 
garded as  fully  approving  Payne  v.  Stanton  and  similar 
cases  to  the  effect  that  an  embarrassed  debtor  may  make  a 
voluntary  conveyance  which  will  be  upheld  against  subse- 
quent creditors.  These  Missouri  cases  are  at  least  danger- 
ously near  the  border  line.  The  court,  in  Payne  v.  Stanton, 
draws  the  distinction  between  existing  and  subsequent  cred- 
itors, and  says  that  the  conveyance  might  hinder,  delay,  and 
defraud  the  former,  "  but  no  such  reason  can  be  urged  in 
behalf  of  those  who  become  creditors  afterwards."  This, 
we  respectfully  urge,  is  attaching  undue  importance  to  the 
exact  date  or  period  of  time  when  the  creditor's  claim  ac- 
crued. The  embarrassed  debtor,  under  this  rule,  might 
voluntarily  alienate  the  mass  of  his  property,  then  secure 
loans  or  incur  obligations  to  creditors,  whose  claims  would 
thus  be  subsequent  to  the  voluntary  conveyance,  and  with 
the  money  thus  acquired  liquidate  the  obligations  existing 
when  the  conveyance  was  effected.  The  embarrassment  of 
the  debtor  when  the  transfer  \vas  made  calls  into  being  the 
claims  of,  and  obligations  to,  the  new  creditors ;  the  deficit 
then  existed,  and  the  liability  has  been  merely  transferred 
to  new  parties,  while  the  debtor's  embarrassed  estate  has 
been  further  crippled  or  rendered  hopelessly  insolvent  by 
the  voluntary  alienation.  It  seems  to  follow  that  the  safer 
and  more  prudent  rule  would  be  to  hold  that  no  voluntary 
conveyance  by  an  embarrassed  debtor  should  be  upheld 
against  creditors,  whether  their  claims  accrued  prior  or  sub- 
sequent to  the  transfer. 

§  100.  Placing  property  beyond  the  risk  of  new  ventures  or 
speculations. — This  brings  us  to  the  most  important  branch 


§    lOO  PLACING    PROPERTY    BEYOND    RISK.  l6l 

of  the  subject,  viz.,  the  effect  of  conveyances,  gifts,  and 
settlements  made  to  avoid  the  risks  of  losses  likely  to  result 
from  new  business  schemes.  To  illustrate,  a  baker  who  had 
been  carrying  on  business  for  some  years  being  about  to 
purchase  a  grocery  business,  which  he  intended  to  carry  on 
together  with  his  own  trade,  made  a  voluntary  settlement 
of  nearly  the  whole  of  his  property  upon  his  wife  and  chil- 
dren. He  then  purchased  the  grocery  business,  and  having 
lost  money  sold  it,  but  continued  in  business  as  a  baker. 
Three  years  after  the  settlement  he  filed  a  licjuidation 
petition.  The  court  held  that  independently  of  the  ques- 
tion whether  he  was  solvent  at  the  date  of  the  settlement, 
it  was  voidable  as  against  the  trustee  in  liquidation,  under 
the  Stat.  13  Eliz.  c.  5,  on  the  ground  that  it  was  evidently 
executed  with  the  view  of  putting  the  settler's  property  out 
of  the  reach  of  his  creditors  in  case  he  should  fail  in  the 
speculation  on  which  he  was  about  to  enter,  in  carrying  on 
a  new  business  of  which  he  knew  nothing.^  If  a  settlement 
is  made  "  on  the  eve  of  a  new  business,  and  with  a  view  of 
providing  against  its  contingencies,  it  is  as  unavailing 
against  new  creditors  as  against  old  ones."^  This  same 
general  principle  was  involved  in  Case  v.  Phelps,'^  in  the 
New  York  Court  of  Appeals.  Woodruff,  J.,  a  judge  of 
much  learning  and  great  vigor  of  mind,  said  :  '*  May  a  per- 
son about  to  engage  in  business  which  he  believes  may  in- 


'  Ex  parte  Russell.  In  re  Butter-  law  should  not  be  so  framed  or  con- 
worth,  19  Ch.  D.  588;  s.  C.  51  L.  J.  strued  as  to  tempt  men  to  desert  their 
Ch.  521  ;  46  L.  T.  N.  S.  113;  30  W.  R.  legitimate  business,  and  engage  in 
584;  following  Mackay  v.  Douglas,  14  specious  and  hazardous  speculations, 
L.  R.  Eq.  106.  Compare  Winchester  concerning  the  dangers  of  which  they 
V.  Charter,  102  Mass.  272  ;  Beeckman  are  ignorant,  by  allowing  them  to 
V.Montgomery,  14  N.  J.  Eq.  106 ;  Cra-  "make  a  feather  bed  on  which  they 
mer  v.  Reford,  17  N.  J.  Eq.  383;  Na-  may  fall  lightly."  under  the  plea  of 
tional  Bank  of  Metropolis  v.  Sprague,  affection  for  their  wives  and  children. 
20  N.  J.  Eq.  25;  Annin  v.  Annin,  24  Thomson  v.  Dougherty,  12  S.  &  R. 
N.  J.  Eq.  194;  Case  v.  Phelps,  39  N.  (Pa.)  451. 
Y.  164.  '  39  N.  Y.  169. 

'  Black  V.  Nease,  37  Pa.  St.  438.   The 
11 


l62  PLACING    PROPERTY    BEYOND    RISK.  §    IQO 

volve  losses,  with  a  view  to  entering  upon  such  business, 
convey  his  property  to  his  wife,  voluntarily,  without  con- 
sideration, to  secure  it  for  the  benefit  of  himself  and  family, 
in  the  event  that  such  losses  should  occur?  I  cannot  re- 
o-ard  this  question,  as  in  substance,  other  than  the  inquiry, 
May  a  man,  for  the  purpose  of  preventing  his  future  credit- 
ors from  collecting  their  demands  out  of  his  property  then 
owned,  and/br  the  purpose  of  casting  upon  them  the  haz- 
ards of  his  success  in  the  business  in  which  he  is  about  to 
engage,  convey  his  property  without  consideration  to  his 
wife,  in  order  to  secure  the  benefit  of  it  to  himself  and 
family,  however  disastrous  such  business  may  prove,  and 
continue  in  the  possession,  not  even  putting  the  deeds  upon 
record,  until  after  such  subsequent  indebtedness  arises  ?  "  * 
The  question  of  the  validity  of  a  gift  or  settlement,  as  to 
subsequent  creditors,  as  we  have  said,  turns  upon  the  ques- 
tion as  to  whether  it  was  made  in  contemplation  of  future 
debts,^  or  to  secure  the  debtor  "a  retreat  in  the  event  of  a 
probable  pecuniary  disaster  in  a  hazardous  business  in  which 
he  proposed  to  embark."^  To  bring  the  transfer  within 
this  rule,  "  it  must  be  executed  with  the  intention  and  de- 
sign to  defraud  those  who  should  thereafter  become  his 
creditors,"*  the  debtor  proposing  to  throw  the  hazards  of 
the  business  in  which  he  is  about  to  engage  upon  others, 
instead  of  honestly  holding  his  means  subject  to  the  chance 
of  the  adverse  results  incident  to  all  business  enterprises.^ 

But  these  cases  must  be  considered  within  proper  restric- 
tions.    Thus,  where  a  man  who  was  solvent  paid  for  prop- 


'  See  City  Nat.  Bank  v.   Hamilton,  Sexton   v.    Wheaton,    8   Wheat.  229 ; 

34  N.  J.  Eq.  160.  Mullen    v.   Wilson,   44    Pa.   St.    418; 

"^  Walter  v.  Lane,  i  MacAr.  (D.  C.)  Stileman    v.    Ashdown,    2    Atk.   481. 

282.  Compare  United  States  v.  Griswold,  7 

^  Fisher  V.  Lewis,  69  Mo.  631.  Sawyer    335;    McPherson    v.    Kings- 

^  Matthai  v.  Heather,  57  Md.  484.  baker,  22  Kan.  646  ;  Sheppard  v.  Thorn- 
See  Williams  v.  Banks,  11  Md.  198;  as,  24  Kan.  780;  Kirksey  v.  Snedecor, 
Moore  V.  Blondheim,  19  Md.  172.  60  Ala.    192;   Marshall  v.  Croom,  60 

5  Smith   V.  Vodges,  92  U.  S.    183;  Ala.  121.    * 


§    lOI  CONVEYANCES    AVOIDED.  1 6 


O 


erty  which  he  procured  to  be  conveyed  to  his  wife,  and 
there  was  no  evidence  tending  to  show  that  by  so  doing  he 
intended  to  defraud  any  subsequent  creditors,  it  has  been 
held  that  the  conveyance  is  perfectly  valid  in  her  favor  as 
against  his  subsequent  creditors,  and  that  a  husband  had  a 
right  to  make  a  settlement  of  property  upon  his  wife,  pro- 
vided it  was  free  from  fraud. ^  Subsequent  indebtedness 
cannot  be  invoked  to  make  that  fraudulent  which  was  hon- 
est and  free  from  impeachment  at" the  time.*^  In  Graham 
V.  Railroad  Co.,'  a  leading  and  important  case,  it  is  said  to 
be  a  well-settled  rule  of  law  that  if  an  individual,  being 
solvent  at  the  time,  without  any  actual  intent  to  defraud 
creditors,  disposes  of  property  for  an  inadequate  considera- 
tion, or  even  makes  a  voluntary  conveyance  of  it,  subse- 
quent creditors  cannot  question  the  transaction.  The  argu- 
ment advanced  is  that  such  creditors  are  not  injured  ;  they 
gave  credit  to  the  debtor  in  the  status  which  he  had  after 
the  voluntary  conveyance  was  made.  This  rule  was  applied 
to  an  alienation  by  a  corporation.* 

§  loi.  Conveyances  avoided. — The  Chancellor  said,  in 
Beeckman  v.  Montgomery  :°  "Aside  from  the  fact  that 
the  deed  was  made  by  the  father  in  contemplation  of  future 
indebtedness,  there  are  strong  circumstances  indicating  the 
existence  of  actual  fraud.  The  deed  was  made  on  the  eve 
of  the  grantor  engaging  in  mercantile  business,  which  would 


'  Curtis  V.  Fox,  47  N.  Y.  301  ;  Phil-  in  a  note.     In  Porter  v.  Pittsburg  Bes- 

lips  V.  Wooster,  36  N.  Y.  412.  semer   Steel  Co.,  120  U.    S.  673,  the 

^  See  Babcock  v.  Eckler,  24  N.  Y.  court  said:  "It  is  a  well-settled  prin- 
630;  Reade  v.  Livingston,  3  Johns.  Ch.  ciple,  that  subsequent  creditors  cannot 
(N.  Y.)  500  ;  Seward  v.  Jackson,  8  be  heard  to  impeach  an  executed  con- 
Cow.  {N.  Y.)  406  ;  Hinde's  Lessee  v.  tract,  where  their  dealings  with  the 
Longworth,  11  Wheat.  199.  company,   of    which    they    claim    the 

M02    U.  S.    148.     See   Wallace   v.  benefit,  occurred  after  the  contract  be- 

Penfield,  106  U.  S.  260;  Mattingly  v.  came  an  executed  contract." 

Nye,  8  Wall.  370;  Sexton  v.  Wheaton,  ^  Compare  Wabash,  St.  L.  &  P.  Ry. 

8  Wheat.  239,  per  Marshall,  C.  J. ;  S.  C.  Co.  v.  Ham,  1 14  U.  S.  587,  594. 

I    Am.  Lea.  Cas.    17,  where   the    law  '  14  N.  J.  Eq.  112. 
upon  this  subject  is  learnedly  discussed 


164  CONVEYANCES  NOT  FRAUDULENT.         §  I02 

require  for  its  successful  pursuit  both  capital  and  credit. 
He  disposed,  at  the  time  of  the  conveyance,  of  the  entire 
control  of  his  real  estate,  which  constituted  the  bulk  of 
his  property,  leaving  himself  an  inadequate  capital  for  con- 
ducting his  business  or  raising  loans.  The  credit  which 
he  obtained  was  due  to  his  former  standing  as  a  man  of 
responsibility.  The  conveyances  to  his  children  were  not 
advancements  adapted  to  the  means  and  situation  in  life  of 
the  grantor — they  absorbed  his  whole  property.  The  deed 
to  the  defendant  was  made  while  he  was  an  infant  but  six- 
teen years  of  age,  not  needing  an  advancement,  and  not  of 
discretion  to  take  charge  and  management  of  the  property. 
It  was  kept  secret  for  more  than  a  year,  and  was  not  left 
at  the  office  to  be  recorded  till  the  day  after  a  suit  at  law 
was  commenced  by  the  complainants  for  the  recovery  of 
their  debt."^  If  a  person  about  to  contract  debts  makes  a 
voluntary  conveyance,  with  the  intent  to  deprive  future 
creditors  of  the  means  of  enforcing  collection  of  their 
debts,  and  this  purpose  is  accomplished,  it  is  very  clear 
that  such  creditors  are  injured  and  defrauded.^  A  creditor 
has  a  right  when  extending  credit,  to  rely  upon  the  honesty 
and  good  faith  of  the  debtor,  and  may  assume,  without  in- 
quiry, that  the  debtor  has  made  no  fraudulent  conveyances 
of  property.^ 

§  102.  Conveyances  not  considered  fraudulent. — But  the 
courts  will  not  willingly  overturn  a  settlement  or  voluntary 
alienation  at  the  suit  of  a  subsequent  creditor,  upon  slight, 
unsubstantial,  or  intangible  proof.     Carr  v.  Breese"*  is  an 

1  See  City  Nat.  Bank  v.  Hamilton,  34  cock  v.  Kiely,  41  Conn.  611 ;  Williams 

N.  J.  Eq.  158  ;  Carpenter  v.  Carpenter,  v.  Davis,  69  Pa.  St.  21  ;  Pawley  v.  Vo- 

25  N.  J.  Eq.  194;  Dick  v.  Hamilton,  gel,  42  Mo.  303  ;  Herschfeldt  v.  George, 

Deady  322  ;   Burdick   v.  Gill,  7  Fed.  6  Mich.  456  ;  Hiiliard  v.  Cagle,  46  Miss. 

Rep.  668 ;  Carter  v,  Grimshaw,  49  N.  309 ;  Huggins  v.  Perrine,  30  Ala.  396. 
H.  100;  Snyder  v.  Christ,  39  Pa.  St.         -  Burdick  v.  Gill,  7  Fed.  Rep.  670. 
499  ;  Mullen  v.  Wilson,  44  Pa.  St.  413  ;         ^  Ibid. 

Barlingv.  Bishopp,  29Beav.  417;  Clark        •'Si  N.  Y.  584;  overruling  18  Hun 

V.  Killian,  103  U.  S.  766,  affi'g  Killian  (N.  Y.)  134.     See  s.  P.  Phoenix  Bank  v. 

V.  Clark,  3  MacAr.  (D.  C.)  379 ;  Hitch-  Stafford,  89  N.  Y.  405. 


§  I02        CONVEYANCES  NOT  FRAUDULENT.  1 65 

illustration.  In  that  case  the  New  York  Court  of  Appeals, 
overruling  the  court  below,  decided  that  where  a  husband, 
worth  $22,000,  owing  debts  amounting  to  $2,800,  which 
were  subsequently  paid,  and  engaged  in  a  prosperous  busi- 
ness, purchased  property  costing  about  $16,000,  and  took 
it  in  the  name  of  his  wife,  and  paid  about  $10,000  of  the 
consideration  by  mortgage  on  his  real  estate,  and  the  bal- 
ance by  mortgage  upon  the  premises  purchased,  the  settle- 
ment was  not  unsuitable  or  disproportionate  to  his  means. 
Miller,  J.,  speaking  for  the  court,  said  :  "  There  was  no 
insolvency  in  fact  or  in  contemplation,  no  new  enterprise 
started  which  involved  unusual  or  extraordinary  hazard,  but 
the  continuance  of  the  business  of  the  grantor  for  the 
period  of  three  years,  and  no  dishonest  failure,  or  attempt 
in  any  form  to  defraud.  An  existing  indebtedness  alone 
does  not  render  a  voluntary  conveyance  absolutely  fraudu- 
lent and  void  as  against  creditors,  unless  there  is  an  intent 
to  defraud.^  This  is  especially  the  case  when  it  is  shown 
that  the  residue  of  the  property  was  amply  sufficient  to  pay 
all  debts."  ^  It  may  be  observed  that  although  in  Babcock 
V.  Eckler,^  the  disproportion  was  far  greater  than  in  Carr 
V.  Breese,"*  the  conveyance  was  upheld  ;  but  in  this  case 
evidence  was  introduced  tending  to  show  that  the  convey- 
ance was  not  entirely  voluntary.^  Again  in  Carpenter  v. 
Roe,^  the  court,  citing  Hinde's  Lessee  v.  Longworth,"  say  : 
"  If  it  can  be  shown  that  the  grantor  was  in  prosperous  cir- 
cumstances and  unembarrassed,  and  that  the  gift  was  a  rea- 
sonable provision,  according  to  his  state  and  condition  in 
life,  and  leaving  enough  for  the  payment  of  the  debts  of 


'  Citing  Van    Wyck    v,    Seward,   6         ^  24  N.  Y.  623. 
Paige  (N.  Y.)  62.  ••  81  N.  Y.  584. 

'  Citing  Jackson  v.  Post,  15  Wend,         °  See  Childs  v.  Connor,  38  N.  Y.  Su- 

(N.  Y.)  588;   Pliillips  V.  Wooster,  36  perior  Ct.  471. 
N.  Y.  412  ;  Dunlap  v.  Hawkins,  59  N.         "  10  N.  Y.  227. 
Y.  342.  '  II  Wheat.  213. 


l66  SUBSEQUENT  CREDITORS.         §§  IO3,  IO4 

the  grantor,"  the  presumptive  evidence  of  fraud  would  be 
met  and  repelled.^ 

§  103.  Subrogation  of  subsequent  creditors. — A  device  to 
which  fraudulent  insolvents  often  resort  consists  in  making 
a  voluntary  conveyance  and  following  this  up  by  paying  all 
the  antecedent  or  existing  creditors,  practically  with  the 
moneys  derived  from  the  credit  extended  by  subsequent 
creditors.  Savage  v.  Murphy,^  already  quoted,  was  such  a 
case."'^  It  is  a  most  unsubstantial  mode  of  paying  a  debt  to 
contract  another  of  equal  amount.  It  is  the  merest  fallacy 
to  call  such  an  act  getting  out  of  debt,^  and  the  case 
should  be  treated  as  if  the  prior  indebtedness  had  con- 
tinued throughout.^ 

§  104.  Subsequent  creditors  sharing  with  antecedent  credit- 
ors.— In  a  case  which  arose  in  Massachusetts,  in  which  an 
administrator  sought  to  annul  a  fraudulent  alienation  made 
by  his  intestate,  Dewey,  J.,  said  :  "Though  the  ground  of 
avoiding  this  conveyance  is  that  the  land  was  liable  to  be 
taken  to  satisfy  existing  creditors  only,  yet  when  the  con- 
veyance is  avoided,  the  proceeds  of  the  sale  will  be  assets 
generally,  and  other  creditors  will  receive  the  benefit  there- 
of incidentally."^  In  Kehr  v.  Smith, ^  Davis,  J.,  observed  : 
"  It  is  well  settled,  where  a  deed  is  set  aside  as  void  as  to 
existing  creditors,  that  all  the  creditors,  prior  and  subse- 
quent, share  in   the  fund  pro  I'atay^     Mr.   Peachey  ob- 


'  See  Crawford  v.  Logan,  97  111.  396 ;  "  Norton  v.  Norton,  5  Cush.  (Mass.) 

Clark  V.  Killian,  103  U.  S.  766 ;  Wal-  530. 

lace  V.  Penfield,  106  U.  S.  260 ;  Pepper  '  20  Wall.  36. 

V.  Carter,  1 1  Mo.  540 ;  Payne  v.  Stan-  ®  Citing  Magawley's  Trust,  5  De  G. 

ton,  59  Mo.  158;  Genesee  River  Nat.  and  Sm.  i  ;  Richardson  v.  Smallwood, 

Bank  v.  Mead,  92  N.  Y.  637.  Jacob  552-558  ;  Savage  v.  Murphy,  34 

'^  34  N.  Y.  508.  N.  Y.   508 ;  Iley  v.  Niswanger,  Harp. 

'  See  §  96.      See   also   Churchill   v.  Eq.  (S.  C.)  295  ;  Robinson  v.  Stewart, 

Wells,  7  Coldw.  (Tenn.)  364;  Moritz  10  N.  Y.  189;  Thomson  v.  Dougherty, 

V.  Hoffman,  35  111.  553.  12  S.  &  R.  (Pa.)  448;    Henderson  v. 

'  Paulk  V.  Cooke,  39  Conn.  566.  Hoke,  3  Dev.  (N.  C.)  Law  12-14  I  Kis- 

°  Edwards    v.    Entwisle,    2    Mackey  sam  v.  Edmundson,  i  Ired.  Eq.  (N.  C.) 

(D.  C.)  43.  180;  Sexton  v.  Wheaton,  i  Am.  Lea. 


§    I05        SUBSEQUENT    AND    ANTECEDENT    CREDITORS.  16/ 

serves  :^  "  It  has,  howev^er,  never  been  disputed  but  that  a  sub- 
sequent creditor  would  participate  in  the  benefit  of  a  decree 
instituted  by  a  prior  creditor,  and  would  have  the  same 
equity  for  having  the  property  applied.  Again  no  distinc- 
tion has  been  drawn  in  such  cases  between  the  different 
classes  of  creditors,  that  is,  between  those  whose  debts  ex- 
isted at  the  time  the  deed  was  executed,  and  those  who  be- 
came creditors  subsequently,  or  that  any  priority  can  be 
given  to  those  who  were  creditors  at  the  date  of  the  instru- 
ment over  the  subsequent  creditors ;  all  would,  in  fact, 
participate  pro  rata.'"^  There  has  been,  however,  some 
hesitancy  on  the  part  of  the  courts  in  holding  that  a  deed 
which  existing  creditors  could  avoid,  was,  after  avoidance  by 
them,  to  be  considered  void  as  to  all  creditors  ;  for  that  is 
practically  the  effect  of  letting  in  subsequent  creditors, 
especially  to  share  pro  rata.  Though  the  deed  cannot  be  set 
aside  at  the  instance  of  subsequent  creditors,  yet  the  author- 
ities seem  to  give  them  the  same  benefit  when  the  antecedent 
creditors  succeed  in  annulling  it.  It  would  seem  to  re- 
sult that  while  there  is  a  discrimination  in  the  right  to  at- 
tack the  conveyance,  there  is  none  as  to  sharing  in  the  suc- 
cessful result.  In  considering  this  feature,  however,  the 
rule  that  a  creditor,  by  filing  a  bill,  acquires  an  ecjuitable  lien 
and  preference  in  certain  cases,  must  not  be  overlooked.^ 

§  105.  Mixed  claims  accruing  prior  and  subsequent  to  alien- 
ation.— The  right  of  a  grantee  or  vendee,  from   whom  a 


Cas.  45  ;    Norton  v.  Norton,    5   Cush.  Appeal,  63  Pa.  St.  289.     See  Churchill 

(Mass.)  529;    O'Daniel  v.  Crawford,  4  v.  Wells,  7  Coldw.  (Tenn.)  364:  Trim- 

Dev.  (N,  C.)  Law    197-204;  Reade  v.  ble  v.  Turner,  21    Miss.  348;  Kipp  v. 

Livingston,  3  Johns.  Ch.  (N.  Y.)  481-  Hanna,  2  Bland's  Ch.  (Md.)  26;  Beach 

499;  Townshend  v.  Windham,  2  Yes.  v.  White,  Walker's  Ch.  (Mich.)  495; 

Sen.  10;  Jenkyn  V.  Vaughan,  3  Drewry  Thomson  v.  Dougherty.    12    S.  &    R. 

419-424.     See  Bassett  V.  McKenna,  52  (Pa.)  448;  Kidney  v.  Coussmaker,  12 

Conn.  442,  citing  this  section  ;  Day  v.  Ves.  Jr.  136,  note.     Compare  Converse 

Cooley,  118  Mass.  524.  v.  Hartley,  31  Conn.  379. 

'  Peachey  on  Marriage  Settlements,  •*  See  Pullis  v.  Robinson,  5  Mo.  App. 

p.  197.  548.     See  §61  ;  also  Chap.  XXV. 

-  Cited  wilh  approval   in   Amnion's 


1 68  MIXED    CLAIMS.  §    IO5 

creditor  seeks  to  wrest  property  held  in  trust  for  a  debtor, 
to  require  the  creditor  to  show,  in  a  proper  case,  that  his 
debt  accrued  before  the  conveyance  which  is  questioned,  is 
clearly  established.  As  a  voluntary  or  fraudulent  convey- 
ance is  ordinarily  good  between  the  parties,  and  can  be  up- 
held except  as  against  certain  classes  of  persons,  it  follows 
that  the  vendee  can  force  the  plaintiff  to  show  that  he  comes 
within  some  privileged  class  entitled  to  impeach  the  trans- 
action. 

Where  it  is  important  or  vital  to  the  creditor's  success  to 
show  that  he  was  an  existing  creditor  as  to  the  conveyance, 
and  it  appears  that  some  of  the  items  of  his  claims  accrued 
prior  and  others  subsequent  to  the  conveyance,  and  all 
these  items  are  embodied  in  one  judgment,  it  has  been 
held  in  several  cases  that  he  is  to  be  treated  as  a  subsequent 
creditor,  not  entitled  to  attack  the  conveyance.^  In  Baker 
v.  Oilman^  the  creditor  was  an  attorney,  and  his  claim  was 
for  services.  Johnson,  J.,  said  :  "The  plaintiff  was  clearly 
a  subsequent  creditor  of  Oilman.  His  employment,  by 
virtue  of  his  retainer,  was  a  continuous  one  until  the  de- 
termination of  the  actions.  It  was  a  single  demand  for 
services,  a  small  portion  of  which  were  rendered  before  the 
conveyance,  and  the  far  larger  portion  long  afterwards. 
This  being  embraced  in  one  judgment,  nearly  two  years 
after  the  conveyance,  renders  the  plaintiff  clearly  a  subse- 
quent creditor."  In  Reed  v.  Woodman,^  it  appeared  from 
the  evidence  that  the  greater  part  of  the  debt  which  was 
the  foundation  of  the  judgment  rendered  in  favor  of  the  de- 
mandant accrued  subsequent  to  the  date  of  the  challenged 
conveyance.  The  court  said :  "  The  levy  was  entire,  and 
cannot  be  so  apportioned  or  divided  as  to  constitute  a  satis- 


'  See  Miller  V.  Miller,  23  Me.  22 ;  s.  558.      Contra,    Ecker  v.   Lafferty,    20 

C.  39  Am.  Dec.  598,  and  notes  ;  Reed  Pittsb.  L.  J.  (Pa.)  135. 

V.  Woodman,  4   Me.   400  ;    Usher  v.  '  52  Barb.  (N.  Y.)  38. 

Hareltine,  5  Me.  471  ;  Quimby  v.  Dill,  '  4  Me.  400. 
40  Me.  528  ;  Moritz  v.  Hoffman,  35  111. 


§   I06  STATUS    OF    CREDITORS.  1 69 

faction  for  that  part  of  his  debt  which  was  due  prior  to 
that  deed.  The  demandant,  having  taken  judgment  for  his 
whole  demand,  is  to  be  regarded  as  a  creditor  subsequent 
to  the  conveyance  of  the  land  in  question  by  his  debtor. 
He  cannot  therefore  impeach  that  conveyance  but  bv 
showing  actual  fraud."  ^ 

§  106,  Status  of  creditors  whose  claims  accrued  after  notice 
of  alienation. — As  a  general  rule  a  subsequent  creditor  who 
acquired  his  claim  with  knowledge  or  notice  of  the  con- 
veyance sought  to  be  annulled,  cannot  attack  it  as  fraudu- 
lent.^ In  Baker  v.  Oilman,  Johnson,  J.,  said:  "I  do  not 
think  a  creditor,  who  has  trusted  his  debtor  after  being 
fully  informed  by  the  latter  that  he  has  put  his  property 
out  of  his  hands,  by  a  conveyance,  valid  as  between  him 
and  his  grantee,  though  voidable  as  to  existing  creditors, 
should  ever  be  allowed  to  come  into  court  and  claim  that 
such  conveyance  was  fraudulent  and  void,  as  to  him, 
on  account  of  such  indebtedness.  As  to  such  creditor,  a 
conveyance  of  that  kind  would  not  be  fraudulent,  in  any 
sense,  and  could  not,  on  that  ground,  be  avoided."^ 


'  See  Humes  v.  Scruggs,  94  U.  S,  22.        ^  52  Barb.  (N.  Y.)  39.     See  Sledge 

•*  Lehmberg  v.   Biberstein,   51    Tex,  v.  Obenchain,  58  Miss.  670;  Kane  v. 

457  ;  Monroe  v.  Smith,  79  Pa.  St.  459 ;  Roberts,  40 Md.  594;  Williams  v.  Banks, 

Herring  v.  Richards,  3  Fed.  Rep.  443.  11    Md.  198;  Sheppard  v.  Thomas,  24 

See  Knight  v.  Forward,  63  Barb.  (N.  Kans.  780.     Compare  Kirksey  v.  Sned- 

Y.)3ii;  Lewis  v.Castleman, 27 Tex. 407.  ecor,  60  Ala.  192. 


CHAPTER   VII. 


WHO    MAY    BE    COMPLAINANTS. 


§107. 
108. 
109. 
no. 
III. 

112. 

113- 
114. 
115. 
116. 
117. 


Parties  complainant. 
Joinder  of  complainants. 
Suing  on  behalf  of  others. 
"  And  others." 
Surety. 

[  Executors  and  administrators. 

Assignee  in  bankruptcy. 

General  assignee. 

Receivers. 

Receivers  of  corporations. 


§118.  Foreign  receivers. 

119.  Creditors  of  corporations. 

120.  Sheriff. 

121.  Heirs — Widow. 

122.  Husband  and  wife. 

123.  Tort  creditor. 

124.  Overseer  of  the  poor. 

125.  Creditors  having  liens. 

126.  Purchaser      removing 

brances. 

127.  Creditors  opposing  will. 


§  107.  Parties  complainant. — The  rights  of  the  two  great 
classes — existing  and  subsequent — into  which  creditors  are 
necessarily  divided,  having  been  considered/  the  discussion 
would  not  be  complete  without  noticing  in  detail  the  cases 
in  which  complainants  in  various  capacities  are  allowed  to 
prosecute  the  class  of  litigations  under  consideration.  The 
principle  must  be  kept  constantly  in  view  that  fraudulent 
conveyances  can  be  assailed  only  by  those  who  have  been 
injured,^  and  are  voidable  only  in  favor  of  parties  occupy- 


1  See  Chaps.  V.,  VI. 

"  Sides  V.  McCullough,  7  Mart.  (La.) 
654;  s.  C.  12  Am.  Dec.  519;  Hall  v. 
Moriarty,  57  Mich.  345.  A.  conveyed 
to  B.  in  fraud  of  creditors.  A  railroad 
company  agreed  to  take  the  land  and 
pay  an  award  of  damages.  When  sued 
for  the  amount  of  the  award  the  com- 
pany set  up  that  B.  derived  title  by 
fraud.  The  plea  was  held  bad.  La- 
crosse &  M.  R.R.  Co.  V.  Seeger,  4  Wis. 
268.    So  a  party  with  whom  goods  are 


deposited  for  safe  keeping  cannot  set 
up  fraud  in  the  title,  the  court  in  one 
case  saying :  "  We  recognize  the  right 
of  no  man,  in  this  way,  to  turn  Quixote 
and  fight  against  fraud,  for  justice  sake 
alone.  In  the  mouth,  therefore,  of  this 
defendant,  I  do  not  perceive  the  right 
to  set  up  this  defense,  even  if  it  were 
true  in  fact."  Hendricks  v.  Mount,  5 
N.  J.  L.  738,  743.  Compare  Bell  v. 
Johnson,  in  III.  374. 


§    107  PARTIES    COMPLAINANT.  l/I 

ing  the  positions  of  creditors^  or  subsequent  purchasers." 
The  creditor  who  first  institutes  a  suit  in  ciiancery  to  avoid 
a  fraudulent  conveyance  is  entitled  to  relief,  without  regard 
to  other  creditors  standing  in  the  same  right,  who  have  not 
made  themselves  joint  parties  with  him,'^  or  taken  any  pro- 
ceedings. The  creditors  spoken  of  as  entitled  to  discover 
equitable  assets  or  annul  covinous  transfers,  are  the  creditors 
of  the  grantor  or  donor  making  the  fraudulent  conveyance."* 
That  a  "  fraud  upon  the  public"  was  the  design  of  the  trans- 
fer is  not  a  sufficient  ground  for  avoiding  it.^  A  fraudulent 
purpose  is  harmless  if  unattended  with  any  wrongful  effect. '^ 
Again,  the  fraudulent  intent,  as  we  shall  show,  must  be  con- 
nected with  the  transaction  assailed,  and  not  relate  merely 
to  some  entirely  independent  act."^  But  it  is  not  necessary 
that  any  particular  creditor  should  be  mentioned  by  name.^ 
It  is  well  observed  by  Chancellor  Kent,  in  Brown  v. 
Ricketts,^  that  the  question  of  parties  is  frequently  perplex- 
ing and  difficult  to  reduce  to  rule.  The  remark  as  will  be 
manifest  is  peculiarly  appropriate  to  the  different  actions 
and  proceedings  affecting  fraudulent  alienations.  We  may 
further  state  that  suits  by  creditors  form  no  exception  to 
the  rule  which  requires  that  all  the  parties  in  interest  who 
are  in  esse  shall  be  brought  into  the  case.^*' 


'  See  Moseley  v.  Moseley,  15  N.  Y.  que  trust,  against  the  personal  repre- 

334;  Allenspachv.  Wagner,  9  Col.  132  ;  sentative  of  the  trustee,  to  reach  the 

Burke  v.  Adams,  80  Mo.  504.  proceeds  of  land  sold  by  the  trustee, 

^  Burgctt  V.  Burgett,  i  Ohio  469;  S.  which  were  held  under  a  trust  for  the 

C.   13    Am.    Dec.   634;   Thompson  v.  benefit    of    creditors.      Uiefendorf    v. 

Moore,  36  Me.  47  ;  Jewell  v.  Porter,  31  Spraker,  10  N.  Y.  246. 

N.  H.  34;  Byrod's  Appeal,  31  Pa.  St.  '  Griffin  v.  Doe  d.  Stoddard,  12  Ala. 

241.  783. 

^  McCalmont  v.  Lawrence,  i  Blatchf.  "  Buford  v.  Keokuk  N.  L.  Packet  Co.. 

235.  3  Mo.  App.  I  59. 

*  See  Chapter  IlL     Morrison  v.  At-  '  Wilson  v.  Forsyth,  24  Barb.  (N.  Y.) 

well,  9  Bosw.  (N.  Y.)  503;  Powers  v.  128. 

Graydon,    10   Bosw.  (N.  Y.)    630.     A  "  Blount  v.  Costen,  47  G.i.  534. 

creditor's  bill  has  been  supported  found-  '  3  Johns.  Ch.  (N.  Y.)  555. 

ed  upon  the  judgment  claim  of  a  cestui  '"  Bowen  v.  Gent,  54  Md.  555. 


172  JOINDER    OF    COMrLAINANTS.  §    I08 

§  108.  Joinder  of  complainants. — Let  us  first  notice  the 
authorities  relating  to  the  joinder  of  complainants  in  the  vari- 
ous forms  of  actions  instituted  by  creditors.  Parties  who 
are  creditors  by  several  judgments  may,  as  a  general  rule, 
join  as  complainants  in  an  action  to  reach  property  fraudu- 
lently alienated  by  a  debtor.^  In  Robbins  v.  Sand  Creek 
Turnpike  Co.,^  the  court  quoted  the  following  language 
approvingly:  "Several  persons  having  a  common  interest 
arising  out  of  the  same  transaction  or  subject  of  litigation, 
though  their  interests  be  separate,  may  join  in  one  suit  for 
equitable  relief,  provided  their  interests  be  not  adverse  or 

conflicting And  several  judgment-creditors,  holding 

different  judgments,  may  unite  in  filing  a  creditors'  bill  to 
reach  the  equitable  interests  and  choses  in  action  of  the 
debtor,  or  to  obtain  the  aid  of  the  court  to  enforce  their 
liens  at  law."  And  in  Powell  v.  Spaulding^  the  doctrine  is 
laid  down  to  the  effect  that  "  where  there  is  unity  in  inter- 
est, as  to  the  object  to  be  obtained  by  the  bill,  the  parties 
seeking  redress  in  chancery  may  join  in  the  same  complaint 
and  maintain  their  action  toofether."^     In   Brinkerhoff  v. 


'  Buckingham  v.  Walker,  51  Miss.  Y.)  288.  Compare  Carroll  v.  Aldrich, 
494;  Butler  V.  Spann,  27  Miss.  234;  17  Vt.  569.  The  court  decided,  in  El- 
Sage  V.  Mosher,  28  Barb.  (N.  Y.)  287 ;  more  v.  Spear,  27  Ga.  196,  that  where 
Snodgrass  v.  Andrews,  30  Miss.  472 ;  a  creditor  proposed  to  reach  legal  as 
North  V.  Bradway,  9  Minn.  183  ;  Dewey  distinguished  from  equitable  assets,  the 
V.  Moyer,  72  N.  Y.  74 ;  Simar  v.  Cana-  suit  technically  was  not  a  creditors' 
day,  53  N.  Y.  305  ;  Bauknight  v.  Sloan,  bill.  Hence  a  single  creditor  was  held 
17  Fla.  286;  Ballentine  v.  Beall,  4  111.  to  be  entitled  to  institute  a  suit  to  reach 
203  ;  White's  Bank  of  Buffalo  v.  Farth-  legal  assets,  and  if  he  thereby  gained  a 
ing,  9  Civ.  Pro.  (N.  Y.)  64;  S.  C.  loi  priority  over  other  creditors  it  was  said 
N.  Y.  344  ;  Higby  v.  Ayres,  14  Kans.  he  could  retain  this  advantage,  and  was 
331  ;  Chapman  v.  Banker  &  Tradesman  not  forced  to  divide  with  the  others,  but 
Pub.  Co.,  128  Mass.  478;  Gates  v.  was  entitled  to  the  control  of  his  own 
Boomer,  17  Wis.  455  ;  Wall  v.  Fairley,  case,  and  could  not  be  required  to  make 
73  N.  C.  464;  Reed  v.  Stryker,  4  Abb.  other  creditors  parties  to  his  bill.  See 
App.  Dec.  (N.  Y.)  26  ;  Murray  v.  Hay,  §§  54,  55. 

I  Barb.  Ch.  (N.  Y.)  59.     But  compare  **  34  Ind.  461.    See  Bank  of  Rome  v. 

Yeaton  v.  Lenox,  8  Pet.  123;  Seaverv.  Haselton,  15  B.  J.  Lea  (Tenn.)  216. 

Bigelows,    5    Wall.    208.     Judgment-  ^  3  Greene  (Iowa)  443,  461. 

creditors  cannot  thus  unite  in  an  action  •*  See  Strong  v.  Taylor  School  Town- 

at  law.     Sage  v.  Mosher,  28  Barb.  (N.  ship,  79  Ind.  208.   In  Hamlin  v.  Wright, 


§    I08  JOINDER    OF    COMPLAINANTS. 


/  O 


Brown, ^  Chancellor  Kent  ruled  that  different  creditors 
might  unite  in  one  bill,  the  object  of  which  was  to  set  aside 
a  fraudulent  conveyance  of  their  common  debtor.  It  was 
so  held  also  in  McDermutt  v.  Strong,^  Edmeston  v.  Lyde,^ 
Conro  V.  Port  Henry  Iron  Co.,"*  Wall  v.  Fairley,^  and  Me- 
bane  v.  Layton.*'  And  where  a  defendant  in  two  separate 
bills,  brought  by  different  judgment-creditors  to  reach 
the  same  land,  files  one  answer  to  both  bills,  it  seems  that 
he  thereby  virtually  consolidates  the  suits,  and  they  may  be 
heard  together  as  one  cause,  or  as  two  causes  under  one 
style,  without  entering  any  specific  order  of  consolidation.^ 
In  one  case  a  sheriff  and  the  judgment-creditor  under  whose 
execution  a  levy  had  been  made  were  allowed  to  join  in  a 
creditors'  bill.®  Each  it  was  said  had  an  interest  in  prevent- 
ing a  multiplicity  of  suits,  and  in  closing  the  matter  in  a 
single  controversy  ;  their  interests  were  in  harmony,  and  in 
no  respect  conflicting,  and  hence  of  such  character  as  entitled 
them  to  unite  in  the  suit.^  There  is,  however,  no  obliiration 
upon  judgment-creditors  to  join.^*^  Creditors  by  judgment 
and  by  decree  may  unite  in  one  suit,"  but  judgment  credit- 
ors and  simple  contract  creditors  cannot  join.^'^ 

Where  one  party  is  a  creditor  by  judgment  and  another 
by  decree,  both  having  acquired  liens  upon  the  propert)'  of 
their  debtor  which  entitle  them  to  similar  relief  against  an 
act  of  the  defendant,  which  is  a  common  injury,  they  may 
join  in  a  bill.^^     The  general  theory  upon  which  creditors 

23  Wis.  494,  the  court  observe   that         ^  86  N.  C.  571. 

"  different  judgment-creditors  may  join         "  Rodgers  v.  Dibrell,  6  Lea  (Tenn.) 

in  one  suit  against  the  judgment-debtor  69. 

and  his  fraudulent  grantees,  though  the         "Adams  v.  Davidson,  10  N.  Y.  309. 

interests  of  the  latter  are  separate  and  315.     See  §81. 

distinct,  and  were  not  acquired  at  the         "  Compare  Bates  v.  Plonsky,  28  Hun 

same  time.     The  object  of  such  a  suit  (N.  Y.)  112. 

is  to  reach  the  property  of  the  debtor."         '°  White's  Bank  of  BufTalo  v.  Farlli- 

'  6  Johns.  Ch.  (N.  Y.)  139.  ing,  9  Civ.  Pro.  (N.  Y.)  64. 

^  4  Johns.  Ch.  (N.  Y.)  687.  "  Brown  v.  Bates.  10  Ala.  432. 

•"•  I  Paige  (N,  Y.)  637.  '*  Bauknight  v.  Sloan,  17  Fla.  284. 

■*  12  Barb.  (N.  Y.)  27.  '^  Clarkson  v.   De    Peyster,   3  Paige 

»  73  N.  C.  464.  (N.  Y.)  320. 


174 


JOINDER    OF    COMrLAINANTS.  §    Io8 


arc  permitted  to  unite  as  complainants  is  that  they  are  seek- 
ing payment  of  their  judgments  out  of  a  common  fund, 
viz.,  the  property  of  the  debtor;  his  fraudulent  conduct 
with  reference  to  his  assets  affects  them  all,  and  is  the  sub- 
ject-matter of  investigation.  A  receiver  is  often  appointed 
to  reach  and  take  possession  of  equitable  interests  or  prop- 
erty fraudulently  alienated,  and  as  he  can  act  equally  well 
for  the  different  creditors,  the  expense,  delay,  and  confusion 
incident  to  conducting  different  suits  are  avoided.^  A  judg- 
ment-creditor of  a  firm  who  is  also  a  judgment-creditor  of 
one  of  the  members  of  the  firm  may  sue  on  both  judgments 
to  overturn  an  assignment.^ 

Obviously,  hostile  claimants  cannot  join  in  any  form  of 
action,"^  and  a  bill  is  demurrable  where  it  appears  that  one 
of  the  complainants  has  no  standing  in  court,  or  antago- 
nistic causes  of  action  are  set  forth,  or  the  relief  for  which 
the  complainants  respectively  pray  in  regard  to  a  portion  of 
the  property  sought  to  be  reached,  involves  totally  distinct 


1  See  Gates  v.  Boomer,  17  Wis.  455  ;  in  an  action  brouglit  for  the  purpose  of 

Hamlin  v.  Wright,  23  Wis.  491  ;  Ruff-  declaring  it  void,  and  setting  it  aside 

ing  V.  Tilton,  12  Ind.  259;  Baker  v.  because  of  a  common  fraud  practiced 

Bartol,  6  Cal.  483  ;  Pierce  v.  Milwaukee  upon  them  in  obtaining  it.     We  think 

Construction  Co.,  38  Wis.  253  ;  Dewey  it  comes  directly  within  the  principle  of 

V.  Moyer,  72  N.  Y.  74 ;  S.  C.  below,  9  the  cases  cited  by  appellant's  counsel, 

Hun  (N.  Y.)  476;  Higby  v.  Ayres,  14  and  although  the  plaintiffs  were  uncon- 

Kansas  331  ;  Buckingham  v.  Walker,  nected  parties  with  respect  to  the  in- 

51  Miss.  494.     In  Smith  v.  Schulting,  debtedness  to  them,  they  may  join  in  the 

14  Hun  (N.  Y.)  54,  the  court  say  :  "The  suit  because  there  was  one  connected 

principal  issue  presented  by  this  com-  interest  among  them  all  centering  in 

plaint  is  the  invalidity  of  the  alleged  re-  the  principal  point  in  issue."     Citing 

lease.   It  is  manifest  by  the  admissions  Binks  v.  Rokeby,  2  Madd.  234;  Ward 

of  the  complaint  itself,  that  unless  the  v.  Northumberland,  2  Anstr.  469,  477  ; 

release  be  set  aside  there  can  be  no  re-  Whaley  v.  Dawson,  2  Sch.  &  Lef.  370. 
covery  of  the  indebtedness  to  the  several        ^Genesee  County  Bank  v.  Bank  of 

firms.     They  have  a  common  interest,  Batavia,  43  Hun  (N.  Y.)  295. 
therefore,  in  this  principal  issue,  and         ^  See    Hubbell   v.    Lerch,  58  N.  Y. 

inasmuch  as  the  release  is,  or  under  237 ;  St.  John  v.  Pierce,  22  Barb.  (N. 

the  allegations  of  the  complaint  must  Y.)  362,  afii'd  in  Court  of  Appeals,  4 

be  assumed  to  be,  a  joint  one,  obtained  Abb.  App.  Dec.  (N.  Y.)  140;  Sedg.  & 

by  a  common  fraud,  there  is  no  reason  Wait  on  Trial  of  Title  to  Land,  2d  ed., 

why  all  the  parties  to  it  may  not  unite  §  188. 


§  I09         SUING  ON  BEHALF  OF  OTHERS.  175 

questions  requiring  different  evidence  and  leading  to  differ- 
ent decrees.^ 

§  109.  Suing  on  behalf  of  others. — Mr,  Pomeroy  says  : '^ 
"  One  creditor  may  sue  on  behalf  of  all  the  other  creditors 
in  an  action  to  enforce  the  terms  of  an  assignment  in  trust 
for  the  benefit  of  creditors,  to  obtain  an  accounting  and 
settlement  from  the  assignee,  and  other  like  relief ;  also,  in 
an  action  to  set  aside  such  an  assignment  on  the  ground 
that  it  is  illegal  and  void  ;  and  also  one  judgment-creditor 
may  sue  on  behalf  of  all  other  similar  creditors  in  an  action 
to  reach  the  equitable  assets,  and  to  set  aside  the  fraudulent 
transfers  of  the  debtor.  In  all  these  classes  of  cases  the 
creditors  have  a  common  interest  in  the  questions  to  be 
determined  b}^  the  controversy."  '^  The  complainant  may  sue 
alone  or  with  other  judgment-creditors.^  It  is  remarked 
by  Nelson,  J.,  in  Myers  v.  Fenn,^  that  "the  practice  of 
permitting  judgment-creditors  to  come  in  and  make  them- 
selves parties  to  the  bill,  and  thereby  obtain  the  benefit, 
assuming  at  the  same  time  their  portion  of  the  costs  and 
expenses  of  the  litigation,  is  well  settled"/'  but  this  inten- 
tion must  be  manifested  by  suitable  averments  in  tiie  bill  ;^ 
and  if,  after  a  finding  of  a  court  annulling  a  fraudulent 


'  Walker  v.  Powers,  104  U.  S.  245.  (N.  Y.)  42 ;  Brooks  v.  Peck,  38  Barb. 

Compare  Emans  v.  Emans,   14  N.  J.  (N.  Y.)  519;  Innes  v.  Lansing,  7  Paige 

Eq.  1 14 ;  Sawyer  v.  Noble,  55  Me.  227.  (N.  Y.)  583  ;  Conro  v.  Port  Henrj'  Iron 

The  creditor  may  proceed  by  ancillary  Co.,  12  Barb.  (N.  Y.)  59  ;  Hammond  v. 

proceedings  in  any  other  court  of  con-  Hudson  River  I.  &  M.   Co.,  20  Barb. 

current  jurisdiction  with  the  court  ren-  (N.  Y.)   378;    Chewett  v.    Moran,    17 

dering  the  judgment,  to  remove  clouds  Fed.  Rep.  820;    Ponsford  v.    Hartley, 

from  the  titles  of  any  property  which  is  2  Johns.  &  H.  736;  Bailentine  v.  Beall. 

deemed  to  be  subject  to  the  lien  of  the  4  111.  203  ;  Terry  v.  Calnan,  4.S.  C.  508. 

judgment.     Each  judgment   makes  a  •*  Marsh  v.  Burroughs,  i  Woods  467, 

separate    cause    of    action.     Scottish-  and  cases  cited. 

American  Mortgage  Co.  v.  Follansbee,  '  5  Wall.  207. 

14  Fed.  Rep.  125.  *  Compare  Strike  v.  McDonald,  2  H. 

*  Pomeroy's  Remedies  &  Remedial  &  G.   (Md.)  192;  Shand  v.  Hanley,  71 

Rights,  §  394.     See  Pfohl  v.  Simpson,  N.  Y.  324;  Barry  v.  Abbot,  100  Mass. 

74  N.  Y.  137.  396  ;  Neely  v.  Jones,  16  W.  Va.  625. 

''  See  Greene  v.  Breck,   10  Abb.  Pr.  '  Burt  v.  Keyes,  i  Flipp.  72. 


176  "AND    OTHERS."  §    IIO 

preference,  other  creditors  seek  to  come  in  as  co-com- 
plainants, they  may  be  allowed  to  do  so,  but  their  demands 
will  be  postponed  in  favor  of  the  original  complainant.^ 

Stockholders  may  sue  in  the  right  of  the  corporation 
where  the  latter  refuses  to  proceed  ;  ^  but  where  there  is 
unreasonable  delay  in  bringing  the  suit,  the  cause  of  action 
may  be  defeated  by  the  application  of  the  doctrine  of  equit- 
able estoppel.'^  "  Where  one  incurs  expense  in  rescuing: 
property  belonging  to  many,  a  court  of  equity  has  power 
unquestionably  to  direct  that  the  expenses  so  incurred  shall 
be  paid  from  the  common  fund."^ 

§  no.  "And  others." — It  is  a  mistake  to  suppose  that 
the  statute  of  Elizabeth  only  avoids  deeds  and  conveyances 
coming  within  its  exact  provisions  as  to  creditors.  The 
statute  is  much  broader  in  its  operation.^  It  enacts  that 
every  conveyance  made  to  the  end  purpose  and  intent  to 
delay,  hinder,  or  defraud  creditors  and  others  of  their  just 
and  lawful  actions,  etc.,  shall  be  void.  "  It  extends  not 
only  to  creditors,  but  to  all  others  who  have  cause  of  action 
or  suit,  or  any  penalty  or  forfeiture";  and,  as  we  shall  see, 
embraces  claims  for  slander,  trespass,  and  other  torts.''  The 
claimant  may  not  come  within  a  sharply  defined  meaning 
of  the  word  "creditor,"  but  he  may  maintain  his  standing 
"in  the  equity  of  creditors."'  So  in  Feigley  v.  Feigley,^ 
the  court  say :  "  The  statute  seems  to  design  to  embrace 
others  than   those   who  are   strictly  and  technically  cred- 


'  Smith  V.  Craft,  11  Biss.  340.  '  Gebhart  v.   Merfeld,   51    Md.   325. 

■-Taylor  v.  Holmes,  127  U.  S.  492;  See   Cooke,   Garn.  v.  Cooke,  43  Md. 

Hawes  v.   Oakland,    104   U.    S.  450 ;  523 ;  Sexton  v.  Wheaton,  i  Am.  Lea. 

Greaves  v.  Gouge,  69  N.  Y.  157  ;  Wait  Gas.  42,  notes;  Jackson  v.  Myers,  18 

on  Insolvent  Corps.  §  74.  Johns.  (N.  Y.)  425  ;  Lillard  v.  McGee, 

3  Sheldon  Hat  Blocking  Co.  v.  Eicke-  4  Bibb  (Ky.)  165  ;  Lowry  v.  Pinson,  2 

meyer  Hat  Blocking  Machine  Co.,  90  Bailey's  (S.  C.)  Law  324,  328,  and  other 

N.  Y.  607.  cases  there  cited. 

•*Merwin  v.   Richardson,    52  Conn.  '  Shontz  v.  Brown,  27  Pa.  St.  131. 

223,  237.  '  7  Md.  561. 

=^See§i6. 


§   I  I  I  SURETY, 


/  / 


itors  ;  and  if,  under  such  a  comprehensive  clause  as  '  cred- 
itors and  others,'  a  wife,  who  has  been  made  the  victim  of 
her  husband's  fraud,  is  not  to  be  included,  we  are  at  a  loss 
to  ascertain  to  whom  else  it  was  designed  to  relate."^ 
Then  the  principle  that  a  voluntary  post-nuptial  settlement 
made  by  a  person  indebted  \s  prima  facie  fraudulent,  as  to 
creditors,  applies  as  well  in  behalf  of  the  representatives  of 
a  deceased  partner  as  of  general  creditors  ;  ^  and  a  partner 
who  liquidates  firm  judgments  stands  in  the  position  of  a 
creditor  with  regard  to  fraudulent  alienations  of  his  co- 
partner/^ 

§  III.  Surety. — ^Sureties  on  an  appeal  bond  may  be  sub- 
rogated to  the  rights  of  the  judgment-creditor,  to  bring  a 
creditor's  action  to  set  aside  fraudulent  deeds,'*  even  though 
the  principal  informed  the  sureties  of  the  fraud  before  they 
became  bound. ^  Sureties  may  enforce  their  rights  in  the 
creditor's  name  if  their  interests  require  it,®  for  "  a  surety 
who  pays  a  debt  for  his  principal  is  entitled  to  be  put  in 
the  place  of  the  creditor,  and  to  all  the  means  which  the 
creditor  possessed  to  enforce  payment  against  the  principal 
debtor."  ~     It  may  be  here  recalled  that  a  surety  is  a  cred- 

'  See  Welde  v.  Scotten,  59  Md.  72.  was  of  the  others  whose  just  and  law- 

Conveyancc  to   defeat  alimony .—^n  ful  actions,  suits,  and  reliefs  would  be 

Bailey  v.  Bailey,  61  Me.  363,  the  court  delayed,  hindered,  or  defeated  by  such 

very  properly  ruled   that  if  an  estate  conveyance."     See  Green  v.    Adams, 

was  conveyed  to  prevent  the  enforce-  59  Vt.  602  ;   Foster  v.  Foster,  56  Vt. 

ment  of  a  decree  awarding  alimony,  or  546;    Burrows  v.    Purple,    107    Mass. 

other  proper  aid,  such  conveyance  was  428  ;  Morrison  v.  Morrison,  49  N.  H.  69. 

fraudulent  as  to  the  wife  and  might  be  -  Alston  v.  Rowles,  13  Fla.  iiS. 

avoided.     It  was  contended  on  the  part  ^  Swan  v.  Smith,  57  Miss.  548. 

of  the   husband   that  a  person  in  the  ^  See  Lewis  v.  Palmer.  2S  N.  Y.  271  ; 

situation  of  the  wife  could  not  be  re-  Hinckley  v.  Kreitz,  58  N.  Y.  590. 

garded   as   a   creditor   so  as  to  come  ■'  Martin  v.  Walker.  12  Hun  (N.  Y.) 

within  the  statutes  of  Elizabeth  relat-  53. 

ing  to   fraudulent    conveyances.     The  *  Townsend  v.   Whitney,  75   N.  Y. 

court  decided,  however,  that  the  statute  425  ;  atifi'g  15  Hun  (N.  Y.)  93.     Com- 

covered  creditors  and  others,  and  cited  pare  Cuyler  v.  Ensworth.  6  Paige  (N. 

Livermore  V.  Bouteile,  11  Gray  (Mass.)  Y.)  32;    Speiglemyer  v.    Crawford,   6 

217,  a  similar  case,  in  which  the  court  Paige  (N.  Y.)  254. 

said:  "  If  she  was  not  a  creditor  she  '  Lewis  v.  Palmer.  28  N.  Y.  271. 
12 


178  EXECUTORS    AND    ADMINISTRATORS.  §    112 

iter  of  the  principal  obligor,  and  of  his  co-sureties  from  the 
time  the  obligation  is  entered  into,^  and  that  a  conveyance 
by  a  surety  for  inadequate  consideration  to  defeat  a  con- 
templated liability  for  contribution  to  a  co-surety  will  be  set 
aside.^  A  person  who  pays  a  debt  as  security  for  a  firm  be- 
comes a  creditor  of  the  firm  and  is  not  entitled  to  any 
greater  rights  than  simple  contract  creditors.^ 

§  112.  Executors  and  administrators. — Ordinarily  an  ex- 
ecutor or  administrator  will  not  be  allowed  to  impeach  the 
fraudulent  conve3^ance  of  his  testator  or  intestate.  Like 
the  heirs  he  is  bound  by  the  acts  of  the  deceased."*  "As  a 
party  to  a  fraudulent  conveyance  cannot  allege  its  illegal- 
ity, with  a  view  to  its  avoidance,  so  neither  can  his  heirs 
nor  representatives,  coming  in  as  volunteers,  and  standing, 
as  it  were,  in  his  shoes.  "  ^  This  language  is  employed  in 
Rhode  Island :  "  If  the  deceased  has  conveyed  his  estates 
away  in  fraud  of  his  creditors,  the  creditors  who  have  been 
defrauded  are  the  proper  parties  to  prosecute  the  remedy."  ^ 
Statutory  changes  supported  by  the  tendency  of  the  courts 

'  Pennington  v.  Seal,  49  Miss.  525  ;  190;  Loomis  v.  Tifft,  16  Barb.  (N.  Y.) 

Williams  v.  Banks,  1 1  Md.  242  ;  Sex-  545  ;   Van  Wickle   v.   Calvin,   23   La. 

ton  V.  Wheaton,  i  Am.  Lea.  Cas.  37  ;  Ann.  205  ;    Choteau   v.  Jones,  1 1   111. 

Rider  v.    Kidder,   10  Ves.   360.      See  319;  Snodgrass  v.  Andrews,  30  Miss. 

§  90.  472 ;    Peaslee   v.   Barney,   i   D.    Chip. 

^  Pashby  v.  Mandigo,  42  Mich.  172.  (Vt.)    331  ;    Hawes   v.    Loader,   Yelv. 

^  McConnel  v.  Dickson,   43  111.  99.  196;  Livingston  v.  Livingston,  3  Johns. 

Chief-Justice  Thurman  said,  in  a  case  Ch.  (N.  Y.)  148;  Estes  v.  Howland,  15 

in    Ohio:   "A    surety   against   whom  R.  I.  128;  Burton  v.  Farinholt,  86  N. 

judgment    has    been    rendered,    may,  C.  260. 

without  making  payment  himself,  pro-  '  McLaughlin  v.  McLaughlin,  16  Mo. 

ceed,  in  equity,  against  his  principal,  to  242.     See   Hall   v.    Callahan,   66   Mo. 

subject  the  estate  of  the  latter  to  the  316  ;    Beebe   v.    Saulter,   87    111.   518  ; 

payment  of  the  debt."     Hale  v.  Wet-  Crawford  v.  Lehr,  20  Kans.  509 ;  Rhem 

more,  4  Ohio  St.  600.     See  McConnell  v.  Tull,  13  Ired.  Law  (N.  C.)  57.     It 

V.  Scott,  15  Ohio  401  ;  Horsey  v.  Heath,  has  been  held   in   New  York,  that  a 

5  Ohio  354  ;  Stump  v.  Rogers,  i  Ohio  surrogate  had  no  jurisdiction  to  deter- 

533.  mine  the  validity  of  such  a  transfer. 

^  Blake  v.  Blake,  53  Miss.  193;  Merry  Richardson  v.   Root,  19  Hun  (N.  Y.) 

v.  Fremon,  44  Mo.  522  ;  ZoU  v.  Soper,  473  ;  Barton  v.  Hosner,  24  Hun  (N.  Y.) 

75  Mo.  462  ;  Davis  v.  Swanson,  54  Ala.  468. 

277;   George  v.  Williamson,  26   Mo.  ^  Estes  v.  Howland,  15  R.  I.  129. 


§112  EXECUTORS    AND    ADMINISTRATORS.  I  79 

to  prevent  the  confusion  incident  to  splitting  up  tiie  admin- 
istration of  estates  between  creditors  and  personal  repre- 
sentatives, have  led  to  the  general  establishment  of  the 
practice  of  permitting  and  imposing  the  duty  upon  execu- 
tors and  administrators  to  sue  for  property  fraudulently 
alienated  by  the  deceased  in  his  lifetime.^  Thus  in  New 
York,  executors  and  administrators,  who  could  not  for- 
merly effectually  impeach  the  conveyances  of  the  deceased 
on  the  ground  of  fraud  against  creditors,  are  now  enabled 
to  do  so  by  statute.^  This  new  remedy,  however,  is  not 
exclusive.  In  that  State,  if  the  personal  representative  is 
in  collusion  with  the  fraudulent  vendee,  the  creditors  may 
bring  an  action  against  the  personal  representative  and 
vendee  to  have  the  covinous  transfer  set  aside,  and  the 
property  applied  as  assets.^  And  in  Wisconsin  the  cred- 
itor may  in  a  proper  case  compel  the  executor  or  adminis- 
trator to  bring  the  action,  or  bring  it  himself.^  In  Penn- 
sylvania it  is  said  that  the  administrator's  intervention 
would  not  seem  to  be  necessary  if  the  creditors  prefer  to 
proceed  for  themselves.^  But  it  seems  in  such  a  case,  in 
New  York,  that  the  creditor  must  ordinarily  first  exhaust 


'  See  Martin  v.  Root,  17  Mass.  222;  524;  Sullice  v.  Gradenigo,  15  La.  Ann. 

Welsh  V.  Welsh,  105  Mass.  229;  Gib-  582;  note  to  Hudnal  v.  Wilder,  17  Am. 

son  V.  Crehore,  5  Pick.  (Mass.)   154;  Dec.  744 ;  s.  c.  4  McCord's  (S.  C.)  Law 

Hills  V.  Sherwood,  48  Cal.  392;  Mc-  294;  Bassett  v.  McKenna,  52  Conn.  437. 

Knight   V.    Morgan,   2    Barb.   (N.  Y.)  '•'  Moseley  v.  Moseley,  15  N.  Y.  336; 

171  ;   Morris  v.  Morris,  5  Mich.  171;  Bate  v.  Graham,  11  N.  Y.  237;  Barton 

McLane  v.  Johnson,  43  Vt.  48  ;  Parker  v.  Hosner,  24  Hun  (N.  Y.)  469  ;  Bryant 

V.  Flagg,  127  Mass.  30;  Bouslough  v.  v.  Bryant,  2  Rob.  (N.  Y.)  612;  South- 

Bouslough,  68  Pa.  St.  495  ;  Bushnell  v.  ard  v.  Benner,  72  N.  Y.  427  ;  McKnight 

Bushnell,  88  Ind.  403  ;  Cross  v.  Brown,  v.  Morgan,  2  Barb.  (N.  Y.)  171  ;  Lore 

51  N.  H.  486;  also  note  to  Ewing  v.  v.  Dierkes.  19  J.  &  S.  (N.  Y.)  144. 

Handley,  14  Am.  Dec.  157;  Barton  v.  ^  phelps   v.  Piatt,   50  Barb.  (N.  Y.) 

Hosner,  24  Hun  (N.  Y.)  468  ;  Johnson  430 ;  Sharpe  v.  Freeman,  45  N.  Y.  802  ; 

V.  Jones,  79  Ind.  141 ;  Holland  v.  Cruft,  Bate  v.  Graham,  1 1  N.  Y.  237  ;  Barton 

20  Pick.  (Mass.)  321 ;  Martin  v.  Bolton,  v.  Hosner,  24  Hun  (N.  Y.)  468.     St-e 

75  Ind.  295;  German  Bank  v.  Leyser,  §§114  and  115. 

50  Wis.  258  ;  Garner  v.  Graves,  54  Ind.  ■»  German  Bank  v.  Leyser,   50  Wis. 

188;  Forde  V.  Exempt  Fire  Co.,  50  Cal.  258. 

299 ;  Norton  v.  Norton,  5  Cush.  (Mass.)  '"  Appeal  of  Fowler,  87  Pa.  St.  454. 


l8o  EXECUTORS    AND    ADMINISTRATORS.  §°'lI2 

his  legal  remedies,  and  reduce  his  claim  to  judgment ;'  and 
in  Wisconsin  the  insufficiency  of  the  estate  to  pay  debts 
must  first  be  ascertained  by  the  county  court.'  This  pre- 
requisite, as  already  shovvn,^  is  not  universally  conceded  to 
be  essential.  The  Supreme  Court  of  the  United  States 
asserts,  in  a  comparatively  recent  case  (1879),*  ^^at  the  au- 
thorities are  abundant  and  well  settled,  that  a  creditor  of  a 
deceased  person  has  a  right  to  go  into  a  court  of  equity  for 
the  discovery  of  assets,  and  to  secure  the  payment  of  the 
debt ;  and  the  creditor,  when  there,  would  not  be  turned 
back  to  a  court  of  law  to  establish  his  debt.  The  court 
being  in  rightful  possession  of  the  cause  for  a  discovery 
and  account,  will  proceed  to  a  final  decree  upon  all  the 
merits.^  So  debts  which  are  made  by  statute  a  lien  upon 
lands  of  a  deceased  debtor,  will  furnish  a  creditor  at  large, 
the  correctness  of  whose  claim  is  acknowledged  by  the  ex- 
ecutor, a  standing  in  court  to  file  a  creditors'  bill  to  set 
aside  conveyances  alleged  to  have  been  made  by  the  testa- 
tor in  fraud  of  creditors.^ 

The  creditors'  bill  in  Kennedy  v.  Creswell,"^  was  filed 
against  an  executor  and  devisees,  and  alleged  that  the  com- 
plainant held  the  testator's  notes  for  $12,000;  and  recited 
that  the  personal  assets  were  insufficient  to  meet  the  debts, 
and  that  the  executor  was  paying  some  of  the  claims  in 
full,  and  leaving  others  unsatisfied.  The  creditors  prayed 
for  an  accounting  of  the  personal  estate,  a  discovery  of  the 
real  estate,  and  an  applicat'on  of  all  the  property  to  the 
payment  of  the  debts.  A  plea  was  interposed  setting  forth 
that  the  executor  had  assets  sufficient  to  pay  the  complain- 


'  Estes  V.   Wilcox,   67   N.  Y.   264.  ^  §  79- 

Contra,  Johnson  v.  Jones,  79  Ind.  141  ;  **  Kennedy    v.    Cresvvell,    loi   U.  S. 

Appeal   of    Fowler,    87    Pa.    St.   449 ;  645. 

Shurts  V.  Howell,  30  N.  J.  Eq.  418  ;  ^  Thompson  v.  Brown,  4  Johns.  Ch. 

Spencer    v.     Armstrong,     12     Heisk.  (N.  Y.)  619.     See  §  79. 

(Tenn.)  707 ;  Offutt  v.  King,  i  MacAr.  «  Haston   v.  Castner,  31   N.  J.  Eq. 

.  (D  C.)  314.     See  §  79,  supra.  697,  and  cases  cited.     See  §  87. 

^German  Bank  V.  Leyser,5o  Wis.  258.  ''  loi  U.  S.  641. 


§113  EXECUTORS    AND    ADMINISTRATORS.  iSl 

ant  and  all  other  creditors.  A  replication  was  filed  and 
proofs  taken,  which  sustained  the  allegations  of  the  bill, 
and  demonstrated  the  falsity  of  the  plea.  The  court  de- 
cided that  the  complainant  was  entitled  to  a  decree  pro 
confesso^  and  the  defendant  could  not  claim  the  right  to 
answer  after  interposing  a  false  plea  ;  that  the  admission 
of  the  executor  that  he  had  assets,  could  "  be  taken  against 
him  for  the  purpose  of  charging  him  with  a  liability,"  but 
it  could  not  "  serve  him  as  evidence  to  prove  the  truth  of 
his  plea." 

§  113.  —  The  personal  representative  may  render  himself 
individually  liable  to  creditors  for  a  failure  to  recover  prop- 
erty fraudulently  alienated  by  the  testator  or  intestate,* 
and  he  should  include  such  property  in  the.  inventory,^ 
unless,  of  course,  he  has  no  knowledge  of  it.^  The  per- 
sonal representative,  as  he  stands  for  creditors  when  so  act- 
ing, can  only  attack  fraudulent  transfers  in  cases  where  the 
estate  is  insolvent,^  and  with  a  view  to  recover  a  sum  suffi- 
cient to  satisfy  the  creditors.  The  complaint  should  allege 
that  the  action  is  instituted  for  the  benefit  of  creditors.*^ 
The  legislation  clothing  personal  representatives  with  the 
power  to  appeal  to  the  courts  to  annul  covinous  alienations 
made  by  the  deceased,  is  highly  salutary  in  practice.  The 
concurrent  right  of  the  creditor  to  seek  redress  is  also  of 
the  utmost  importance,  for  the  personal  representative  is 
usually  selected  by,  or  is  a  near  relative  of,  the  deceased, 


'  See  Dows  v.  McMichael,  2  Paige  right  to  the  lands  of  his  intestate  as 

(N.  Y.)  345.  will  enable  him  to  maintain  a  bill  in 

'  Lee  V.  Chase,  58  Me.  436;  Cross  v.  equity  for  the  cancellation  of  a  convey- 

Brown,  51  N.  H.488 ;  Danzey  v.  Smith,  ance  of  the  lands  obtained  by  fraud, 

4  Texas  41 1.  provided   the  heirs  are  made  parties. 

'  Minor    v.    Mead,    3    Conn.    289 ;  Waddcll  v.  Lanier,  62  Ala.  347. 

Bourne  V.Stevenson,  58  Me.  504;  Booth  '  Hess  v.  Hess,  19  Ind.  238  ;  Pringle 

V.  Patrick,  8  Conn.    106;  Andruss  v.  v.    Pringle,   59   Pa.    St.    281;  Wall   v. 

Doolittle,  II  Conn.  283.  Provident  Inst.,  3  Allen  (Mass.)  96. 

''  Booth  V.  Patrick,  8  Conn.  ic6.     In  '■  Crocker  v.  Craig,  46  Me.  327. 
Alabama  an  administrator  has  such  a 


l82  ASSIGNEE    IN    BANKRUPTCY.  ^    I  I4 

and  may,  in  some  cases,  be  prompted  by  motives  of  friend- 
ship or  self-interest  to  shield  the  parties  who  have  depleted 
the  estate  ;  and,  in  some  instances,  is  himself  the  fraudu- 
lent alienee.  Where  the  personal  representatives  sue,  a 
multiplicity  of  suits  is  prevented  in  cases  where  the  cred- 
itors are  numerous,  and  the  necessity  of  a  judgment  or 
execution  is  avoided,^  features  important  to  the  body  of 
creditors.^ 

§  114.  Assignee  in  bankruptcy.— An  assignee  in  bank- 
ruptcy, under  the  late  bankrupt  act,  represented  the  whole 
body  of  creditors,  and  could  in  their  behalf  impeach,  as 
fraudulent,  a  conveyance  of  property  by  the  bankrupt, 
whenever  the  creditors  might,  by  any  process,  acquire  the 
right  to  contest  its  validity.  This  rule  is  of  quite  general 
application.^  It  is  said,  however,  in  the  New  York  Court 
of  Appeals,^  that,  "  if  the  assignee  should  refuse  or  neglect 
to  sue  for  and  reclaim  property  fraudulently  transferred,  it 
is  abundantly  established  that  the  creditors  may  commence 
an  action  to  reach  the  property,  making  the  assignee,  the 
debtor,  and  his  transferees  parties  defendant.  And,  in  such 
an  action,  the  property  will  be  administered  directly  for  the 
benefit  of  the  creditors."^     It  is  believed,  however,  that  it 


'  Barton  v.  Hosner,  24  Hun  (N.  Y.)  Day  v.  Cooley,  118  Mass.  527;  Wads- 

471.  worth  V.Williams,  100  Mass.  126.  The 

■  Fletcher  v.  Holmes,  40  Me.  364.  adjudication    exempted     the    debtor's 

^  Southard  v.  Benner,  72  N.  Y.  427  ;  property  from    attachment.     Williams 

Piatt  V.  Mead,  7  Fed.  Rep.  95  ;  Butcher  v.  Merritt,  103  Mass.  184.     As  to  when 

V.   Harrison,   4   Barn.    &    Adol.    129;  an  assignee  in  bankruptcy  cannot  over- 

Brackett  v.  Harvey,   25   Hun  (N.  Y.)  turn  a  fraudulent  conveyance,  see  War- 

503;    Nicholas  v.    Murray,   5    Sawyer  ren  v.  Moody,  122  U.  S.  132. 

320 ;  Trimble  v.  Woodhead,  102  U.  S.  *  Dewey  v.  Moyer,  72  N.  Y.  78. 

647 ;  Bates  v.  Bradley,  24  Hun  (N.  Y.)  ^  Citing  Sands  v.  Codwise,  2  Johns. 

84 ;  Doe  d.  Grimsby  v.  Ball,  1 1  M.  &  (N.  Y.)  487  ;    Freeman  v.  Deming,  3 

W.  531;  Moyer  v.  Dewey,   103  U.  S.  Sandf.    Ch.   (N.   Y.)    327;    Seaman  v. 

301;  Ball  V.  Slafter,   26  Hun  (N.  Y.)  Stoughton,  3  Barb.   Ch.   (N.  Y.)  344; 

354;    Phelps   V.  McDonald,   99  U.  S.  Fort  Stanwix  Bank  v.  Leggett,  51  N. 

298  ;  Glenny  v.  Langdon,  98  U.  S.  28  ;  Y.   552;  Card  v.  Walbridge,    18  Ohio 

Shackleford   v.  Collier,  6   Bush  (Ky.)  411;    Phelps   v.    Curtis,    80    111.    109; 

149;  Badger  v.  Story,  16  N.  H.   168  ;  Francklyn  v.  Fern,  Bam.  Ch.  30;  First 


§115  GENERAL   ASSIGNEE.  1 83 

is  impossible  to  reconcile  this  doctrine  with  the  decisions 
of  the  United  States  Supreme  Court, ^  for,  according  to  the 
latter  court,  if  the  assignee  in  whom  the  right  is  vested 
neglected  to  prosecute  during  the  two  years  allowed  by  the 
act,  the  right  to  attack  the  fraudulent  transfer  would  be  ab- 
solutely gone.^  The  assignee  appointed  under  the  act  be- 
came vested  with  the  title  to  the  bankrupt's  assets  by  an 
assignment  from  the  court,  into  whose  custody  the  estate 
was,  in  theory  of  law,  intrusted.  Even  a  claim  in  favor 
of  the  bankrupt  against  a  foreign  government  passed  to 
the  assignee.'^  The  assignee  is  regarded  merely  as  a  trustee 
for  creditors.  When  his  accounts  are  passed,  and  he  is  dis- 
charged, the  property  not  disposed  of  reverts  to  the  debtor 
by  operation  of  law  without  reassignment.'* 

§  115.  General  assignee. — It  is  a  general  rule  of  law  that 
a  person  cannot,  by  any  voluntary  act  of  his  own,  transfer 
to  another  a  right  which  he  does  not  himself  possess.  A 
fraudulent  transfer  of  property  by  a  debtor,  made  with  in- 
tent to  defeat  creditors,  is,  as  we  shall  presently  show,  con- 
clusive upon  the  debtor  so  that  he  cannot  himself  reclaim 
it.  No  logical  theory  can  be  easily  framed  ui)on  which  it 
can  be  said  that  an  assignment,  wholly  voluntary  on  the 
debtor's  part,  vests  in  his  assignee  the  right  to  attack  fraud- 


Nat.  Bank  v.  Cooper,  9  N.  B.  R.  529;  ^  Phelps  v.  McDonald,  99  U.  S.  302  ; 

Boone  v.  Hall,  7   Bush  (Ky.)  66.     See  Comegys  v.  Vasse,  i  Pet.  195. 

Bank  v.  Cooper,  20  Wall.  171  ;   Sands  ■•  See   Dewey  v.  Moyer,  9   Hun  (N. 

V.  Codwise,  4  Johns.  (N.  Y.)  536;    Kid-  Y.)  480;  Colie  v.  Jamison,  4  Hun  (N. 

der  V.  Horrobin,  72  N.  Y.  164;  Bates  Y.)   284;    Page  v.  Waring.  76   N.   Y. 

V.  Bradley,  24  Hun  (N.  Y.)  84.  473,  and  cases  cited  ;   Boyd  v.  Olvey, 

'  Compare  Moyer  v.  Dewey,  103  U.  82  Ind.  294.     In  Stewart  v.  Piatt.  loi 

S.  303;  Trimble  v.  Woodhead,  102  U.  U.  S.  738,  the  court  said:  "In  Yeat- 

S.  649;  Glenny  v.  Langdon,  98  U.  S.  man  v.  Savings    Institution,  95  U.   S. 

20 ;  Lowry  v.  Coulter.  9  Pa.  St.  349 ;  764,  we  held  it  to  be  an  established 

McMaster  v.  Campbell,  41   Mich.  514;  rule  that,  'except  in  cases  of  attach- 

McCartin  v.  Perry,  39  N.  J.  Eq.  201.  ments  against  the  properly  ol  the  bank- 

■^  Compare  I5ates  v.  Bradley,  24  Hun  rupt  within  a  prescribed  lime  preceding 

(N.  Y.)  84;  Allen  v.  Montgomery,  48  the  commencement  of  proceedings  in 

Miss.  loi.  bankruptcy,  and  except  in  cases  where 


1 84 


GENERAL    ASSIGNEE. 


§1. 


Lilcnt  transfers.^  Consequently,  it  has  been  decided  tiiat 
the  right  to  impeach  or  set  aside  a  mortgage  which  is 
fraudulent  and  void  as  against  the  creditors  of  the  mort- 
gagor, did  not  pass  to  an  assignee  of  the  mortgagor,  by  a 
voluntary  general  assignment  in  trust  for  the  benefit  of 
creditors,  subsequently  executed,  and  unaffected  by  any 
statute  in  force  at  the  time.^  Still,  there  are  many  States 
in  which  an  assignment  in  insolvency  or  a  voluntary  assign- 
ment is  held  to  vest  in  the  assignee  the  right  to  avoid  a 
conveyance  made  in  fraud  of  creditors;  and  in  some  States 
the  power  is  statutory.^  Such  an  assignee  may  also  set 
aside  a  mortgage  or  other  conveyance  which  is  void  as  to 
creditors,  for  want  of  registration,  or  other  defects.*     And 


the  disposition  of  property  by  the  bank- 
rupt is  declared  by  law  to  be  fraudulent 
and  void,  the  assignee  takes  the  title 
subject  to  all  equities,  liens  or  incum- 
brances, whether  created  by  operation 
of  law  or  by  act  of  the  bankrupt,  which 
existed  against  the  property  in  the 
hands  of  the  bankrupt.'  Brown  v. 
Heathcote,  i  Atk.  i6o;  Mitchell  v. 
Winslow,  2  Story  630;  Gibson  v. 
Warden,  14  Wall.  244;  Cook  v.  Tullis, 
18  Wall.  332 ;  Donaldson  v.  Farwell, 
93  U.  S.  631  ;  Jerome  v.  McCarter,  94 
U.  S.  734.  He  takes  the  property  in 
the  same  '  plight  and  condition  '  that 
the  bankrupt  held  it.  Winsor  v.  Mc- 
Lellan,  2  Story  492." 

'  Pillsbury  v.  Kingon,  31  N.  J.  Eq. 
619 ;  Brownell  v.  Curtis,  10  Paige  (N. 
Y.)  210;  Storm  V.  Davenport,  i  Sandf. 
Ch.  (N.  Y.)  135 ;  Sere  v.  Pitot,  6 
Cranch  332  ;  Estabrook  v.  Messersmith, 
18  Wis.  545;  Browning  v.  Hart,  6 
Barb.  (N.  Y.)  91  ;  Leach  v.  Kelsey,  7 
Barb.  (N.  Y.)  466  ;  Maiders  v.  Culver's 
Assignee,  i  Duv.  (Ky.)  164;  Carr  v.Gale, 
3  Woodb.  &  M.  68  ;  Flower  v.  Cor- 
nish, 25  Minn.  473;  S.  C.  i  Am. 
Insolv.  Rep.  184;  Day  v.  Cooley,  118 
Mass.  527. 


2  Flower  V.  Cornish,  25  Minn.  473. 

^  Hallowell  v.  Bayliss,  10  Ohio  St. 
537 ;  Gibbs  v.  Thayer,  6  Cush.  (Mass.) 
30;  Blake  v.  Sawin,  10  Allen  (Mass.) 
340 ;  Freeland  v.  Freeland,  102  Mass. 
475;  Spring  V.  Short,  12  Weekly  Dig. 
(N.  Y.)  360,  affi'd  90  N.  Y.  544; 
Lynde  v.  McGregor,  13  Allen  (Mass.) 
172;  Waters  v.  Dashiell,  i  Md.  455; 
Simpson  v.  Warren,  55  Me.  18;  Ship- 
man  v.  ^tna  Ins.  Co.,  29  Conn.  245  ; 
Shirley  v.  Long,  6  Rand.  (Va.)  735 ; 
Clough  v.  Thompson,  7  Gratt.  (Va.) 
26 ;  Staton  v.  Pittman,  1 1  Gratt.  (Va.) 
99;  Doyle  V.  Peckham,  9  R.  L  21; 
Southard  v.  Benner,  72  N.  Y.  424  ;  Mc- 
Mahon  v.  Allen,  35  N.  Y.  403  ;  Mon- 
cure  V.  Hanson,  15  Pa.  St.  385  ;  Tams 
V.  Bullitt,  35  Pa.  St.  308.  See  22  Alb. 
L.  J.  60,  81  ;  Kilboume  v.  Fay,  29  Ohio 
St.  264. 

■*  Rood  V.  Welch,  28  Conn.  157; 
Hanes  v.  Tiffany,  25  Ohio  St.  549;  In 
re  Leland,  10  Blatchf.  503  ;  Barker  v. 
Smith,  12  N.  B.  R.  474.  But  see  Will- 
iams V.  Winsor,  12  R.  I.  9;  Dorsey  v. 
Smithson,  6  H.  &  J.  (Md.)  61  ;  Van 
Heusen  v.  Radcliff,  17  N.  Y.  580;  Ball 
V.  Slaflen,  98  N.  Y.  622. 


§   Il6  RECEIVERS.  185 

in  some  cases  it  is  held  that  the  assi<]:nee  mav  affirm  such 
fraudulent  conveyance,  and  thereby  estop  creditors  from 
impeaching  it.^  In  New  York  creditors  cannot  assail  a 
fraudulent  alienation  so  long  as  there  is  a  valid  assignment 
in  force.  The  right  of  attack  is  vested  by  statute  in  the 
assignee.^ 

§  116.  Receivers. — Under  the  practice  in  New  York,  and 
in  some  of  the  other  States,  the  receiver  of  a  debtor  mav 
impeach  fraudulent  transfers.^  The  appointment  confers 
upon  him  the  right  to  set  aside  all  transfers  made  by  the 
debtor  to  defraud  his  creditors,  which  the  creditors  them- 
selves could  have  avoided.^  In  Bostwick  v.  Menck,^  it  was 
decided  that  the  right  of  a  receiver  representing  creditors 
and  acting;-  in  their  behalf,  was  no  greater  than  that  of  the 
creditors  themselves  ;  that  the  legal  and  equitable  right  of 
the  creditors  was  limited  to  securing  a  judgment  setting 
aside  transfers  as  fraudulent  only  in  so  far  as  might  be  neces- 
sary to  satisfy  debts  ;  and  that,  when  this  was  accomjilished, 
the  receiver's  duties,  and  consequently  his  powers,  and  his 
right  to  act  further  in  behalf  of  the  creditors,  ceased  as  to 
the  property  that  had  been  conveyed  by  the  debtor.^  The 
receiver  stands  in  the  place  of  the  judgment-creditor.''  In 
Olney  v.  Tanner,®  after  a  careful  examination  of  the  authori- 
ties,^ the  conclusion  is  reached  that  a  receiver  appointed  in 


'  Butler  V.  Hildreth,  5  Met.  (Mass.)  Underwood  v.  SutclifTe,  77  N.  Y.  62  ; 

49  ;   Freeland  v.  Freeland,   102  Mass.  Dunham  v.  Byrnes,  36  Minn.  106 

477  ;    but   see    Matter  of   Leiman,  32  ■'A  new  receiver  (Bowden  v.  John- 

Md.  225  ;  Dugan  v.  Vattier,  3  Blackf.  son,  107  U.  S.  264),  or  an  assignee  of  a 

(Ind.)  245.  bankrupt,  may  be  substituted  as  plain- 

"^  Loos  V.  Wilkinson,  no  N.  Y.  209;  tiffin  the  appellate  courts. 

Spring  V.  Short,  90  N.  Y.  538 ;  Grouse  '  40  N.  Y.  386. 

V.    Frothingham,  97   N.  Y.    105,  113;  *  See    Manley   v.    Rassiga,    13    Hun 

Laws  of  1858,  Chap.  314.  (N.  Y.)  290. 

^  Osgood  V.  Laytin,  48  Barb.  (N.  Y.)  '  Kennedy  v.  Thorp,  51   N.  Y.   174. 

463,  aff'd   5   Abb.  Pr.   N.  S.   (N.  Y.)  See  Olney  v.  Tanner,  iS  Fed.  Rep.  636. 

9;    Hamlin  v.  Wright,  23  Wis.  492;  "10  Fed.  Rep.  113;   aflVd    18  Fed. 

Barton  V.  Hosner,  24  Hun  (N.  Y.)  469;  Rep.  636. 

Porter    v.    Williams,    9    N.   Y.    142;  'See  Rodman  v.   Henry,   17  N.  Y. 


1 86  RECEIVERS."  §    Il6 

supplementary  proceedings  cannot  be  held  to  be  vested  by 
virtue  of  his  appointment  with  the  title  to  property  fraudu- 
lently conveyed  by  the  judgment-debtor.  The  court  will 
refuse  to  put  him  summarily  in  possession  of  the  property 
covnnously  alienated  ;  it  will  not  authorize  him  to  meddle 
with  it,  and  will  refuse  to  protect  him  in  so  doing.  The 
receiver  may,  as  we  have  seen,  assail  the  covinous  transfer 
by  an  action.^  Grover,  J.,  said,  in  Bostwick  v.  Menck  :^ 
"  He  (the  receiver)  acquires  no  right  to  the  property 
(fraudulently  assigned),  by  succession  to  the  rights  of  the 
debtor  ;  ....  no  rights  {i.  e.  of  property)  other  than  those 
of  the  debtor  are  acquired.  He  does  not  acquire  the  legal 
title  to  such  property  by  his  appointment.  That  is  confined 
to  property  then  owned  by  the  debtor  ;  and  the  fraudulent 
transferee  of  property  acquires  a  good  title  thereto  as 
against  the  debtor,  and  all  other  persons,  except  the  credit- 
ors of  the  transferrer.  The  only  right  of  the  receiver  is, 
therefore,  as  trustee  of  the  creditors.  The  latter  have  the 
right  to  set  aside  the  transfer  and  to  recover  the  property 
from  the  fraudulent  holder ;  and  the  receiver  is,  bv  law,  in- 
vested  with  all  the  rights  of  all  the  creditors  represented  by 
him  in  this  respect."^ 

In  New  Jersey,  a  receiver,  appointed  by  virtue  of  the 
statute  providing  a  method  for  discovering  the  concealed 
property  of  a  judgment-debtor,*  can,  in  his  ofificial  character, 


484  ;  Lathrop  v.  Clapp,  40  N.  Y.  333  ;  Moyerv.  Dewey,  103  U.  S.  301.  Where 

Brown  v.  Gilmore,  16  How.  Pr.  (N.  Y.)  there  is  an  assignee  a  receiver  has  no 

527 ;  Teller  \^  Randall,  40  Barb.  (N.  standing.     Olney  v.  Tanner,   18  Fed. 

Y.)  242 ;  Field  v.  Sands,  8  Bosw.  (N.  Rep.  637. 
Y.)  685  ;  Bostwick  v.  Menck,  40  N.  Y.        *  40  N.  Y.  383. 

383;  Becker  V.  Torrance,  31  N.  Y.  637.         ^  In    New  York   the  receiver  takes 

'  It  is  only  through  the  instrumen-  title  to  the  debtor's  real  property  by 

tality  of  an  assignee,  that  a  creditor  can  virtue  of  his  appointment.     Cooney  v. 

reach  property  fraudulently  transferred  Cooney,  65  Barb.  (N.  Y.)  525 ;  Fessen- 

by  a  bankrupt  prior  to  adjudication,  den  v.  Woods,  3  Bosw.  (N.  Y.)  556; 

Olney  v.  Tanner,   18  Fed.  Rep.  637;  Bostwick   v.    Menck,  40   N.    Y.    384; 

Glenny  v.  Langdon,  98  U.  S.  20 ;  Trim-  Underwood  v.  Sutcliffe,  jy  N.  Y.  62. 
ble    V.    Woodhead,    102    U.    S.    647  ;         •*  Revision  of  1877,  p.  393. 


§  ir; 


RECEIVERS    OF    CORPORATIONS. 


187 


exhibit  a  bill  in  chancery  to  annul  sales  of  such  property  or 
encumbrances  upon  it,  on  the  ground  that  such  sales  or  en- 
cumbrances are  in  fraud  of  creditors.^  In  the  case  first  cited, 
Parker  v.  Browning^  is  quoted  with  approval.  In  the  lat- 
ter case,  in  speaking  of  the  course  to  be  taken,  when  prop- 
erty, which  is  claimed  by  a  receiver  appointed  by  the  chan- 
cellor, is  in  the  hands  of  a  third  party,  who  claims  the  right 
to  retain  it.  Chancellor  Walworth  says  :  "  The  receiver  must 
either  proceed  by  suit,  in  the  ordinary  way,  to  try  his  right 
to  it,  or  the  complainant  should  make  such  third  person  a 
party  to  the  suit,  and  apply  to  have  the  receivership  ex- 
tended to  the  property  in  his  hands."  ^  A  sequestrator  or 
receiver  of  personal  property  and  rents  appointed  in  an 
action  may,  under  the  direction  of  the  court,  test  a  fraudu- 
lent alienation  of  property  *  though  this  question  is  much 
confused  in  New  York.^ 

§  117.  Receivers  of  corporations. — Receivers  of  insolvent 
corporations,  when  suing  for  portions  of  the  capital,  repre- 
sent creditors,  and  not  the  corporation,^  and  are    clolhed 


•  Miller  v.  Mackenzie,  29  N.  J.  Eq. 
292.  But  compare  Higgins  v.  Gilles- 
heiner,  26  N.  J.  Eq.  308. 

*  8  Paige  (N.  Y.)  388. 

'  See  Carr  v.  Hilton,  i  Curt.  C.  C. 
230 ;  Hamlin  v.  Wright,  23  Wis.  492  ; 
Bostvvick  V.  Menck,  4  Daly  (N.  Y.)  68. 
Willard,  J.,  in  Porter  v.  Williams,  9  N. 
Y.  142,  150,  said:  "The  act  which  the 
receiver  seeks  to  avoid  in  this  case  was 
an  illegal  act  of  the  debtor.  The  ob- 
ject of  the  action  is  to  set  aside  an  as- 
signment made  by  the  debtor  with 
intent,  as  is  alleged,  to  defraud  the 
creditor  under  whose  judgment  and 
execution  the  plaintiff  was  appointed 
receiver,  and  the  other  creditors  of  the 
assignor.  Such  conveyance  was  void 
at  common  law,  and  is  expressly  for- 
bidden by  the  statute.  It  is  void  as 
against  the  creditors  of  the  party  mak- 


ing it,  though  good  as  between  him 
and  his  grantee.  The  plaintiff,  repre- 
senting the  interests  of  the  creditors, 
has  a  right  to  invoke  the  aid  of  the 
court  to  set  aside  the  assignment.  He 
stands  in  this  respect,  in  the  same  con- 
dition as  the  receiver  of  an  insolvent 
coq^oration,  or  as  an  executor  or  ad- 
ministrator, and  like  them  can  assail 
the  illegal  and  fraudulent  acts  of  the 
debtor  whose  estate  he  is  appointed  to 
administer." 

■*  See  Donnelly  v.  West,  17  Hun  (N. 
Y.)  564;  Foster  v.  Townshend,  2  Abb. 
N.  C.  (N.  Y.)  29. 

'  See  Foster  v.  Townshend,  68  N.  Y. 
203;  Ogden  V.  Arnot,  29  Hun  (N.  Y.) 
150;  Keeney  v.  Home  Ins.  Co.,  71  N. 
Y.  396;  Fincke  v.  Funke,  25  Hun  (N. 
Y.)  618. 

6  Osgood  V.  Ogden,  4  Kcycs  (N.  V.) 


1 88  FOREIGN    RECEIVERS.  §   Il8 

with  Other  rights  than  those  which  the  corporation  pos- 
sessed.^ It  is  a  fundamental  principle,  upon  which  the 
American  cases  at  least  proceed,  that  the  capital  of  a  corpo- 
ration, especially  after  insolvency,  is  a  trust  fund  for  the 
benefit  of  creditors.^  It  is  foreign  to  our  purpose  to  enter 
into  the  wide  field  of  corporation  law  relative  to  insolvency,^ 
but  the  principles  of  these  cases  are  valuable  as  showing 
that  the  representative,  receiver,  or  liquidator  of  a  corpo- 
ration is,  like  an  administrator,  assignee,  or  receiver  of  a 
debtor,  vested  with  the  status  of  a  creditor.  Where  a 
statute  creates  a  cause  of  action  in  favor  of  creditors  who 
are  within  certain  prescribed  conditions  a  receiver  cannot 
enforce  it.*  It  may  be  observed  here  that  the  power  of  the 
comptroller  of  the  currency  to  wind  up  the  affairs  of  a 
national  bank  in  certain  contingencies  does  not  exclude  the 
authority  of  a  competent  tribunal  to  appoint  a  receiver  in 
other  cases.^ 

§  iiS.  Foreign  receivers. — In  Booth  v.  Clark  ^  the  court 
say  :  "  A  receiver  is  appointed  under  a  creditor's  bill  for 
one  or  more  creditors,  as  the  case  may  be,  for  their  benefit, 
to  the  exclusion  of  all  other  creditors  of  the  debtor,  if 
there  be  any  such Whether  appointed,  as  this  re- 
ceiver was,  under  the  statute  of  New  York,  or  under  the 
rules  and  practice  of  chancery,  as  they  may  be,  his  official 


70;  Ruggles  V.  Brock,  6  Hun  (N.  Y.)  Sawyer  v.  Hoag,  17  Wall.  610;   Hatch 

164 ;    Sawyer  v.  Hoag,   17  Wall.  610,  v.   Dana,    loi    U.  S.   205  ;    Dayton    v. 

619;  Webster  v.  Upton,  91  U.  S.  65,  Borst,  31  N.  Y.  435;  New  Albany  v. 

71;   Chubb  V.   Upton,  95   U.  S.  665,  Burke,   11    Wall.   96,    106;    Upton   v. 

667;  Dayton  v.  Borst,  31  N.  Y.  435;  Tribilcock,  91  U.  S.  45,  47 ;  Bartlett  v. 

Wait  on  Insolv.  Corps.,  Chap.  X.  Drew,  57  N.  Y.  587  ;  Lamar  Ins.  Co. 

'  Ruggles  V.  Brock,  6  Hun  (^N.  Y.)  v.    Moore,    i    Am.    Insolv.    Rep.     62  ; 

164;   Upton   V.    Englehart,    3    Dillon,  Wait  on  Insol.  Corps.,  §  142. 

496,  503;  Osgood  V.  Ogden,  4  Keyes  ^  See   Wait   on    Insolvent   Corpora- 

(N.  Y.)  70,  88  ;  Porter  v.  Williams,  9  tions,  Baker,  Voorhis  &  Co.,  1888. 

N.  Y.  142,  149;  Osgood  V.  Laytin,  3  ■*  Farnsworth  v.  Wood,  91  N.  Y.  308. 

Keyes  (N.  Y.)  521  ;  Gillet  v.  Moody,  3  *  Irons  v.  Manufacturers'  Nat.  Bank, 

N.  Y.  479.  6  Biss.  301. 

^  Wood  V.  Dummer,  3  Mason  308  ;  M7  How.  338. 


§    Il8  FOREIGN    RECEIVERS.  1 89 

relations  to  the  court  are  the  same.  A  statute  appoint- 
ment neither  enlarges  nor  diminishes  the  limitation  upon 
his  action.  His  responsibilities  are  unaltered.  Under 
either  kind  of  appointment  he  has  at  most  only  a  passive 
capacity  in  the  most  important  part  of  what  it  may  be 
necessary  for  him  to  do,  until  it  has  been  called  by  the 
direction  of  the  court  into  ability  to  act.  He  has  no  extra- 
territorial power  of  official  action  ;  none  which  the  court 
appointing  him  can  confer,  with  authority  to  enable  him 
to  go  into  a  foreign  jurisdiction  to  take  possession  of  the 
debtor's  property  ;  none  which  can  give  him,  upon  the  prin- 
ciple of  comity,  a  privilege  to  sue  in  a  foreign  court  or  an- 
other jurisdiction,  as  the  judgment-creditor  himself  might 
have  done,  where  his  debtor  may  be  amenable  to  the  tribunal 
which  the  creditor  may  seek."  ^  So  in  Brigham  v.  Ludding- 
ton,^  which  was  a  bill  filed  in  the  southern  district  of  New 
York  by  a  receiver  appointed  on  a  judgment-creditor's  bill 
in  the  eastern  district  of  Wisconsin,  the  suit  was  dismissed.^ 
To  the  suggestion  of  counsel  that,  by  the  statutes  of  Wis- 
consin, receivers  appointed  on  creditors'  bills  are  vested 
with  full  title,  and  have  full  authority  to  maintain  suits, 
which  the  Circuit  Court  of  the  United  States  for  the  south- 
ern district  of  New  York  ought  to  recognize,  Mr.  Justice 
Woodruff  said:  "(i).  This  receiver  was  appointed  under 
and  by  virtue  of  the  general  power  of  courts  of  equity,  and 
with  such  effect  only  as  is  due  to  the  order  of  the  court 
making  the  appointment.  He  was  not  appointed  under  or 
by  virtue  of  any  statute.  (2).  The  statutes  of  the  State  of 
Wisconsin  cannot  enlarge  or  alter  the  effect  of  an  order  or  de- 
cree of  the  Circuit  Court  of  the  United  States,  nor  enlarge 
or  modify  the  jurisdiction  of  that  court  or  its  efficiency."'* 


'  See  especially  Olney  v.  Tanner,  10        '  See  Hope  Mutual  Life  Ins.  Co.  v. 
Fed.  Rep.  104,  and  cases  cited.  Taylor.  2  Rob.  (N.  Y.)  278,  284. 

'•'  12  Blatchf.  237.  '  Citing  Payne  v.  Hook,  7  Wall.  425. 


190  CREDITORS    OF    CORPORATIONS.  §    U9 

A  doctrine  is  growing  up  in  favor  of  recognizing  foreign 
receivers  by  comity.^ 

§  119.  Creditors  of  corporations.  —  Creditors  of  an  in- 
debted corporation  may  have  the  aid  of  a  court  of  equity 
against  the  corporation  and  its  debtors  to  compel  the  col- 
lection of  what  is  due,  and  the  payment  of  its  debts.^  In 
Graham  v.  Railroad  Co.^  will  be  found  an  important  dis- 
cussion, by  the  learned  Mr.  Justice  Bradley,  of  the  effect 
of  a  voluntary  alienation  of  property  by  a  corporation  as 
affecting  subsequent  creditors.  In  this  case  counsel  urged 
that  the  property  of  a  corporation  was  a  trust  fund  for 
creditors,*  and  that  this  meant  all  creditors  becoming  such 
during  the  life  of  the  corporation.  The  court,  however, 
could  discover  no  reason  why  the  disposal  by  a  corporation 
of  any  portion  of  its  assets  should  be  questioned  by  sub- 
sequent creditors  of  the  corporation,  any  more  than  a  like 
disposal  by  an  individual  of  his  property  should  be  so  at- 
tacked.^ This  would  seem  to  put  corporations  and  in- 
dividuals upon  the  same  footing  as  to  voluntary  alienations, 
as  regards  a  certain  class  of  creditors  ;  but  the  distinction 
must  not  be  overlooked  that  the  corporation  itself  may  re- 
cover the  property,  where  the  voluntary  or  fraudulent  trans- 
fer was  effected  by  faithless  or  corrupt  officials. 

Creditors  of  a  corporation  who  have  exhausted  their 
remedy  at  law,  may  proceed  in  equity  to  compel  a  stock- 
holder to  pay  up  a  balance  due  upon  a  subscription.*^  So 
judgment-creditors  of  a  corporation  may  follow  corporate 


'  National  Trust  Co.  v.  Miller,  33  N.  Wall.  392  ;  Sawyer  v.  Hoag,  17  Wall. 

J.  Eq.  159;  Bidlack  V.  Mason,  26  N.  J.  610;  Dayton  v.  Borst,  31  N.  Y.  435; 

Eq.  230 ;  National  Trust  Co.  v.  Mur-  Upton  v.  Tribilcock,  91  U.  S.  45,  47 ; 

phy,  30  N.  J.  Eq.  408.     Compare  Mat-  Bartlett  v.  Drew,  57  N.  Y,  587.     See 

ter  of  Waite,  99  N.  Y.  433.  §  1 17- 

^  Ogilvie  V.  Knox  Ins.  Co.,  22  How.  ^  See  Chap.  VI. 

380  ;  2d  appeal,  2  Black  539  ;  Hatch  v.  *  Hatch  v.    Dana,    loi    U.    S.  205  ; 

Dana,  loi  U.  S.  205.  Ogilvie  v.  Knox  Ins.  Co.,  22  How.  3S0  ; 

'  102  U.  S.  148.  Pierce  v.  Milwaukee  Cons.  Co.,  38  Wis. 

■*  See  Railroad   Co.  v.   Howard,  7  253. 


§§    I20,    12  1  SHERIFF. HEIRS WIDOW.  I9I 

assets  into  the  hands  of  stockholders  amongst  whom  it  was 
divided  before  the  debts  of  the  association  were  paid.' 

§  120.  Sheriff. — When  process  comes  to  his  hands  the 
sheriff  may  undoubtedly  attach  any  property  which  lias 
been  transferred  by  an  alleged  fraudulent  assignment,  and 
hold  it  subject  to  the  decision  of  the  court  upon  the  (jues- 
tion  of  fraud.  In  such  a  case  the  sheriff  must  defend  the 
seizure  in  behalf  of  the  creditors,  and  show  that  the  assign- 
ment was  fraudulent  as  to  them.  As  to  creditors  the  title 
to  such  property  does  not  pass  if  the  assignment  is  fraudu- 
lent, but  it  remains  liable  to  seizure  to  satisfy  their  debt.* 
The  case  is  different  when  the  assigned  property  has  been 
sold  by  the  vendee  and  its  identity  destroyed  ;  the  proceeds 
cannot  be  attached  or  levied  upon  by  the  sheriff  as  the 
debtor's  property.  Merely  setting  aside  the  assignment 
would  not  vest  the  title  to  such  proceeds  in  the  debtor. 
The  only  remedy  of  the  creditor  in  such  a  case  is  to  insti- 
tute a  creditor's  suit,  and  fasten  a  trust  upon  such  proceeds 
for  the  benefit  of  creditors,  which  necessarily  confirms  the 
legal  title  of  the  assignees  to  the  assigned  property,  instead 
of  annulling  it,  as  would  be  the  case  if  the  sheriff  had  seized 
the  assigned  property  instead  of  the  proceeds.^ 

§  121.  Heirs— Widow. — The  heir  of  a  grantor  canned  im- 
peach his  ancestor's  deed  on  the  ground  that  it  was  made 
in  fraud  of  creditors,*  for  he  can  claim  no  right  which  the 
ancestor  w^as  estopped  from  setting  up.  The  statutes  avoid- 
ing fraudulent  transfers  are,  as  we  have  shown, ^  available 


'  Bartlett  v.  Drew,  57  N.  Y.  587.  35  N.  Y.  320.     See  Thurber  v.  Blanck, 

2  See  Kelly  v.  Lane,  42  Barb.  (N.  Y.)  50  N.  Y.  83;  Adams  v.  Davidson.  10 

610.     Compare  Greenleaf  V.  Mumford,  N.  Y.  309,  315.     See  §81.     Compare 

4  Abb.  Pr.  N.  S.  (N.  Y.)  134;  Gross  V.  Clark    v.    Foxcroft,   6   Me.    296.   and 

Daly,  5  Daly  (N.  Y.)  542;  Rinchey  v.  Quincy  v.  Hall,  i  Tick.  (Mass.)  357  ;  S. 

Slryker,   28    N.  Y.  45  ;    Carr   v.   Van  C.  11  Am.  Dec.  19S. 

Hoesen,    26    Hun    (N.   Y.)    316.     See  ■*  Moseley  v.  Mosclcy.  15  N.  Y.  334. 

§  81.  See  Vance  v.  Schroyer,  79  Ind.  380. 

=  Lawrence  v.  Bank  of  the  Republic,  '  Sec  Chap.  IH. ;  also  §  107. 


192 


HUSBAND    AND    WIFE,  §    T22 


only  to  the  person  or  persons  who  might  be  delayed,  hin- 
dered, or  defrauded.^  The  heir  at  law  is  not  a  proper  party 
to  enforce  an  alleged  trust  in  personal  property  in  favor  of 
an  intestate,^  It  may  be  here  observed,  though  possibly 
extraneous  to  our  general  theme,  that  one  of  several  heirs 
may  maintain  a  suit  to  set  aside  a  conveyance  procured 
from  the  ancestor  by  means  of  the  fraud  and  undue  influ- 
ence of  the  grantee,  and  that  the  other  heirs  may  testify  in 
the  suit  as  to  personal  transactions  with  the  deceased;^ 

A  widow  cannot  sue  in  chancery  to  have  her  husband's 
lands  sold,  her  dower  right  satisfied,  and  the  balance  ap- 
plied to  creditors;'*  nor  can  a  widow  who  has  knowingly 
joined  in  a  fraudulent  deed  maintain  a  bill  to  set  the  trans- 
fer aside.^ 

§  122.  Husband  and  wife. — The  relationship  of  husband 
and  wife  assumes  considerable  prominence  in  our  subject 
and  will  be  specially  treated.  We  may  here  observe  that 
a  husband  compelled  to  pay  ante-nuptial  debts  of  his  wife 
becomes  her  creditor,  and  as  such  is  entitled  to  set  aside 
fraudulent  conveyances  made  by  her  in  contemplation  of 
marriage  ;  ^  so  also  a  wife  may  attack  conveyances  executed 
by  her  husband  with  intent  to  defeat  her  right  of  dower 
which  was  about  to  attach.'''  "  It  seems  to  be  well  settled, 
that,  pending  a  divorce  suit,  a  wife  asserting  a  just  claim 
for  alimony  is,  within  the  meaning  of  statutes  prohibiting 
fraudulent  conveyances,  to  be  deemed  a  creditor."^ 


1  See  Button  v.  Jackson,  2  Del.  Ch.        *  Ware  v.  Galveston  City  Co.,  1 1 1  U. 

86;  Morrison  v.  Atwell,  9  Bosw.  (N.  S.  170. 

Y.)  503  ;  Powers  v.  Graydon,  10  Bosw.         ^  Smith  v.  Meaghan,  28  Hun  (N.  Y.) 

(N.  Y.)  630.     See  infra.  Chap.  XXVI.  423 ;  Hobart  v.  Hobart,  62  N.  Y.  80. 

Legatees. — A  legatee  cannot  avoid,         •*  Hull  v.  Hull,  26  W.  Va.  i. 
on  the  ground  of  fraud,  a  transaction         ^  Barnes  v.  Gill,  21  111.  App.  129. 
which   was   binding  on    his  testator;         ^  Westerman  v.  Westerman,  25  O.  S. 

Guidry  v.  Grivot,  2  Mart.  N,  S.  (La.)  500 ;  affirming  S.  C.  9  Am.  Law  Reg. 

13;  S.  C.  14  Am.  Dec.  193 ;  but  in  Ad-  (N.  S.)  690. 
dison  V.  Bowie,  2  Bland's  Ch.  (Md.)         ■>  See  §  70;  also  Chap.  XX. 
606,  it  is  said,  a  legatee  may  in  certain         '  Lott  v.  Kaiser,  61  Tex.  665,  673,  cit- 

cases  file  a  creditor's  bill.  ing  Feigley  v.  Feigley,  7  Md.  538  ;  Cla- 


§    123  TORT    CREDITOR.  1 93 

§  123.  Tort  creditor. — A  right  to  damages  arising  from  a 
tort  is  within  the  protection  of  the  statute  13  EHz.  c.  5,' 
and  a  conveyance  made  to  defeat  such  right  will  be  set 
aside. '^  If  the  intent  was  in  part  to  evade  fines  upon  crim- 
inal prosecution,  and  also  to  evade  the  payment. of  any 
judgment  which  might  thereafter  be  obtained  in  the  civil 
action,  the  conveyance  would  be  wholly  fraudulent.  It 
cannot  be  upheld  in  part  and  avoided  in  part.^  Ilcncc  it 
has  been  held  that  an  action  at  law,  although  in  7nalcJicio, 
is  within  the  meaning  of  the  statute  which  protects  "cred- 
itors and  others'''  against  conveyances  made  to  defraud 
them  of  their  just  and  lawful  actions,  suits,  debts,  accounts, 
damages,  penalties,  forfeitures,  and  demands.^  The  judg- 
ment-creditor in  an  action  of  trespass  has  a  judgment  for 
such  a  cause  of  action  as  justifies  his  attacking  in  some 
form  any  conve3^ance  made  by  the  defendant  pending  the 
suit,  as  being  fraudulent  against  him,  and  should  not  be 
prevented  by  injunction  from  putting  himself  into  such  a 
position  that  he  may  have  the  question  of  the  bona  fides  of 
the  grantee's  purchase  tested  in  a  court  of  law  and  before 
a  jury  through  an  action  of  ejectment.^ 


gett  V.  Gibson,  3  Cranch  C.   C.  359;  (N.  Y.)  136;   Barling  v.  Bishopp,  29 

Boils  V.  Boils,  i  Coldw.  (Tenn.)  285;  Beav.  417;  Shean  v.  Shay,  42  Ind.  375 ; 

Morrison  V.  Morrison,  49  N.H.  69;  Tur-  Bongard  v.  Block,  81  111.  1S6;  Weir  v. 

ner  v.  Turner,  44  Ala.  438  ;  Brooks  v.  Day,  57  Iowa  87;  Corderv.  Williams,  40 

Caughran,  3  Head  (Tenn.)  465  ;  Bous-  Iowa  582  ;  Harris  v.  Harris,  23  Gratt. 

lough  V.  Bouslough,  68  Pa.  St.  495  ;  (Va.)  737  ;  Hoffman  v.  Junk,  51   Wis. 

Frakes  v.  Brown,  2  Blackf.  (Ind.)  295.  613  ;  Westmoreland  v.  Powell,  59  Ga. 

'  Post  V.  Stiger,  29  N.  J.  Eq.  558.  256.     But  compare  Evans  v.  Lewis,  30 

See  Lillard   v.   McGee,  4  Bibb   (Ky.)  Ohio  St.  11. 

165;  Jackson  v.  Myers,  18  Johns.  (N.  'Weir  v.    Day,   57    Iowa   87.      .See 

Y.)  425;  Farnsworth  v.  Bell,  5   Sneed  infra.  Void  ancl  Voidable  Acts. 

(Tenn.)  531 ;  Langord  v.  Fly,  7  Humph.  ^  Scott  v.  Hartman,  26  N.  J.  Eq.  90; 

(Tenn.)  585  ;  Walradt  v.  Brown,  6  111.  Jackson   v.   Myers,  18  Johns.  (N.  Y.) 

397.     See  §  22.  425.    See  Leukenerv.  Freeman,  Frcem. 

'  Scott  V.  Hartman,  26  N.  J.  Eq.  90;  Ch.  Rep.  236;   Fox  v.  Hills,  i   Conn. 

Jackson  v.  Myers,   18  Johns.   (N.  Y.)  295;  Barling  v.  Bishopp,  29  Bcav.  417. 

425;    Clapp   V.   Leatherbee,  18    Pick.  See  §110. 

(Mass.)    138  ;    Fox   v.    Hills,    i    Conn.  '  Wclde   v.    Scotten,   27  Alb.   L.  J. 

295  ;   Pendleton  v.  Hughes,  65  Barb.  337  ;  S.  C.  59  Md.  72.     See  Gebhart  v. 
13 


194  CREDITORS    HAVING    LIENS.  §§124,125 

§  124.  Overseer  of  the  poor. — In  New  York  an  overseer 
of  the  poor  has  no  standing  in  court  before  judgment  to 
impeach  the  voluntary  deed  of  the  father  of  a  lunatic  child, 
upon  the  theory  that  the  conveyance  was  executed  with 
the  intention  of  imposing  the  burden  of  supporting  the 
son  upon  the  town.  It  seems  to  be  clear  that  an  overseer 
cannot  secure  equitable  relief  setting  aside  a  fraudulent 
transfer,  if  he  is  not  a  creditor  by  judgment  or  by  simple 
contract ;  and  no  liability  has  been  established  in  his  favor, 
by  adjudication  or  otherwise,  against  the  alleged  fraudu- 
lent grantor.^ 

§  125.  Creditors  having  liens. — A  conveyance  is  not  con- 
sidered fraudulent  as  to  a  creditor  whose  debt  is  secured  by 
judgment  or  other  lien  upon  the  land  transferred.  The 
grantee  necessarily  takes  subject  to  the  lien,  and  the  creditor 
may  pursue  the  land  in  the  same  manner  as  if  it  had  been 
conveyed  to  one  who  had  purchased  in  good  faith  for  a 
full  consideration.  He  may  follow  the  land  irrespective  of 
changes  in  the  title,  whether  honest  or  dishonest.  A  judi- 
cial sale  upon  his  lien  vests  in  the  purchaser  the  title  which 
the  debtor  had  when  the  lien  attached,  and  of  course 
divests  the  title  of  the  debtor's  grantee.  The  creditor, 
therefore,  stands  in  no  need  of  aid  from  a  court  of  equity 
to  revoke  the  debtor's  transfer.^  This  question  was  con- 
sidered in  Armington  v.  Rau,^  in  which  Haak's  Appeal"* 
was  cited  with  approval,  and  the  court  further  said:  "The 
.debtor  conveys  subject  to  the  lien.  He  has  a  right,  upon 
such  condition,  to  sell  or  give  away  his  land,  and  if  he  does 
so  fraudulently,  the  grantee's  title  is  good  against  all  the 

'^erfelcl,  51  Md.  325 ;  Bockes  v,  Lans-  '  Bowlsby  v.  Tompkins,  18  Hun  (N. 

ing,  74  N.  Y.  441  ;  Freeman  v.  Elmen-  Y.)  220, 

dorf,  7  N.  J.  Eq.  475  ;  Winch's  Appeal,  ^  Haak's   Appeal,    100   Pa.  St.   62  ; 

61  Pa.  St.  426;  Moore  v.  Cord,  14  Wis.  Zuver  v,  Clark,  104  Pa.  St.  226. 

413;  Heywood  v.  City  of  Buffalo,  14  ^  100  Pa.  St,  168. 

N.  Y.    539  ;    Townsend   v.    Mayor   of  ■*  100  Pa.  St.  62. 

New  York,  T]  N.  Y.  542  ;  Van  Doren 

V.  Mayor,  etc.,  9  Paige  (N.  Y.)  388. 


§  126 


PURCHASER  REMOVING  INCUMBRANCES. 


195 


world,  except  creditors  and  persons  intended  to  be  hin- 
dered, delayed,  or  defrauded.  A  prior  lien  creditor  is  not 
such  person.  The  conveyance,  whether  bo7ia  fide  or  fraud- 
ulent as  respects  creditors  who  have  no  liens,  is  no  obstruc- 
tion or  hindrance  to  the  enforcement  of  payment  of  the 
prior  lien." 

§  126.  Purchaser  removing  incumbrances. — A  purcliascr  at 
execution  sale  takes  the  creditor's  right  to  avoid  all  fraud- 
ulent conveyances  and  incumbrances,^  and  may  file  a  bill 
in  equity  for  that  purpose.*  A  creditor  who  has  obtained 
judgment  and  issued  execution,  may  seize  and  sell  the 
property  of  his  debtor,  and  try  the  title  of  any  one  who 
sets  up  a  prior  lien  or  incumbrance  affected  with  usury. ^ 


'  Gerrish  v.  Mace,  9  Gray  (Mass.) 
236 ;  Orendorf  v.  Budlong,  12  Fed. 
Rep.  24  ;  Hildreth  v.  Sands,  2  Johns. 
Ch.  (N.  Y.)  35  ;  Best  v.  Staple,  61  N. 
Y.  78;  Gallman  v.  Perrie,  47  Miss. 
131.  Chief-Justice  Sherwood  said: 
"  The  law  is  well  settled  in  this  State, 
that,  where  a  debtor  conveys  his  land 
with  the  fraudulent  design  above  men- 
tioned, a  resulting  trust  is  thereby  cre- 
ated in  favor  of  his  creditors,  and  is 
the  subject  of  execution  sale.  And  it 
is  equally  well  settled,  that  a  purchaser 
at  such  sale  will  occupy  as  advantage- 
ous a  position  as  though  he  were  a 
creditor,  when  proceeding  to  set  aside 
the  debtor's  conveyance  on  the  ground 
of  fraud."  Ryland  v.  Callison,  54  Mo. 
514. 

"^  Gould  V.  Steinburg,  84  III.  170.  See 
Hoxie  V.  Price,  31  Wis.  82-89.  ^^  ap- 
peared in  this  action  that  a  deed  of 
lands  from  defendants  to  a  third  per- 
son, and  from  him  back  to  the  wife, 
and  a  patent  of  certain  other  lands  to 
the  \\ife,  were  considered  as  fraudulent 
and  void  as  to  the  husband's  creditors. 
A  purchaser  of  the  land,  at  execution 
sale  under  a  judgment  agamst  the  hus- 
band, and  before  becoming  entitled  to 


the  sheriff's  deed,  brought  a  suit  to  set 
aside  the  wife's  deed  and  patent  and 
to  restrain  her  from  incumbering  the 
land.  The  suit  was  upheld  upon  the 
theory  that  the  wife  by  alienating  or 
incumbering  the  land  to  a  bona  fide 
purchaser  or  mortgagee,  would  abso- 
lutely defeat  complainant's  equitable 
rights.  See  Avery  v.  Judd,  21  Wis. 
262;  Phelan  v.  Boylan,  25  Wis.  679; 
Wood  V.  Chapin,  13  N.  Y.  509.  In 
Remington  Paper  Co.  v.  O'Dougherty, 
81  N.  Y.  481,  the  complainant  was  an 
execution  purchaser;  the  time  for  re- 
demption had  expired  as  to  the  debtor 
but  not  as  to  other  creditors.  The 
purchaser  was  held  to  be  possessed  of 
an  inchoate  title  and  equitable  interest 
sufficient  to  maintain  an  action  for  the 
cancellation  of  instruments  or  incum- 
brances which,  within  the  doctrine  of 
courts  of  equity,  are  considered  as 
clouds  upon  title.  See  Hagir  v.  Shind- 
ler,  29  Cal.  48. 

•'  Dix  V.  Van  Wyck,  2  Hill  (N.  Y.)  525  ; 
Mason  v.  Lord,  40  N.  V.  486.  See 
Post  V.  Dan,  8  Paige  fN.  Y.)  639;  re- 
versed, 7  Hill  (N.  Y.)  391  ;  Thompson 
V.  Van  Vechten,  27  N.  Y.  568. 


196  CREDITORS    OPPOSING    WILL.  §    12/ 

So  a  conveyance  of  property  gives  to  the  grantee  or  as- 
signee the  right  to  file  a  bill  to  annul  a  previous  invalid 
conveyance  made  by  the  same  grantor,^  and  a  judgment- 
creditor  may  compel  the  cancellation  of  prior  judgments 
against  the  debtor  upon  the  ground  that  they  have  been 
paid.^ 

§  127.  Creditors  opposing  will. — As  a  general  rule  no 
creditor  has  the  right  to  oppose  the  probate  of  a  will.^ 
The  right  of  contest  is  limited  to  the  heirs  at  law  and  next 
of  kin.^  It  may  be  here  observed  that,  in  Fisher  v.  Bas- 
sett,^  it  is  said  that  no  debtor  of  an  estate  could  be  allowed 
"  to  plead  ne  ungues  administrator  in  bar  of  an  action  for 
the  recovery  of  a  debt  due  to  the  estate.  The  greatest 
confusion  and  mischief  would  ensue  if  such  were  the  law  ; 
for  then,  wherever  delay  was  desired,  every  debtor  would 
deny  the  jurisdiction,  and  arrest  the  recovery  of  a  just 
debt,  by  embarrassing  inquiries  as  to  the  decedent's  domi- 
cil  or  the  place  of  his  death."  ^ 


1  McMahon  v.  Allen,  35  N.  Y.  403.  ^  Shaw  v.  Dwight,  27  N.  Y.  244. 

See  Dickinson  v.  Burrell,  L.  R.  i  Eq.  ^  Menzies  v.  Pulbrook,  2  Curteis  845  ; 

337.     But  compare  Cockell  v.  Taylor,  Heilman  v.  Jones,  5  Redf.  (N.  Y.)  398  ; 

15  Beav.    103;  Anderson  v.  Radcliffe,  Elme  v.  Da  Costa,  i  Phillim.  173. 

E.  B.  &  E.  806  ;  Milwaukee  &  M.  R.R.  *  Taff  v.  Hosmer,  14  Mich.  249. 

Co.  V.  Milwaukee  &  W.  R.R.  Co.,  20  ^  9  Leigh  (Va.)  133. 

Wis.  174;  Prosser  V.  Edmonds,  i  Y.  &  "See  Fosdick   v.  Delafield,  2  Redf. 

C.  481  ;  French  v.  Shotwell,  5  Johns.  (N.  Y.)  392;  Drexel  v.  Berney,  i  Dem. 

Ch.  (N.  Y.)  555  ;  especially,  Graham  v.  (N.  Y.)  163. 
Railroad  Co.,  102  U.  S.  156. 


CHAPTER   VIII. 


PARTIES      DEFENDANT 


§  128.  Debtor  as  defendant  in  credit- 
ors' actions. 

129.  When  debtor  not  necessary  de- 

fendant. 

130.  Defendants  need  not  be  equally 

guilty. 

131.  Fraudulent  assignee  or  grantee 

must  be  joined. 

132.  Joining  defendants. 

132a.  Conveyance  pending  suit. 


§  133.  Assignee  and  receiver  as  defend- 
ant. 

134.  Objection    as   to   non-joinder — 

How  raised. 

135.  Misjoinder  of  causes  of  action. 

136.  Executors,  administrators,  heirs, 

and  legatees. 

1 37.  Trustee  and  cestui  que  trust. 

138.  Party  having  lien. 

139.  Stockholders. 


§  128,  Debtor  as  defendant  in  creditors'  actions. — The 
doubts  and  difficulties  incident  to  the  selection  or  joinder 
of  proper  parties  are  not  restricted  to  the  class  of  com- 
plainants, but,  on  the  contrary,  cases  of  alleged  misjoinder 
and  non-joinder  of  defendants  are  frequently  up  for  adjudi- 
cation in  different  forms.  As  a  general  rule  all  persons 
participating  in  making  a  fraudulent  conveyance  are  proper 
parties  to  a  suit  to  set  the  transfer  aside.^  "  It  is  a  general 
rule  that  all  parties  interested  in  a  controversy,  or  wiio  may 
be  affected  by  a  decree  rendered  therein,  should  be  made 
parties  ;  all  who  are  nominally  or  really  interested  may 
therefore  be  joined  although  the  interests  of  all  may  not  be 
affected  alike  by  the  relief  which  may  be  granted.""'^  Let 
us  briefly  look  through  the  authorities.  The  question  of 
the  necessity  of  joining  the  grantor  or  debtor  as  a  party  de- 
fendant in  an  action  brought  by  a  creditor  to  secure  a 
discovery  of  assets,  or  cancel  a  fraudulent  conveyance,  is 
involved  in  some  obscurity  and  confusion,  and  the  authori- 


Miller  v.  Jamison,  24  N.  J.  Eq.  41.         '  Raynor  v.  Mintzer.  67  Cal.  164. 


198  DEBTOR    AS    DEFENDANT.  §    I  28 

ties  relating  to  the  subject  must  be  carefully  distinguished 
and  classified.  Prof.  Pomeroy  says,^  that  "in  an  action  by 
a  judgnient-creditor  to  reach  equitable  assets  of  the  debtor 
in  his  own  hands,  or  to  reach  property  which  has  been 
transferred  to  other  persons,  or  property  which  is  held  by 
other  persons  under  such  a  state  of  facts  that  the  equitable 
ownership  is  vested  in  the  debtor,  the  judgment-debtor  is 
himself  an  indispensable  party  defendant,  and  the  suit  can- 
not be  carried  to  final  judgment  without  him."  This  state- 
ment of  the  matter  is,  as  we  shall  presently  see,  entirely  too 
general  and  sweeping.  In  New  York  the  necessity  for 
making  the  debtor  a  party  defendant  is  made  to  depend 
upon  the  nature  of  the  particular  proceeding.  In  Miller  v. 
HalP  the  action  was  brought  to  have  an  assignment  of  a 
bond  and  mortgage  made  by  the  debtor  to  the  defendant 
declared  fraudulent  and  void  as  to  creditors.  The  New 
York  Court  of  Appeals  held  that  it  was  well  settled,  in  the 
case  of  a  creditors'  bill  to  reach  a  chose  in  action,  which 
was  the  character  of  the  suit  in  question,  the  judgment- 
debtor  was  a  necessary  party.  The  earlier  authorities  show 
that  the  practice  of  joining  the  debtor  prevailed.^  In  Shaver 
V.  Brainard**  the  action  was  in  the  nature  of  a  creditors'  bill 
brought  by  a  receiver  to  set  aside  a  conveyance  of  real 
estate  as  fraudulent,  and  apply  the  proceeds  upon  the  plain- 
tiff's judgment.  The  grantor  and  judgment-debtor  was  not 
made  a  party  defendant,  and  the  judgment  was  reversed  for 
that  reason.^  In  another  case,  where  a  receiver  filed  a  bill 
against  a  trustee  of  the  debtor  to  reach  equitable  interests 
of  the  latter  in  a  trust  fund,  the  debtor  was  declared  to  be 


'  Pomeroy   on    Remedies    and    Re-  Green  v.  Hicks,  i  Barb.  Ch.  fN.  Y.)  309. 

medial  Rights,  §  347.  See  Wallace  v.  Eaton,  5  How.  Pr.  (N. 

'^  70  N.  Y.  252  ;  S.  C.  below,  40  N.  Y.  Y.)  99. 

Supr.  Ct.  266.  •*  29  Barb.  (N.  Y.)  25. 

^  Edmeston  v.  Lyde,  i  Paige  (N.  Y.)  ^  See  Allison  v.  Weller,  3  Hun  (N. 

637  ;  Boyd  v.  Hoyt,  5  Paige  (N.  Y.)  65  ;  Y.)  608,  affi'd  66  N.  Y.  614 ;  North  v. 

Fellows  V,  Fellows,  4  Cow.  (N.  Y.)  682  ;  Bradway,  9  Minn,  183. 


§   128  DEBTOR    AS    DEFENDANT.  1 99 

a  necessary  party.^  In  Haines  v.  Hollister*^  the  assignee  of 
an  insolvent  firm,  the  personal  representatives  of  a  deceased 
partner,  and  the  surviving  partners,  were  held  to  be  properly 
joined  in  a  creditors'  action  to  compel  an  accounting  by  the 
assignee,  and  to  recover  of  the  representatives  the  balance 
of  the  plaintiffs'  claims.  In  Lawrence  v.  Bank  of  the  Re- 
public^ the  court  observed  :  "In  a  creditors'  suit  against  a 
judgment-debtor  to  set  aside  a  prior  assignment  made  by 
him  in  trust  for  the  benefit  of  creditors,  on  the  ground  of 
fraud,  he  is  a  necessary  party.  Indeed  he  must  be  deemed 
the  principal  party,  otherwise  different  persons,  claiming 
portions  of  the  assignee's  property,  could  not  be  joined  as 
defendants.  The  common  point  of  litigation  is  the  alleged 
fraudulent  transfer  of  the  property."^  The  case  of  Gaylords 
V.  Kelshaw^  is  sometimes  cited  °  as  an  authority  for  the 
proposition  that  in  any  form  of  action  to  annul  a  convey- 
ance as  fraudulent  the  debtor  must  be  summoned.  The 
court  said  that  the  debtor  was  properly  made  defendant  to 
the  suit,  as  it  was  a  debt  which  he  owed  which  the  creditor 
sought  to  collect,  and  it  was  his  insolvency  that  was  to  be 
established,  and  his  fraudulent  conduct  that  required  in- 
vestigation. It  was  expressly  held,  however,  that  it  was  not 
necessary  to  decide  whether  the  suit  could  proceed  without 
him,  because  as  matter  of  fact  he  had  been  found  in  the 
district  and  had  answered  the  bill.  Miller,  J.,  said:  "It  is 
simply  the  case  of  a  person  made  a  defendant  by  the  bill, 
who  is  also  a  proper  [the  court  did  not  say  necessary]  de- 
fendant, according  to  the  principles  which  govern  courts  of 
chancery  as  to  parties,  and  who  has  been  served  with  pro- 
cess within  the  district  and  answered  the  bill  ;  but  whose 


'  Vanderpoel  v.  Van  Valkenburgh,  6        ^  64  N.  Y.  i. 
N.  Y.  190.     See  Voorhis  v.  Gamble,  6         ^  35  N.  Y.  324. 

Mo.  App.  I  ;  Lawrence  v.  Bank  of  the        *  See  Beardsley  Scythe  Co.  v.  Foster, 

RepubHc,    35    N.    Y.    320  ;    Beardsley  36  N.  Y.  566. 
Scythe  Co.  v.  Foster,  36  N.  Y.  561  ;         '  i  Wall.  81. 
Miller  v.  Hall,  70  N.  Y.  252.  «  See  Taylor  v.  Webb,  54  Miss.  42. 


200        DEBTOR  NOT  NECESSARY  DEFENDANT.       §  I  29 

citizenship  is  not  made  to  appear  in  such  a  manner  that  the 
court  can  take  jurisdiction  of  the  case  as  to  him." 

In  an  action  for  unpaid  subscriptions  a  judgment-creditor 
may  join  all  the  stockholders,  or  if  they  are  too  numerous 
he  should  so  allege  in  the  bill ;  ^  and  the  corporation  may 
be  joined.^ 

§  129.  When  debtor  not  necessary  defendant. — Fox  v. 
Moyer^  is  an  illustration  of  a  case  in  which  the  debtor  is 
not  a  necessary  party  defendant.  The  plaintiff  was  a  judg- 
ment-creditor with  execution  returned  unsatisfied.  He 
claimed  that  his  judgment  was  a  lien  upon  certain  real  es- 
tate which  one  of  the  judgment-debtors  had  fraudulently 
conveyed  to  the  defendant,  and  he  commenced  this  action 
to  have  the  cloud  resting  on  the  lien  of  his  judgment  re- 
moved, and  to  have  his  judgment  satisfied  out  of  this  land, 
notwithstanding  the  conveyance.  Earl,  C,  in  delivering 
the  opinion  of  the  New  York  Commission  of  Appeals, 
said  :  "  The  conveyance  was  good,  as  between  the  parties 
thereto,  and  hence  no  one  had  any  interest  to  defend  this 
suit  but  the  defendant,  and  he  was  therefore  the  only  proper 
party  defendant."^  Fox  v.  Moyer  was  relied  upon  by  the 
plaintiff's  counsel  in  Miller  v.  HalP  as  controlling,  but  the 
Court  of  Appeals  said  that  the  former  case  was  not  a  cred- 
itors' bill,  and  was  plainly  to  be  distinguished  from  the 
other  cases  which  we  have  noticed.  In  Bufhngton  v.  Har- 
vey^ it  was  urged  that  the  assignee's  bill  was  defective  be- 
cause the  bankrupt  was  not  joined.  Bradley,  J.,  after  re- 
marking that  the  bankrupt  had  no  interest  to  be  affected 
except  what  was  represented  by  the  assignee,  said  :  "As  to 

'  Adler  v.  Milwaukee  Patent  Brick  Patterson  v.  Lynde,  112  111.  196;  Tay- 

Mfg.  Co.,  13  Wis.  57 ;  Vick  v.  Lane,  56  lor  on  Corps.,  §704. 

Miss.  681  ;  Wetherbee  v.  Baker,  35  N.  ^  54   N.   Y.   130.      See   Leonard   v. 

J.  Eq.   501  ;   Holmes   v.  Sherwood,  3  Green,  34  Minn.  140. 

McCra.  405  ;  Bronson  v.  Wilmington,  •*  See  Campbell  v.  Jones,  25  iVIinn.155. 

N.  C,  Life  Ins.  Co..  85  N.  C.  411.  '  40  N.  Y.  Supr.  Ct.  268,  affi'd  70  N. 

^  Wetherbee  v.  Baker,  35  N.  J.  Eq.  Y.  252. 

501  ;  Perkins  v.  Sanders,  56  Miss.  733 ;  *  95  U.  S.  103. 


§  129      DEBTOR  NOT  NECESSARY  DEFENDANT.        20I 

the  bankrupt  himself  the  conveyance  was  good  ;  if  set  aside 
it  could  only  benefit  his  creditors.  He  could  not  gain  or 
lose,  whichever  way  it  might  be  decided."^  In  Potter  v. 
Phillips  ^  the  court  said  that  though  the  debtor  was  a  proper 
party,  it  did  not  see  why  he  was  to  be  regarded  as  a  neces- 
sary party  ;  whether  the  conv^eyances  were  fraudulent  or  in 
good  faith  the  property  irrevocably  passed  beyond  his  con- 
trol. He  could  be  prejudiced  in  no  way,  in  a  legal  sense, 
by  a  determination  which  subjected  the  property  to  the 
payment  of  his  debts.  So  it  was  decided  in  Minnesota, 
that  where  a  creditor  sold  land  which  the  debtor  had  fraud- 
ulently alienated,  the  fraudulent  grantee  might  bring  an 
action  against  the  purchaser  to  determine  his  title  without 
bringing  in  the  fraudulent  grantor.^  It  is  remarked  in 
some  of  the  cases  that  the  fraudulent  grantor  should  be 
joined  because  it  is  his  conduct  that  is  to  be  investigated. 
The  Supreme  Court  of  Mississippi  observe,  however,  that 
the  object  of  the  proceeding  is  to  reach  property,  not  char- 
acter. In  truth  the  proceeding  is  in  rem,  and  while  the 
complainant  may,  if  he  chooses  so  to  do,  join  as  defendants 
all  who  are  connected  with  the  property,  or  the  transac- 
tions to  be  investigated,  he  is  only  compelled  to  join  those 
in  whom  the  legal  title  vests,  or  those  who  have  a  beneficial 
interest  to  be  affected.'*  Cases  are  cited  in  consonance  with 
this  reasoning.^ 

What  inference  then  is  to  be  deduced  from  this  mass  of 
authority,  and  which  class  of  cases  embodies  the  best  logic  ? 
Should  the  debtor  be  joined  as  a  defendant  in  an  action  to 
annul  a  fraudulent  transfer?  The  best  reasoning  of  the 
authorities  seems  to  establish   the  rule  that   the  debtor's 


'  Benton  v.  Allen,  2  Fed.  Rep.  448;  ray  v.  Mason,  48  Me.  178;    Mern,-  v. 

Weise  v.  Wardle,  L.  R.  19  Eq.  171.  Fremon,  44  Mo.  518;  Cornell  v.  Rad- 

"■  44  Iowa  357.  way,  22  Wis.  260.     See  Shaw  v.  Mill- 

'  Campbell  v.  Jones,  25  Minn.  155.  saps,  50  Miss.  380;  Jackman  v.  Robin- 

•*  Taylor  v.  Webb,  54  Miss.  36.  son,  64  Mo.  289. 
*  Smith  V.  Grim,  26  Pa.  St.  95  ;  Dock- 


202  DEFENDANTS    NOT    EQUALLY    GUILTY.  §    I30 

presence  as  a  defendant  is  superfluous  in  suits  brought 
against  fraudulent  alienees  to  annul  specific  covinous  con- 
veyances. The  transfer  is  conclusive  upon  him,  and  hence 
his  joinder  cannot  aid  the  creditor,  or  benefit  the  debtor  ; 
the  suit  is  a  proceeding  in  rem  to  clear  the  title  to  the 
property  only  so  far  as  the  creditor's  needs  may  require  ; 
under  established  principles  of  law  the  debtor  can  gain 
nothing  by  it ;  he  is  practically  a  stranger  to  the  property, 
nor  can  he  be  prejudiced  by  a  decree  which  applies  the 
property  to  the  payment  of  a  fixed  judgment-debt.  On 
the  other  hand,  where  the  suit  prosecuted  is  purely  a  cred- 
itors' bill  embodying  the  elements  of  a  bill  of  discovery, 
the  debtor's  presence  would  seem  to  be  essential  to  the 
jurisdiction  of  the  court.  The  practitioner  must  be  careful 
to  distinguish  between  an  action  instituted  to  reach  specific 
property  fraudulently  alienated,  and  a  suit  brought  to  dis- 
cover equitable  interests  which  are  not  subject  to  execu- 
tion, and  the  title  to  which  is  in  the  debtor.  In  the  latter 
case  the  debtor  must  of  necessity  be  a  defendant.  Espe- 
cially should  the  complainant  make  the  debtor  a  defendant 
where  it  appears  that  parties  holding  separate  property 
under  distinct  conveyances  are  joined.  In  such  proceed- 
ings the  debtor  constitutes  the  king-pin  of  the  action.  In 
any  case  it  is  the  safer  and  more  prudent  practice  to  sum- 
mon the  debtor  as  a  defendant,  for  a  vexed  question  is  then 
put  at  rest,  and  the  misfortune  similar  to  that  which  over- 
whelmed the  creditors'  representative  in  Miller  v.  Hall  ^ 
will  be  averted.^ 

§  130.   Defendants  need  not  be  equally  guilty. — hs  a  gen- 
eral rule  where  the  subject-matter  of  a  suit  is  real  or  per- 


'  70  N.  Y.  252.  no  fraud  or  concealment  is  imputed, 

-  When  the  sole  design  of  a  bill  is  to  no   discovery   sought,    and    no    ruling 

have  individual  property  of  one  partner,  asked,  is   neither   a    necessary   nor   a 

claimed  to  have  been  fraudulently  alien-  proper  party.     Randolph  v.   Daly,  16 

ated,  applied  in  payment  of  a  firm  judg-  N.  J.  Eq.  31 5. 

ment,  another  partner  against  whom 


§    130  DEFENDANTS    NOT    EQUALLY    GUILTY.  203 

sonal  property,  and  the  purj)ose  of  the  plaintiff  is  to  set 
aside  fraudulent  judicial  proceedings  in  reference  to  it,  the 
complainant  should  make  all  persons  parties  who  were  act- 
ors in  the  proceedings,  especially  if  they  claim  a  present 
interest  in  the  property  in  dispute.  A  complaint  so  framed 
is  not  demurrable  on  the  theory  that  there  is  an  improper 
joinder  of  several  causes  of  action  against  different  persons ; 
on  the  contrary  it  is  regarded  as  a  single  cause  of  action 
affecting  all  the  defendants.  Westcott,  J.,  in  delivering 
the  opinion  of  the  Supreme  Court  of  Florida,^  very  appro- 
priately says  :  "  It  is  apparent  from  the  case  stated  that  all 
of  the  defendants  were  not  jointly  and  equally  concerned 
in  each  distinct  fraudulent  act  charged.  There  was  a  series 
of  acts  in  this  well-conceived  network  of  fraud,  all  termi- 
nating in  the  deception  and  injury  of  the  plaintiff.  The 
defendants  performed  different  parts  in  the  drama.  These 
acts  affected  the  property  of  the  debtor — some  the  per- 
sonal property,  others  the  real  estate.  The  object  of  the 
plaintiff  in  this  complaint  is  to  get  the  assistance  of  this 
court  in  unravelling  this  network  of  fraud  in  respect  to 
each  species  of  property,  and  to  have  a  due  application  of 
the  same  to  the  payment  of  the  claims  of  creditors.  The 
right  of  the  plaintiff  is  against  the  whole  property,  and  his 
right  against  all  portions  of  it  is  of  the  same  nature.  The 
decree  in  chancery  and  the  sale  thereunder  are  but  acts  of 
fraud,  which  are  sought  to  be  set  aside  in  order  to  enforce 
this  general  right.  In  fact  the  right  to  set  aside  these  pro- 
ceedings can  only  coexist  with  an  equity  affecting  the  prop- 
erty which  was  the  subject  of  them.  There  can  be  no  such 
thing  as  an  equity  or  right  to  set  aside  these  proceedings 
distinct  and  independent  of  rights  and  equities  attached  to 
the  subject-matter  that  they  affect.  The  result  is  that  these 
are  not  several  causes  of  action,  but  are  acts  which,  con- 
nected with  the  debt  due  plaintiff,  constitute  a  grounil  for 
one  action  alone." 

'  Howse  V.  Moody,  14  Fla.  63. 


204  FRAUDULENT    ASSIGNEE.  §§    1 3 1,    T32 

§  131.  Fraudulent  assignee  or  grantee  must  be  joined. — A 
jud<;^ment  as  a  general  rule  only  binds  parties  and  privies. 
As  the  property  which  is  the  object  of  pursuit  is  usually  in 
the  hands  of  a  transferee,  it  follows  that  such  person  must 
be  joined  as  defendant,  so  that  he  may  be  affected  and 
concluded  by  the  judgment.  The  proceeding  would  be 
futile  if  it  omitted  him.'  It  was  accordingly  held,  in  a 
case  where  a  creditors'  bill  was  filed  to  reach  moneys  due 
upon  a  mortgage  which  was  alleged  to  have  been  fraudu- 
lently assigned  by  the  debtor,  that  the  assignee  of  the 
mortgage,  although  he  resided  out  of  the  State,  must  be 
joined  as  a  defendant.^  Parties  to  intermediate  convey- 
ances need  not  be  joined,^  nor  grantees  pende7ite  lite,  for 
they  stand  in  no  better  position  than  those  under  whom 
they  claim.* 

In  a  suit  to  set  aside  a  fraudulent  conveyance  there  is 
no  necessary  inconsistency  in  averring  the  grantee  to  be  a 
fictitious  person,  and  stating  that  the  deed  in  his  name  was 
made  to  hinder  and  defraud  creditors.^ 

§  132.  Joining  defendants. — The  rules  with  reference  to 
the  joinder  of  defendants  will  be  noticed  somewhat  at 
length  in  discussing  the  subject  of  complaints  bad  for  mul- 
tifariousness.^ The  cases  there  reviewed  seem  to  establish 
the  principle  that  different  fraudulent  purchasers  of  distinct 
pieces  of  property  may  be  joined  as  defendants.  In  such 
cases  the  debtor  is  a  necessary  party,  as  he  is  "the  very 
link  which  unites  them  all  together,  the  common  centre  to 
which  they  are  all  connected,  and  it  is  because  he  is  a  party 


'Sage  V.  Mosher.  28  Barb.  (N.  Y.)  Dousman,    18   Wis.   456;    Hamlin   v. 

287.  Wright,  23  Wis.  491. 

2  Gray  v.  Schenck,  4  N.  Y.  460.    See  ^  Stout  v.  Stout,  'j'j  Ind.  537  ;  Walter 

also  Tichenor  v.  Allen,  13  Gratt.  (Va.)  v.  Riehl,  38  Md.  211 ;  Jackman  v.  Rob- 

15  ;  Jackman  v.  Robinson,  64  Mo.  289  ;  inson,  64  Mo.  289. 

Hammond  v.  Hudson  River  I.  &  M.  ^  Schaferman    v.    O'Brien,    28    Md. 

Co.,  20  Barb.  (N.  Y.)  379;    Copis  v.  565. 

Middleton,  2  Madd.  410;  Thornberry  *  Purkitt  v.  Polack,  17  Cal.  327. 

V.   Baxter,    24  Ark.   76;    Winslovv   v.  ^  See  §§  150,  151,  152. 


§    12,2a  CONVEYANCE    PENDING    SUIT.  205 

defendant  that  they  can  all  be  joined  in  one  action  as  co- 
defendants."^  The  defendants  in  such  cases  are  said  to  be 
united  in  a  common  design.  Each  is  charged  with  collud- 
ing with  the  debtor  in  order  to  defraud  his  creditors. 
Where  there  is  one  entire  case  stated,  as  against  the  debtor, 
it  is  no  objection  that  one  or  more  of  the  defendants  to 
whom  parts  of  the  property  have  been  fraudulently  con- 
veyed had  nothing  to  do  with  the  other  fraudulent  trans- 
actions. The  case  against  the  debtor  is  so  entire  that  it 
cannot  be  prosecuted  in  several  suits,  and  yet  each  of  the 
defendants  is  a  necessary  party  to  some  part  of  the  case 
stated.^  If,  however,  the  party  reached  and  made  defendant 
has  a  remedy  over  against  other  parties  for  contribution  or 
indemnity,  it  will  be  no  defense  to  the  primary  suit  against 
him  that  such  persons  are  not  made  parties.  A  creditor 
might  never  get  his  money  if  he  could  be  stayed  until  all 
the  parties  who  were  obligated  could  be  made  to  contribute 
their  proportionate  shares  of  the  liability.^ 

§  132a.  Conveyance  pending  suit. — The  law  is  established 
that  a  party  who  intermeddles  with  property  in  litigation 
does  so  at  his  peril,  and  is  as  conclusively  bound  by  the  re- 
sults of  the  litigation,  whatever  they  may  be,  as  if  he  had 


'  Pomeioy's  Remedies  and  Remedial  Compare  Atty.-Genl.  v.  Corporation  of" 

Rights,  §347;  Lawrence    v.   Bank    of  Poole,  4  Mylne  &  Cr.  31;  Brinkerhoff 

the  Republic,  35  N.  Y,  324;  Trego  v.  v.  Brown,  4  Johns.  Ch.  (N,   Y.)  671  ; 

Skinner,  42  Md.  432  ;  Haines  v.  Hoi-  Fellows   v.  Fellows,   4   Cow.    (N.    Y.) 

lister,  64  N.  Y,  I ;  Vanderpoel  v.  Van  682  ;    Boyd    v.  Hoyt.  5  Paige  (N.  Y.) 

Valkenburgh,  6  N.  Y.  190;  Waller  v.  78;  Turner  v.  Robinson,  i  Sim.  &  S. 

Shannon,  53  Miss.  500;  Bauknight  v.  313;  Marx   v.  Tailer,    12    N.    Y.  Civ. 

Sloan,  17  Fla.   284;  Donovan  v.  Dun-  Pro.  226. 

ning,  69  Mo.  436;  Van  Kleeck  v.  Mil-  '  Marsh  v.  Burroughs,  i  Woods  468. 

ler,  19  N.  B.  R.  484;  Bank  v.  Harris,  Where  an  action  is  brouglu  to  forfeit  a 

84    N.    C.    206 ;  Roycr  Wheel   Co.  v.  charter  a  lessee  of  the  corporation  may 

Fielding,   61    How.    Pr.    (N.    Y.)  437.  be  let  in  to  defend.     Pcojjle  v.  Albany 

See  §  150.     Chase  v.  Searles,  45  N.  H.  &  Vt.  R.R.  Co.,  77  N.  Y.  232.     The 

511;  Allison  V.  Weller,  6  T.  &  C.  (N.  husband    of    the  transferee    is   not   a 

Y.)  291  ;  Boone   County   v.  Keck,  31  proper  defendant  in   an  action   to  set 

Ark.  387.  aside   the   transfer.      Lore  v.  Dierkes, 

■'  Way  V.  Bragaw,  16  N.  J.  Eq.  216.  19  J.  &  S.  (N.  Y.)  144.     As  to  when  a 


206  ASSIGNEE    AND    RECEIVER    AS    DEFENDANT.  §  1 33 

been  a  party  to  it  from  the  outset.^     Were  the  rule  other- 
wise endless  entanglements  would  result.^ 

§  133.  Assignee  and  receiver  as  defendant. — In  a  case 
which  arose  in  New  York,  in  which  the  assignee  of  an  in- 
solvent copartnership  had  been  joined  as  defendant,  the 
Court  of  Appeals  said:  "As  this  is  an  equity  action,  the 
assignee  of  the  firm,  who  had  received  its  assets  and  never 
rendered  any  account  for  the  same,  was  a  proper  party. 
He  represents  the  firm,  stands  in  its  place  so  far  as  prop- 
erty is  concerned,  and  the  avails  of  the  same  in  his  hands 
are  first  liable  to  be  appropriated  to  pay  the  demands  of 
the  plaintiffs.  No  valid  reason  exists  why  a  person  thus 
situated  is  not  a  proper  party,  in  connection  with  the  sur- 
vivors of  the  copartnership  and  the  representative  of  the 
deceased  partner."^  If  an  action  is  brought  by  a  judgment- 
creditor  to  reach  property  fraudulently  alienated,  the  fact 
that  the  debtor  has  made  a  general  assignment  for  the 
benefit  of  creditors  is  no  defense  to  the  debtor  or  to  his 
fraudulent  alienee,  because  they  can  have  no  interest  what- 
ever in  the  fund,  and  are  not  vested  with  the  right  to  guard 
any  interests  the  assignee  may  possibly  have  ;  it  is  the  as- 
signee's exclusive  privilege  to  personally  assert  such  rights.^ 
Furthermore,  under  some  circumstances,  the  creditor  may 
maintain  an  action  in  his  own  name  to  set  aside  a  fraudu- 
lent conveyance,  even  though  the  assignee  has  the  same 
right,  if  it  can  be  shown  that  the  assignee  is  in  collusion 
with  the  fraudulent  parties,  or  has  refused  on  proper  re- 
quest to  become  a  plaintiff.^  In  any  case  the  defense  of 
the  non-joinder  of  the  assignee,  to  be  available,  should  be 

cause  of  action  to  set  aside  a  mortgage  Salisbury   v.  Morss,    7    Lans.  (N.    Y.) 

on  the  ground  of  usury  and  a  cause  of  359,  affi'd  55  N.  Y.  675. 

action   to  annul  a  fraudulent  convey-  -'  See  §157. 

ance  cannot    be  joined,    see   Marx  v.  ^  Haines  v.  Hollister,  64  N.  Y.  3. 

Tailer,  12  N.  Y.  Civ.  Pro.  226.  •*  Fort  Stanwix  Bank  v.  Leggett,  51 

'  Tilton   V.  Cofield,  93   U.  S.    168  ;  N.  Y.  554. 

Inloes'  Lessee  v.  Harvey,  11  Md.  524;  *  Bate  v.  Graham,  11  N.  Y.  237.  See 

§114- 


§   134  OBJECTION    AS    TO    NON-JOINDER.  20/ 

taken  by  demurrer  or  answer,^  disclosing  the  names  of  the 
omitted  parties,^  or  it  will  be  considered  waived.^ 

§  134.  Objection  as  to  non-joinder — How  raised. — Durand 
V.  Hankerson'*  is  perhaps  an  extreme  illustration  of  this 
latter  proposition.  That  action  was  prosecuted  by  a  cred- 
itor to  cancel  a  deed.  The  conveyance  was  held  to  be 
good,  but  it  appeared  that  the  debtor  had  taken  back  a 
mortgage  upon  the  property,  which  remained  unsatisfied, 
and  the  evidence  tended  to  show  that  the  debtor  had  as- 
signed the  mortgage  to  a  person  not  a  party  to  the  suit.  It 
was  proved  and  found  that  this  assignment  was  fraudulent, 
and  the  purchaser  from  the  debtor  was  directed  to  pay  the 
mortgage  to  a  receiver.  The  purchaser  strenuously  re- 
sisted this  decree,  upon  the  ground  that  the  pretended 
assignee  of  the  mortgage  not  being  a  party,  was  not  bound 
by  the  judgment,  but  the  learned  Woodruff,  J.,  held  that 
while  it  presented  a  case  of  possible  hardship,  as  payment 
might  perhaps  be  enforced  a  Second  time,  yet  the  purchaser 
should  have  protected  himself  by  raising  the  objection  in 
the  manner  prescribed  by  law.  The  defendant,  who  neither 
by  answer  nor  demurrer  takes  such  an  objection,  waives  it, 
and  therefore  cannot  afterward  be  heard  to  object  on  that 
ground  to  any  decree  to  which,  upon  the  facts  alleged  and 
proved,  the  plaintiff  may  be  entitled.  The  cause  thereafter 
proceeds,  as  to  him,  with  the  like  right  in  the  plaintifT  to  a 
decree  as  if  the  supposed  proper  or  necessary  party  had  been 
brought  into  court. 

We  may  here  observe  that  the  appointment  of  a  re- 
ceiver does  not  absolutely  dissolve  a  national  bank,  and 
that  in  an  action  to  establish  the  rejected  claim  of  a  cred- 
itor, the  bank  and  the  receiver  may  both  be  made  parties 
defendant.^ 

'  Fort  Stanwix  Bank  v.  Leggett,  51  '  Annin  v.  Annin,  24  N.  J.  Eq.  184  ; 

N.  Y.  554.  Lyman  v.  Place,  26  N.  J.  Eq.  30. 

■'  Bay  State  Iron  Co.  v.  Goodall.  39  '  39  N.  Y.  287. 

N.  H.  234.  "  Green  v.  Walkill  Nat.  Bank,  7  Hun 


208  EXECUTORS  AND  ADMINISTRATORS.         §§135,136 

§  135,  Misjoinder  of  causes  of  action. — A  cause  of  action 
ao"ainst  sureties  upon  the  bond  of  an  administrator,  claim- 
ins;  a  breach  of  its  condition,  cannot  be  united  in  the  same 
complaint  with  a  cause  of  action  arising  out  of  the  fraud- 
ulent disposition  of  property,^  against  the  administrator  of 
the  deceased  intestate  and  others. 

§  136.  Executors,  administrators,  heirs,  and  legatees. — 
We  have  already  considered  the  status  of  personal  repre- 
sentatives,^ heirs,  and  legatees,'^  as  complainants.  Let  us 
briefly  advert  to  the  question  of  their  joinder  as  defend- 
ants. In  Allen  v.  Vestal,^  it  was  said  that  a  creditor,  in 
an  action  to  set  aside  a  fraudulent  conveyance  to  heirs  of 
a  deceased  debtor,  should  allege  that  the  personal  property 
had  been  first  exhausted,  and  should  make  the  adminis- 
trator a  party  ;  or,  if  there  was  none,  should  secure  one  to 
be  appointed.^  This  is  but  another  phase  of  the  general 
question  as  to  the  necessity  of  joining  the  debtor  as  a  de- 
fendant. Authorities  can  bp  cited  to  the  effect  that  the 
administrator  is  not  a  necessary  party  to  the  creditors'  pro- 
ceedings,*^ and  to  the  opposite  effect,^  and  holding  that  heirs 
need  not  be  joined,^  and,  in   New  York,  as  is  elsewhere 

(N.  Y.)  64;  Turner  v.  First  Nat.  Bank,  75  Mo.  462  ;  Jackman  v.  Robinson,  64 

26  Iowa  562.      Compare   Pahquioque  Mo.  289.     See  Coffey  v.  Norwood,  81 

Bank  v.  Bethel  Bank,  36  Conn.  325;  Ala.   516;    Munn   v.  Marsh,  38  N.  J. 

Kennedy  v.  Gibson,  8  Wall.  498.  Eq.  410. 

'  Howse  V.  Moody,  14  Fla.  59.  Com-  '  Alexander  v.  Quigley,  2  Duv.  (Ky.) 

pare,  generally,  N.  Y.  &  N.  H.  R.R.  400 ;    Postlewait    v.    Howes,    3    Iowa 

Co.  V.  Schuyler,  17  N.  Y.  607  ;    Town  366 ;  Coates  v.  Day,  9  Mo.  300;  Boggs 

of  Venice  v.  Woodruff,  62  N.  Y.  470.  v.  McCoy,   15  W.  Va.  344;  Pharis  v. 

-  See  §§  112,  113.  Leachman,   20  Ala.    662.     See  Bach- 

"  See  §  121.  man  v.  Sepulveda,  39  Cal.  688. 

*  60  Ind.  245.  '  Smith  v.  Grim,  26  Pa.  St.  96 ;  Wall 

*  Boggs  V.  McCoy,  1 5  W.  Va.  344.  v.  Fairley,  73  N.  C.  464 ;  Shaw  v. 
Contra,  Jackman  v.  Robinson,  64  Mo.  Millsaps,  50  Miss.  384.  Compare 
289.  Compare  Smith  v.  Grim,  26  Pa.  Simmons  v.  Ingram,  60  Miss.  886. 
St.  95.  The    conveyance    made   by   their  an- 

*  Dockray  v.  Mason,  48  Me.  178  ;  cestor,  it  is  said,  though  fraudulent. 
Merry  v.  Fremon,  44  Mo.  518;  Tay-  concludes  them,  and  effectually  cuts  off 
lor  V.  Webb,  54  Miss.  36  ;  Cornell  v.  all  their  interest  in  the  property.  Har- 
Radway,  22  Wis.  260;  Zoll  v.  Soper,  lin  v.  Stevenson,  30  Iowa  371.     It  may 


§  136 


HEIRS    AND    LEGATEES. 


209 


shown,'  a  distinction  is  made  as  to  the  form  of  the  action, 
the  debtor  being  a  necessary  party  in  a  creditors'  action,^ 
but  not  in  a  suit  in  equity  to  remove  a  fraudulent  cloud.'* 
Where  this  distinction  is  recognized,  it  might  be  extended 
to  cover  the  cases  of  personal  representatives  and  heirs. 
The  United  States  Supreme  Court  leans  to  the  view  that, 
in  a  suit  to  charge  real  estate  with  the  payment  of  a  debt, 
the  heirs  and  devisees  should  be  made  parties  to  the  bill,'' 

In  a  creditors'  bill  under  which  an  executor  had  been  re- 
moved from  office,  the  Supreme  Court  of  South  Carolina 
held  that  the  legatees  were  necessary  parties,  and  that  the 
receiver  appointed  in  the  place  of  the  deposed  executor 
did  not  represent  them.^  Again  the  Supreme  Court  of 
Ohio  has  decided,  that  where   the  grantee  dies  after  the 


here  be  observed  that  the  power  of  a 
court  of  equity  to  charge  real  estate  in 
the  hands  of  heirs  with  the  payment 
of  the  ancestor's  debts  is  undoubted. 
Chewett  v.  Moran,  17  Fed.  Rep.  820; 
Payson  v.  Hadduck,  8  Biss.  293 ;  Rid- 
dle V.  Mandeville,  5  Cranch  322  ;  Strat- 
ford V.  Ritson,  10  B^v.  25  ;  Ponsford 
V.  Hartley,  2  Johns.  &  H.  736  ;  Adams' 
Eq.  257  ;  Stor)''s  Eq.  Plead.  99-102. 
By  statute  in  New  York  heirs  of  an  in- 
testate who  have  inherited  land  must, 
in  certain  cases,  be  sued  jointly,  and 
not  separately,  for  a  debt  due  from  the 
deceased.  Kellogg  v.  Olmsted,  6  How. 
Pr.  (N.  Y.)  487,  See  Selover  v.  Coe,  63 
N.  Y.  438. 

'  See  §§  128,  129. 

»  Miller  v.  Hall,  70  N.  Y.  252. 

^  Fox  V.  Moyer,  54  N.  Y.  130. 

•*  Walker  v.  Powers,  104  U.  S.  251. 

Administrator  not  necessary  party 
— Cornell  v.  Radway. — In  an  action 
which  arose  in  Wisconsin,  it  appeared 
that  a  debtor  in  his  lifetime  received 
an  absolute  deed  of  land  and  failed  to 
record  it,  and  subsequently  destroyed 
the  deed  with  a  fraudulent  design,  and 
procured  the  grantor  to  execute  an- 
14 


other  deed  to  a  third  person  without 
consideration.  Ajudgment-creditor  of 
the  deceased  debtor,  whose  judgment 
was  recovered  while  the  deceased  held 
the  first  deed,  brought  a  suit  against 
the  third  party,  and  the  widow  and 
heirs  of  the  deceased  debtor,  to  estab- 
lish the  debtor's  title  and  enforce  the 
lien  of  the  judgment.  Objection  was 
raised  that  the  administrator  was  not  a 
party.  The  court  said :  "  This  is  well 
answered  when  it  is  said  that  this  is  a 
proceeding  for  the  benctit  of  the  estate, 
and  that  the  administrator  could  make 
no  opposition  if  he  were  present.  We 
do  not  see,  therefore,  how  the  estate 
can  be  prejudiced  or  the  plaintiff's  right 
to  relief  affected  by  the  absence  of  the 
administrator.  The  conveyance  to  the 
defendant  Jones  [the  third  party)  being 
set  aside,  and  the  title  adjudged  to 
have  been  in  the  deceased  judgment- 
debtor  from  the  time  of  his  purchase, 
the  plaintiff  will  then  proceed  as  if  the 
debtor  had  died  seized  of  the  land  with 
full  evidence  of  title  in  himself.  The 
administrator  is  not  a  necessarj' party." 
Cornell  v.  Radway,  22  Wis.  265. 
'  Eraser  v.  Charleston.  13  S.  C.  533. 


2  TO  TRUSTEE    AND    CESTUI    QUE    TRUST.  §    1 37 

rendering  of  a  decree  in  favor  of  a  judgment-creditor  set- 
ting aside  a  conveyance  and  ordering  a  sale  of  the  prop- 
erty, the  failure  to  revive  the  decree  against  the  heirs  of 
the  grantee  did  not  affect  the  title  of  a  purchaser  under 
the  decree.^ 

What  then  is  the  result  of  the  cases  upon  this  point  ? 
Necessarily  much  the  same  conclusion  must  be  reached  as 
is  gathered  from  the  authorities  upon  the  question  of  the 
joinder  of  the  debtor  in  an  action  to  reach  assets  in  the 
hands  of  a  third  party.  We  have  already  seen  that  the 
personal  representatives  may,  in  certain  cases,  annul  covin- 
ous alienations  made  by  the  deceased,  but  only  so  far  as 
mav  be  necessary  to  satisfy  creditors.^  In  States  where  the 
right  of  the  creditor  to  seek  direct  relief  is  upheld,  it  is 
difficult  to  see  why  the  personal  representatives  or  heirs 
should  be  joined  ;  the  conveyance  is  conclusive  upon  such 
parties,  and  their  presence  in  the  suit  will  neither  aid  the 
creditors  nor  benefit  them, 

§  137.  Trustee  and  cestui  que  trust. — Mr.  Pomeroy  says  :^ 
"There  is  a  broad  distinction  betvv^een  thecase  of  an  action 
brought  in-  opposition  to  the  trust,  to  set  aside  the  deed  or 
other  instrument  by  which  it  was  created,  and  to  procure 
it  to  be  declared  a  nullity,  and  that  of  an  action  brought  in 
furtherance  of  the  trust,  to  enforce  its  provisions,  to  estab- 
lish it  as  valid,  or  to  procure  it  to  be  wound  up  and 
settled.  In  the  first  case,  the  suit  may  be  maintained 
without  the  presence  of  the  beneficiaries,  since  the  trus- 
tees represent  them  all  and  defend  for  them."  The  Su- 
preme Court  of  Georgia,*  adopting  this  general  rule, 
held  that  where  a  creditor  claims  not  under  but  in  oppo- 
sition to  a  deed  of  trust  made  by  his  debtor,  and  seeks 
to  set  the  same  aside  on  the  ground  that  it  is,  as  to  him. 


'  Beaumont  v.  Herrick,  24  Ohio  St.         ^  Remedies   and    Remedial    Rights, 
446.  §  357. 

'  See  §§  128,  129.  •*  Tucker  v.  Zimmerman,  61  Ga.  599. 


§    138  PARTY    HAVING    LIEN.  211 

fraudulent  and  void,  he  is  at  liberty  to  proceed  against  the 
fraudulent  trustee  who  is  the  holder  of  the  lejral  estate  in 
the  property,  without  joining  the  cestui  que  tiiist}  A 
decree  setting  aside  the  deed,  or  charging  the  property 
with  the  creditor's  demand,  will,  if  fairly  and  honestly  ob- 
tained, conclude  the  cestui  que  trust  as  being  represented 
by  the  trustee,  but  is  subject  to  be  impeached  for  fraud  or 
collusion.^ 

§  138.  Party  having  lien. — It  certainly  is  reasonable,  and 
seems  to  be  recognized  as  an  established  rule,  that  where  a 
party  has  a  lien,  by  way  of  mortgage  for  example,  upon 
the  property  which  is  the  subject  of  contention,  and  no 
ruling  is  asked  against  such  lien,  and  it  is  not  assailed,  but 
the  title  under  it  is  conceded  to  be  valid,  there  is  no  ground 
upon  which  the  holder  of  the  lien  can  be  regarded  as  a  nec- 
essary party  to  the  suit.^  The  creditors,  having  elected  to 
avoid  the  fraudulent  conveyance,  take  the  property  as 
though  the  transfer  had  never  been  made,  and  subject  to 
all  lawful  liens  upon  it.^  But  where  the  lien  holder  is 
made  a  party  to  the  suit,  and  the  validity  of  his  claim  is 
investigated  and  disposed  of  by  the  judgment  adversely  to 
the  validity  of  the  lien,  a  sale  by  the  receiver  will  transfer 
to  the  grantee  a  title  superior  to  such  lien  or  claim. ^ 


'  Rogers  v.  Rogers,  3  Paige  (N.  Y.)        ^  Shand   v.   Hanley,  71   N.  Y.  324. 

379.  See  Chautauqua  Co.  Bank  v.  Risley,  19 

'  Russell  V.  Lasher,  4  Barb.  (N.  Y.)  N.  Y.  372.     Where  a  debtor  has  con- 

232  ;  Wheeler  v.  Wheedon,    9   How.  veyed  property  in   fraud  of  creditors, 

Pr.  (N.  Y.)  300.  and  the  alienee  at  the  debtor's  request 

^  Trego  V.  Skinner,  42  Md.  431.  has  given  a  mortgage  upon  it  to  a 
See  Walter  v.  Riehl,  38  Md.  211;  Yen-  creditor  whose  debt  existed  at  the  date 
able  V.  Bank  of  the  United  States,  2  of  the  conveyance,  the  latter  is  regard- 
Pet.  107  ;  Erfort  v.  Consalus,  47  Mo.  ed  as  a  purchaser  "  for  a  valuable  con- 
213.  Compare  Reynolds  v.  Park,  5  sideration,"  2  R.  S.  N.  Y.  137.  §5; 
Lans.  (N.  Y.)  149  ;  reversed,  53  N.  Y.  and  although  the  conveyance  is  set 
36.  aside  by  other  creditors,  the  lien  of  the 

■•  Hutchinson    v.    Murchie,    74   Me.  mortgage  cannot  be  affected.     Murphy 

190  ;  Avery  v.  Hackley,  20  Wall.  411.  v.  Briggs,  89  N.  Y.  446,  distinguishing 

Compare  Murphy  v.  Briggs,  89  N.  Y.  and  limiting  Wood  v.  Robinson,  22  N. 

446.  Y.  564. 


212  STOCKHOLDERS.  §    1 39 

§  139,  Stockholders. — The  assets  of  a  corporation  are,  as 
we  have  seen,^  regarded  as  a  trust  fund  for  the  payment  of 
its  debts,  and  its  creditors  have  a  lien  upon  it,  and  the  right 
to  priority  of  payment  over  its  stockholders.^  Hence  where 
property  of  a  corporation  had  been  divided  among  its  stock- 
holders before  its  debts  had  been  paid,  the  court  decided 
that  a  judgment-creditor,  with  execution  returned  unsatis- 
fied, could  maintain  an  action  in  the  nature  of  a  creditors' 
bill  against  any  one  stockholder  to  reach  whatever  had 
been  received  by  him,  whether  wrongfully  or  otherwise. 
It  is  unnecessary  to  make  all  the  stockholders  defend- 
ants.^ 

The  question  of  the  statutory  liability  of  stockholders  to 
the  creditors  of  a  corporation  where  the  capital  has  not 
been  all  paid  in  and  a  certificate  to  that  effect  filed  as  re- 
quired by  statute,  has  given  rise  to  much  litigation  in  New 
York  and  other  States  where  such  provisions  exist.  This 
liability  is  said  to  rest  in  contract/  The  statute  in  effect 
withdraws  the  protection  of  the  corporation  from  the  stock- 
holders, and  holds  them  liable  as  copartners.^  If  the  lia- 
bility was  penal  the  statute  could  of  course  have  no  opera- 
tion in  another  State,^  for  penal  statutes  are  strictly  local  in 
their  operations  and  results.^  Hence  it  was  held  that,  as  the 
obligation  imposed  upon  a  stockholder  under  the  New  York 
statute  rested  in  contract,  it  could  be  enforced  in  Florida,^ 


'  See  §§  1 1 7-1 19;  Wait  on  Insolvent  ^  pjash    v.    Conn,    109   U.    S.    371; 

Corps.,  Chap.  VII.  Wiles  v.  Suydam,  64  N.  Y.  173. 

-  Bartlett   v.   Drew,  57  N.  Y.   587  ;  *  Corning   v.    McCullough,   i   N.  Y. 

Upton  V.  Tribilcock,  91  U.  S.  45-47  ;  47. 

Sawyer  v.  Hoag,  17  Wall.  610.  ^  Flash  v.  Conn,  109  U.  S.  376. 

^  Bartlett  v.  Drew,  57  N.  Y.  587.     A  '  See  The  Antelope,  10  Wheat.  66  ; 

stockholder  of  an  insolvent  bank  may  Scoville  v.  Canfield,  14  Johns.  (N.  Y.) 

be  compelled  to  pay  an  unpaid  sub-  338  ;  Western  Transp.  Co.  v.  Kilder- 

scription  to  the  assignee,  and  he  has  house,  87  N.  Y.  430  ;  Lemmon  v.  Peo- 

no  right  to  set  off  the  amount  of  his  pie,  20  N.  Y.  562  ;  Henry  v.  Sargeant, 

deposit  in  the  bank.     Macungie  Sav-  13N.  H.32[;  Story's  Conflict  of  Laws 

ings  Bank  v.   Bastian,  i  Am.  Insolv.  (8th  ed.),  §  621. 

Rep.  484.  "  Flash  v.  Conn,  109  U.  S.  379. 


§   139  STOCKHOLDERS.  213 

the  rule  being  that  a  transitory  action  may  be  brought 
in  any  court  having  jurisdiction  of  the  parties  and  the  sub- 
ject-matter,^ 

'  Dennick  v.  Railroad  Co.,  103  U.  S.  But  it  may  be  noted  that  a  creditors' 

II.     We  cannot  here  venture,  except  bill    may  be  filed   against   a  county, 

incidentally,  into  the  wide  field  regu-  Lyell   v.    Supervisors   of   St.   Clair,    3 

lating  the  remedies  of  creditors  against  McL.    580  ;    Wait   on    Insolv.    Corps. 

insolvent  corporations  or  their  officers.  §111. 
See  Wait  on  Insolv.  Corps.,  Chap.  II. 


CHAPTER   IX. 


COMPLAINT. 


§  140.  Recitals  of  the  complaint, 

141.  Pleading  fraud. 

142.  Evidence  not  to  be  pleaded. 

143.  Alleging  insolvency. 

144.  Allegations  concerning  consider- 

ation. 

145.  Fraudulent  intent, 

146.  Pleading  in  equity. 

147.  Seeking  discovery. 

148.  Excusing    laches — Concealment 

of  fraud. 

149.  Explaining  delay — Discovery  of 

fraud. 


150.  Complaints  bad  for  multifarious- 
ness. 

not     multifa- 


15M 
152.  f 


Pleadings    held 
rious. 

153.  Alternative  relief. 

154.  Attacking      different      convey- 

ances. 
Prayer   of  complaint — Variance 

— Verification. 
Amendment. 

Description — Lis  pe7idens. 
157a.  Change  of    venue — Territorial 

jurisdiction. 


155 

156, 
157 


§  140.  Recitals  of  the  complaint. — To  successfully  impeach 
a  fraudulent  conveyance,  it  ordinarily  devolves  upon  the 
complainants  to  aver  in  the  pleading  that  they  were  credit- 
ors at  the  time  of  the  alienation  in  controversy,^  and  to 
state  against  Vv'hom  the  judgment  proceeded  upon  was  re- 
covered,'^  The  complaint  will  ordinarily  be  considered  de- 
fective unless  it  appears  upon  its  face  that  an  indebtedness 
exists,'^  and  that  the  plaintiff  has  exhausted  his  remedy  at 
law;*  and  such  averments  cannot  usually  be  supplied  by 


'  Merrell  v.  Johnson,  96  111.  230 ; 
Uhre  V.  Melum,  17  Bradw.  (111.)  182; 
Donley  v.  McKiernan,  62  Ala.  34 ; 
Walthall  V.  Rives,  34  Ala.  91,  Com- 
pare Newman  v.  Van  Duyne,  42  N.  J. 
Eq.  485. 

•^  Lipperd  v.  Edwards,  39  Ind.  169. 
See  Chap.  IV.  A  bill  in  chancery  is 
not  good  as  an  attempt  to  set  aside  a 
fraudulent  conveyance,  procured  by  a 
debtor  to  be  made  to  his  daughter,  if 
it  neither  alleges  that  there  is  a  judg- 
ment against  the  father,  nor  that  the 


debt  due  at  the  time  the  conveyance 
was  made  is  still  due,  and  fails  to  pray 
for  such  relief.  Ferguson  v.  Bobo,  54 
Miss.  121. 

^  Elwell  v.  Johnson,  3  Hun  (N.  Y.) 
558;  s.  C.  74  N.  Y.  80. 

*  Beardsley  Scythe  Co.  v.  Foster,  36 
N.  Y.  565.  See  Allyn  v.  Thurston,  53 
N.  Y.  622 ;  Suydam  v.  Northwestern 
Ins,  Co.,  51  Pa.  St.  394;  Scott  v.  Mc- 
Farland,  34  Miss.  363  ;  Cassidy  v. 
Meacham,  3  Paige  (N.  Y.)  311.  See 
Chap.  IV. 


§    140  RECITALS    OF    THE    COMPLAINT.  215 

an  allegation  of  a  total  want  of  property/  or  the  useless- 
ness  of  an  execution,'^  and,  if  it  does  not  appear  that  the 
execution  was  issued  to  the  county  of  the  debtor's  resi- 
dence, or  other  proper  county,  the  complaint  is  not  aided 
by  an  averment  that  it  was  returned  unsatisfied.^  Accord- 
ing to  some  of  the  cases  it  is  not  sufficient  to  entitle  the 
creditor  to  the  aid  of  a  court  of  equity  merely  to  show  that 
the  debtor  made  a  fraudulent  disposition  of  a  portion  of 
his  property.  The  complainant  must  set  forth  that  the 
alienation  of  property  complained  of  embarrassed  him  in 
obtaining  satisfaction  of  his  debt,  "for  if  the  debtor  has 
other  property  subject  to  the  judgment  and  execution  suf- 
ficient to  satisfy  the  debt,  there  is  no  necessity  for  the 
creditor  to  resort  to  equity."*  The  bill  should  recite  facts 
sufficient  to  indicate  that  the  judgment  cannot  be  collected 
without  equitable  aid.^  This  averment  is  material,  and  a 
decree  upon  proofs  without  this  necessary  allegation  is  said 
to  be  erroneous,  since  "the  defendant  cannot  be  required 
to  meet  and  overcome  evidence  not  responsive  to  the 
pleadings."^  It  may  be  here  observed  concerning  the  rules 
of  pleading,  that,  generally  speaking,  it  is  the  right  of  an 
antagonistic  defendant  to  have  all   the  material  facts  on 


'  See  McElwain  v.  Willis,  9  Wend.  Randolph  v.  Daly,  16  N.  J.  Eq.  317, 

(N.  Y.)   548  ;    Crippen  v.  Hudson,   13  the  court  said  :  "  It  is  not  necessary  to 

N.  Y.   165  ;    Beardsley  Scythe  Co.  v.  aver  that  the  firm  is  insolvent  in  order 

Foster,  36  N.  Y.  565.  to  entitle  the  complainants   to   relief. 

■■'  Adsit  V.  Sanford,  23  Hun  (N.  Y.)  The  partnership  property  may  be  amply 

45.  sutficient  to  satisfy  all  the  debts  of  the 

^  Payne  v.  Sheldon,  63  Barb.  (N.  Y.)  firm,  yet  it  may  be  so  covered  up,  or 

176.  placed  beyond  the  reach  of  process,  as 

■*  Dunham  v.  Cox,  10  N.  J.  Eq.  467.  not   to   be  amenable   to  execution   at 

^  Emery    v.   Yount,    i    West   Coast  law,  and  to  render  the  interference  of 

Rep.  499;  S.    C.    7    Col.   109.      In   an  equity  essential  to  the  ends  of  justice. 

action    to   set  aside   a  conveyance  of  All    that  can    be    required    is,    that    it 

land   upon   the   ground   of    fraud    the  should  appear  by  the  bill  that  the  com- 

complaint    should    aver    the    delivery  plainant  has  exhausted  his  remedy  at 

of  the  deed  claimed  to  be  fraudulent,  law,  and  that  the  aid  of  this  court  is 

Doerfler  v.  Schmidt,  64  Cal.  265.  necessary  to  enable  him  to  obtain  sat- 

'■  Thomas  v.  Mackey,  3  Col.  393.    In  isfaction  of  his  judgment." 


2l6  PLEADING    FRAUD.  §    H^ 

which  relief  is  sought  specifically  set  forth  in  the  bill,  to 
the  end  that  such  facts  may  be  admitted  or  controverted 
by  the  answer  and  testimony  ;  and  usually  no  proofs  will 
be  admitted  unless  secundum  allegata}  Hence,  where  it  is 
the  purpose  of  the  complainants  to  seek  relief  for  creditors 
other  than  themselves,  such  intention  should  be  manifested 
by  suitable  averments  in  the  bill. 

§  141.  Pleading  fraud. — Fraud  has  been  said  in  a  general 
t-^  way  to  be  a  conclusion  of  law,  though  perhaps,  more  cor- 
rectly speaking,  it  is  the  judgment  of  law  upon  facts  and 
intents.^  A  mere  general  averment  that  a  deed  was  fraud- 
ulent, or  that  it  was  made  with  the  intent  to  hinder,  delay, 
or  defraud  creditors,  has  been  regarded  as  an  insufficient 
method  of  pleading.  Peckham,  J.,  has  said  :  "  Mere  gen- 
eral allegations  of  fraud  or  conspiracy  are  of  no  value  as 
stating  a  cause  of  action."  ^  There  must,  ordinarily,  be 
averments  of  the  facts  which  constitute  the  fraud,  or  which 
tend  to  support  the  conclusion.*  Relief  will  not  be  af- 
forded upon  the  ground  of  fraud  unless  it  be  made  a  dis- 
tinct allegation  in  the  bill,  so  that  it  may  be  put  in  issue 
by  the  pleadings.^  In  Flewellen  v.  Crane,^  the  averments 
were  that  a  conveyance,  purporting  on  its  face  to  be  made 
in  payment  of  a  debt  due  from  the  grantor  to  the  grantee, 
was  "  fraudulent  and  void  as  against  pre-existing  creditors," 
and  that  it  was  "  made  with  the  intent  to  hinder,  delay,  or 
defraud  said  creditors.'"''     There  was  no  avernrient  impeach- 

'  Burt  V.  Keyes,  i  Flipp.  72.     Uncer-  bert  v.  Lewis,  i  De  G.,  J.  &  S.  49 ; 

tainty  in  a  pleading  should  be  reached  Myers   v.   Sheriff,    21    La.    Ann.    172  ; 

by  motion.     Moorman  v.  Shockney,  95  Rhead   v.    Hounson,    46    Mich.    246 ; 

Ind.  88.  Jones  v.  Massey,  79  Ala.  370. 

^  See  §  13.  '  Patton   v.   Taylor,    7    How.    159; 

^  Wood  V.  Amory,   105  N.  Y.  282 ;  Noonan  v.  Lee,  2  Black  508 ;  Voorhees 

citing  Van  Weel  v.  Winston,  1 15  U.  S.  v.  Bonesteel,  16  Wall.  29  ;  Beaubien  v. 

228  ;  Cohn  v.  Goldman,  76  N.  Y.  284;  Beaubien,  23  How.  190. 

Knapp  V.  City  of  Brooklyn,  97  N.  Y.  ^  58  Ala.  627. 

520.  '  See   Rowland  v.  Coleman,  45  Ga. 

^Pickett   V.    Pipkin,    64    Ala.    523;  204;     Meeker    v.     Harris,     19     Cal. 

Flewellen  v.  Crane,  58  Ala.  627  ;  Gil-  278. 


§    141  PLEADING    FRAUD.  21 7 

ing  the  adequacy  or  bona  fides  of  the  consideration  ex- 
pressed ;  nor  asserting  that  the  debt  was  not  justly  due 
from  the  grantor  to  the  grantee  ;  no  setting  up  a  secret 
trust  for  the  grantor.  The  pleading  was  declared  insuffi- 
cient to  support  a  final  decree,  rendered  upon  a  decree  pro 
confcsso,  which  adjudged  the  conveyance  void  for  fraud. 
The  rule  is  that  the  facts  upon  which  the  fraud  is  j)redi- 
cated  cannot  be  left  to  inference,  but  must  be  distinctly 
and  specifically  averred.^  If  a  bill  is  filed  to  set  aside  a 
deed  upon  the  ground  of  undue  influence,  it  is  not  neces- 
sary to  allege  every  fact  showing  the  actual  exercise  of  un- 
due influence,  but  the  relations  of  the  parties  ought  to  be 
stated,  and  the  general  fact  of  undue  influence  alleged,  and 
some  specific  instances  given  from  which  the  court  could 
infer  it."^  The  common-law  rule  was  clearly  settled  that 
fraud  must  be  distinctly  alleged  and  as  distinctly  proved, 
and  that  it  was  not  allowable  to  leave  fraud  to  be  inferred 
wholly  from  the  facts.  While  it  may  not  be  absolutely 
essential  to  employ  the  word  "  fraud  "  in  the  pleading,  yet 
the  facts  stated  should  show  distinctly  that  fraud  is  charged.^ 
The  New  York  Court  of  Appeals  say  that  the  use  of  the 
word  "fraud"  or  *'  fraudulent,"  in  order  to  characterize  the 
transaction,  or  specify  the  ground  of  relief,  is  not  abso- 
lutely necessary.'*  Where  the  circumstances  are  such  as  do 
not  warrant  the  court  in  avoiding  the  transaction  in  toto, 
it  may  be  avoided  as  an  absolute  conveyance,  and  permit- 
ted to  stand  as  a  security  ;°  but  such  relief  cannot  be  af- 
forded unless  the  complaint  contains  allegations    adapted 


'  Thomas   v.    Mackey,    3  Col.   393 ;  ■•  Whittlesey  v.  Delaney,  73   N.  Y. 

Small  V.   Boudinot,  9   N.  J.   Kq.  391  ;  575  ;  Warner  v.  Blakeman,  4  Abb.  Ct. 

Klein  v.  Horine,  47  111.  430 ;    Bryan  v.  App.    Dec.    (N.    Y.)    530;    Maher  v. 

Spruill,  4  Jones'  Eq.  (N.  C.)  27;  On-  Hibernia  Ins.  Co..  67  N.  Y.  283.     See 

tario  Bank  v.  Root,  3  Paige   (N.  Y.)  Hamlcn     v.    McGillicuddy,     62     Me. 

478.  268. 

-  I  Drewry's  Eq.  PI.  15.  '  Bigelow  v.  Ayrault,  46  Barb.  (N. 

'  See  Davy  v.  Garrett,  7  Ch.  D.  489  ;  Y.)  143;  May  on  Fraudulent  Convey- 

Smith  V.  Kay,  7  H.  L.  Cas.  763.  ances,  p.  235.     See  §  51. 


2l8  EVIDENCE    NOT    TO    BE    PLEADED.         §§   I42,   I43 

thereto/  An  averment  of  an  intent  to  defraud  is  one  of 
fact,  and  not  a  statement  of  a  conclusion  of  law.^  It  must 
be  alleged  as  well  as  proved,^  and  it  maybe  directly  testified 
to  as  a  fact.'* 

§  142.  Evidence  not  to  be  pleaded. — General  certainty  is 
sufficient  in  pleading  in  equity  ;  and  though  a  mere  gen- 
eral charge  of  fraud  is  insufficient,  it  is  not  to  be  under- 
stood that  the  particular  facts  and  circumstances  which 
confirm  or  establish  it  should  be  minutely  charged.^  It  is 
not  necessary,  or  proper,  that  pleadings  at  law  or  in  equity 
should  be  incumbered  with  all  the  matters  of  evidence  the 
complainant  may  intend  to  introduce.^  A  general  averment 
of  facts — not  of  conclusions  of  law—upon  which  the  rights 
of  the  parties  depend,  is  sufficient.  By  the  elementary 
rules  of  pleading  facts  may  be  pleaded  according  to  their 
legal  effect,  without  setting  forth  the  particulars  that  lead 
to  it ;  and  necessary  circumstances  implied  by  law  need  not 
be  expressed  in  the  plea.'''  So  much  of  the  complaint,  how- 
ever, as  sets  out  in  detail  the  inceptive  steps  which  culmi- 
nated in  the  alleged  fraudulent  conveyance,  is  not  irrelevant 
or  redundant  matter.^ 

§  143.  Alleging  insolvency. — As  elsewhere  shown,  a  volun- 
tary conveyance  is  not  generally  regarded  as  fraudulent /^r 


'  Van  Wyck  v.  Baker,  16  Hun  (N.  which  necessarily  tend  to  hinder,  de- 

Y.)  171.  lay,  and  defraud  creditors,  these  pro- 

°  Piatt  V.  Mead,  9  Fed.  Rep.  91.  visions  are  conclusive  evidence  of  the 

^  Genesee  River  Nat.  Bank  w  Mead,  design  of  the  parties  to  the  instrument. 

18  Hun  (N.  Y.)  303.  .  .   .  .  It  is  not  necessary  in  pleading 

■*  Clarke  v.  Roch.  &  S.  R.R.  Co.,  14  to  point  out  the  particular  features  or 

N.  Y.  570.     "  The  complaint  contains  clauses  of  the  instrument  which  are  ob- 

a  distinct  charge  that  the  assignment  jected  to."     Jessup  v.  Hulse,  29  Barb, 

was  made  to  hinder,  delay,  and  defraud  (N.  Y.)   541;  reversed,  21   N.  Y.  168, 

the  creditors  of  the  assignor,  and  that  on  another  point, 

it   is   therefore   fraudulent    and    void.  *  Story's  Eq.  PI.  §  252. 

This  is  unexceptionable  and  sufficient  ^  Zimmerman  v.  Willard,  114  111.  370. 

pleading,  luhcre  the  vice  of  the  instrii-  ~'  Sullivan  v.  Iron  &  Silver  Alining  Co., 

^fient  is  inherent  itt  its  terms.     When  109  U.  S.  555. 

an     assignment     contains     provisions  "  Perkins  v.  Center,  35  Cal.  714. 


§   143  ALLEGING    INSOLVENCY.  2I9 

se}  If  a  debtor  is  perfectly  solv^ent,  he  can  do  what  he 
will  with  his  property  so  long  as  he  does  not  dispose  of  so 
much  of  it  as  to  disable  him  from  paying  his  debts.  This 
is  a  rule  of  pleading  as  well  as  of  evidence.  Hence  a  bill 
which  contained  no  allegation  that  the  debtor  at  the  time 
of  the  alienation  was  insolvent  or  embarrassed,  was  held 
bad,^  for  it  is  only  when  an  inadequate  amount  of  property 
remains  that  creditors  have  the  legal  right  to  complain.^ 
The  court  said  that,  for  aught  that  appeared  in  the  plead- 
ing, the  debtor  might  have  been  possessed  of  ample  means, 
other  than  the  property  in  controversy,  to  pay  his  debts  ; 
and  in  such  a  case  the  conveyance  is  not  ordinarily  open  to 
the  attack  of  creditors. 

A  man  is  said  to  be  insolvent  "  w^hen  he  is  not  in  a  con- 
dition to  pay  his  debts  in  the  ordinary  course,  as  persons 
carrying  on  trade  usually  do,"'*  or  when  all  his  obligations 
could  not  be  collected  by  legal  process  out  of  his  own 
means.^  A  complaint  which  states  that  "  the  said  W.  L.  J., 
at  the  time  of  making  said  deed,  did  not  have  sufficient 
property  remaining,  subject  to  execution,  to  pay  all  his  said 
debts,  but  by  means  of  said  conveyance  rendered  himself, 
wholly  insolvent,  and  has  not  now  nor  has,  at  any  time 
since  said  conveyance,  had  sufficient  property,  subject  to 
execution,  out  of  which  said  debts  could  be  made,"  is  suf- 
ficient.^ 

'  Young  V.  Heermans,  66  N,  Y.  374  ;  Hines,  72  Ind.  12  ;  Whitesel  v.  Hiney, 

Holden    v.    Burnham,   63   N.  Y.   75 ;  62  Ind.  168. 

Thomas  v.  Mackey,  3  Col.  390.     See        ■*  Shone   v.    Lucas,   3  Dowl.  &   Ry. 

§  208.  218. 

'^  Burdsall  v.  Waggoner,  4  Col.  261.         *  Herrick   v.    Borst,  4  Hill   (N.  Y.) 

See  Merrell  v.  Johnson,  96  111.   230;  652;  Potter  v.  McDowi-ll,  31  Mo.  73. 
McCole  V.  Loehr,  79  Ind.431  ;  Spauld-         *  Jennings  v.  Howard,  80  Ind.  216. 

ing   V.  Blythe,  73   Ind.  93  ;    Noble  v.  See  Price  v,  Sanders,  60  Ind.  310.     It 

Hines,  72  Ind.  12  ;  Sherman  v.  Hog-  is  said  by  Danforth,  J.,  in  an  important 

land,  54  Ind.  578,  584  ;  King's  Heirs  case   before   the   New  York  Court  of 

V.  Thompson,  9  Pet.  204  ;  Warner  v.  Appeals,  Van  Dyck  v.  McQuadc,  86  N. 

Dove,  33  Md.  579.  Y.  44 :  "  .^.n  individual  may  purchase 

'  Lee  V.  Lee,  77  Ind.  253.     See  Piatt  property,  contract  debts,  incur  new  lia- 

V.  Mead,  9  Fed.  Rep.  91  ;   Noble  v.  bilities,  and  keep  on  in  business,  al- 


2  20  FRAUDULENT    INTENT.  §§    1 44- I 46 

§  144.  Allegations  concerning  consideration. — As  regards 
allegations  of  consideration,  the  bill  will  be  upheld  if  it  dis- 
tinctly recites  either  of  three  things  :  First,  that  the  con- 
veyance was  wholly  without  consideration  ;  second,  that  it 
was  fraudulent  and  there  was  a  consideration  which,  in 
cases  of  technical  or  constructive  fraud,  the  complainant 
was  willing  to  allow  or  has  offered  to  return  ;  or  third,  that 
the  complainant  is  not  informed  and  has  no  means  of  ascer- 
taining whether  there  was  a  consideration,  and  that  these 
facts  are  peculiarly  within  the  defendant's  knowledge.  In 
this  latter  case  the  bill  should  pray  for  a  discovery.^ 

§  145.  Fraudulent  intent. — It  is  usually  of  vital  importance 
that  the  creditor  should  allege  in  the  bill  that  the  convey- 
ance attacked  was  made  with  the  intent  to  hinder,  delay,  or 
defraud  creditors.^  The  effect  of  intent,  as  related  to  fraud- 
ulent alienations,  is  elsewhere  made  a  special  subject  of 
discussion.^  We  may  here  observe  that  an  averment  to  the 
effect  that  the  grantee,  the  debtor's  wife,  gave  no  consider- 
ation, and  that  the  whole  consideration  came  from  the 
debtor,  sufficiently  shows  bad  faith  or  fraudulent  intent  on 
her  part* 

§  146.  Pleading  in  equity. — The  plaintiff's  title  and  claim 
to  the  assistance  of  a  court  of  equity  must  always  be  ex- 
posed by  the  pleadings  ;  but  the  style  and  character  of 
pleading  in  equity  has  always  been  of  a  more  liberal  cast 
than  is  permitted  in  other  courts,^  as  mispleading  in  matter 
of  form  has  never  been  held  to  prejudice  a  party,  provided 


though  he  has  debts  unpaid  ;  and  if  he  Ch.  [N.  Y.]  513 ;  Hodges  v.  New  Eng- 

does  this  in  good  faith  and  hope  of  a  land  Screw  Co.,  i  R.  I.  312)." 

more   prosperous   fortune,  he  violates  '  Des  Moines  &  M.  R.  Co.  v.  Alley, 

no  moral  or  legal  duty.     And  this  is  16  Fed.  Rep.  733.     See  §  147. 

so,  although  at  the  time  of  purchase  he  *  See  Morgan  v.  Bogue,  7  Neb.  434. 

is  aware  that  his  property  is  not  sufii-  See  §§  9,  10,  11. 

cient  to  pay  his  debts  (Nichols  v.  Pin-  ^  gee  Chap.  XIV.     See  §§  9,  10,  1 1. 

ner,  18  N.  Y.  295).     The  principle  of  ^  Newman  v.  Cordell,  43  Barb.  (N. 

this  rule  applies  to  the  managers  of  Y.)  448. 

corporations  (Scott  v.  Depeyster,  i  Edw.  *  See  §  60. 


§§147.14^       SEEKING  DISCOVERY. EXCUSIxNG  LACHES.         221 

the  whole  case  is  just  and  right  in  matter  of  substance,  and 
supported  by  proper  evidence.^  As  a  creditors'  bill  is  often 
brought  for  a  discovery  as  well  as  for  relief,  the  complain- 
ant is  at  liberty  to  avail  himself  of  any  objections  to  pro- 
ceedings on  the  part  of  the  defendant  affecting  his  rights, 
even  though  not  specified  or  charged  in  the  bill.  This  rule 
results  from  the  necessity  of  the  case,  as  a  creditor  cannot 
be  supposed  to  be  thoroughly  acquainted  with  the  conduct 
of  his  debtor  toward  third  persons,  especially  when,  as  is 
generally  the  case  in  fraudulent  transactions,  efforts  have 
been  made  to  conceal  the  circumstances  from  the  public.^ 

§  147.  Seeking  discovery. —  The  complainant,  especially  if 
he  is  prosecuting  in  a  representative  capacity,  as.  for  instance, 
an  assignee  in  bankruptcy,  in  seeking  to  set  aside  a  fraudu- 
lent conveyance  of  real  and  personal  property,  has  the 
right,  as  ancillary  to  the  principal  relief,  to  have  a  discovery 
from  the  defendants,  and  he  properly  seeks  it  with  a  view 
to  supply  the  deficiency  in  his  own  knowledge  ;  and  his 
ignorance  of  the  particulars  sought  not  only  entitles  him 
to  the  discovery,  but  excuses  the  want  of  more  precise 
specification  of  the  particular  fraud  alleged.^ 

§  148.  Excusing  laches — Concealment  of  fraud.  — It  fre- 
quently becomes  vitally  important  to  excuse,  by  appropri- 
ate recitals  in  the  bill,  apparent  laches  on  the  part  of  the 
creditor  in  commencing  the  suit.  In  Forbes  v.  Overby,* 
which  was  a  bill  filed  by  an  assignee,  charging  fraud  and 
conspiracy,  and  praying  for  a  discovery  and  disclosure,  the 
defendants  contended,  upon  a  motion  to  dissolve  an  injunc- 
tion, that  the  bill  was  insufficient  in  form  and  sul)stance. 


•  Tiernan  v.  Poor,  i  Gill  &  J.  (Md.)  190,  per  Woodruff,  J.     See  Howden  v. 

216  ;  s.  C.  19  Am.  Dec.  225.     See  §  60.  Johnson,  107  U.  S.  263.  per  Blatchford, 

Ridgely  v.  Bond,  18  Md.  450  ;  Warner  J. ;  Ex  parte  Boyd,  105  U.  S.  653,  655  ; 

V.  Blakeman,  4  Keyes  (N.  Y.)  507.  Hendricks  v.  Robinson,  2  Johns.  Ch. 

«  Burtus  V.  Tisdall,  4  Barb.'(N.  Y.)  (N.  Y.)   283;   Mounlford  v.  Taylor,  6 

580.             ,  Ves.  Jr.  788. 

'  Verselius  v.  Verselius,  9  Blatchf.  •*  4  Hughes,  441,  444. 


2  22  EXCUSING    LACHES.  §   I48 

and  ought  to  be  dismissed  ;  first,  because  of  complainant's 
laches  in  bringing  this  suit  (it  having  been  brought  within 
a  year  from  the  discovery  of  the  clue  to  the  fraud)  ;  and 
second,  because  the  bill  failed  to  set  forth  specifically  the 
impediments  to  an  earlier  prosecution  of  the  claim.  It 
was  objected  that  the  bill  did  not  explain  why  the  com- 
plainant had  remained  in  ignorance  of  his  rights,  and  that 
it  failed  to  recite  the  methods  employed  by  defendants  to 
fraudulently  keep  the  complainant  in  such  ignorance  ;  and 
that  it  did  not  disclose  how  and  when  the  complainant  first 
came  to  a  knowledge  of  the  matters  alleged  as  the  basis  of 
the  suit.  The  court  observed  that  there  had  been  a  great 
variety  of  decisions  upon  the  question  as  to  what  lapse  of 
time  was  sufficient  to  bar  cases  of  this  character,  and  de- 
clared the  general  rule  to  be  that  each  suit  must  be  gov- 
erned by  its  own  peculiar  circumstances.  The  case  under 
consideration,  being  a  bill  for  a  discovery,  was  distin- 
guished by  the  court,  on  that  ground,  from  Badger  v. 
Badger,^  and  it  was  said  that  a  court  would  not  compel  a 
complainant,  who  was  manifestly  ignorant  of  the  particu- 
lars of  a  fraud,  to  set  out  in  his  bill  the  very  particulars 
concerning  which  a  disclosure  was  sought. 

Lord  Erskine  said  :  "  No  length  of  time  can  prevent  the 
unkennelling  of  a  fraud."  In  Alden  v.  Gregory,^  Lord 
Northington  exclaims  :  "  The  next  question  is  in  effect 
whether  delay  will  purge  a  fraud  ?  Never  while  I  sit  here  ! 
Every  delay  arising  from  it  adds  to  the  injustice,  and  mul- 
tiplies the  oppression."  Mr.  Justice  Story  stated  the  rule 
as  follows  :^  "It  is  certainly  true  that  length  of  time  is  no 
bar  to  a  trust  clearly  established  ;  and  in  a  case  where 
fraud  is  imputed  and  proved,  length  of  time  ought  not, 
upon  principles  of  eternal  justice,  to  be  admitted  to  repel 
relief.     On  the  contrary,  it  would  seem  that  the  length  of 


'  2  Wall.  87,  and  infra.  ^  Prevost  v.  Gratz,  6  Wheat.  497. 

-  2  Eden,  285. 


§149  EXPLAINING    DELAY.  223 

time  during  which  the  fraud  has  been  successfully  con- 
cealed and  practiced  is  rather  an  aggravation  of  the  offense, 
and  calls  more  loudly  upon  a  court  of  equity  to  give  ample 
and  decisive  relief."  It  must  be  remembered,  however : 
First,  that  the  trust  must  be  **  clearly  established";  second, 
that  the  facts  must  have  been  fraudulently  and  successfully 
concealed  by  the  trustee  from  the  knowledge  of  the  cestui 
que  trust}  Long  acquiescence  and  laches  by  parties  out 
of  possession,  are  productive  of  much  hardship  and  injus- 
tice to  others,  and  cannot  be  excused  but  by  showing  some 
actual  hindrance  or  impediment  caused  by  the  fraud  or 
concealment  of  the  parties  in  possession  which  will  appeal 
to  the  conscience  of  the  chancellor.  The  party  who  makes 
such  an  appeal  should  set  forth  in  his  bill  specifically  what 
the  impediments  to  an  earlier  prosecution  of  his  claim  were, 
how  he  came  to  be  so  long  ignorant  of  his  rights,  and  the 
means  used  by  the  respondent  to  fraudulently  keep  him  in 
ignorance  ;  and  how  and  when  he  first  came  to  a  knowl- 
edge of  the  matters  alleged  in  the  bill.  Otherwise  the 
courts  will  not  grope  after  the  truth  of  facts  involved  in 
the  mists  and  obscurity  consequent  upon  a  great  lapse  of 
time. 

§  149.  Explaining  delay — Discovery  of  fraud. — In  cases 
where  it  is  sought  to  avoid  the  statute  of  limitations,  or 
rather  to  come  within  the  exception  to  it,  the  plaintiff  has 
been  held  to  stringent  rules  of  pleading  and  evidence. 
"  Especially  must  there  be  distinct  averments  as  to  the  time 
when  the  fraud,  mistake,  concealment,  or  misrepresentation 
was  discovered,  and  what  the  discovery  is,  so  that  the  court 
may  clearly  see  whether,  by  ordinary  diligence,  the  dis- 
covery might  not  have  been  before  made."^  This  is  neces- 
sary to  enable  the  defendant  to  meet  the  fraud  and  disprove 


'  Badger  v.  Badger,  2  Wall.  92.  National  Bank  v.  Carpenter,  loi  U.  S. 

^  Wood  V.  Carpenter,  loi  U.  S.  140;     567;  Rosenthal  v.  Walker,   11 1    U.  S. 

Stearns   v.  Page,   7    How.   819,   829;     190  ;  Wollensak  v.  Reiher,  115  U.S.  96. 


224  DISCOVERY    OF    FRAUD.  §   I49 

the  alleged  time  of  its  discovery.-^  A  general  allegation  of 
ignorance  at  one  time,  and  of  knowledge  at  another,  is  of 
no  effect.  If  the  plaintiff  made  any  particular  discovery,  it 
should  be  stated  when  it  was  made,  what  it  was,  how  it 
was  made,  and  why  it  was  not  made  sooner.^  Fraud  that 
will  arrest  the  running  of  the  statute  must  be  secret  and 
concealed,  and  not  patent  or  known. ^  The  party  seeking 
to  elude  the  statute  by  reason  of  fraud  must  aver  and  show 
that  he  used  due  diligence  to  detect  it ;  and  if  he  had  the 
means  of  discovery  in  his  power  he  will  be  held  to  have 
known  it.^  In  Cole  v.  McGlathry^  it  appeared  that  the 
plaintiff  had  provided  the  defendant  with  money  to  pay 
certain  debts.  The  defendant  falsely  affirmed  that  he  had 
paid  them,  and  fraudulently  kept  possession  of  the  money. 
It  was  decided  that  the  plaintiff  was  not  entitled  to  recover 
for  the  reason  that  he  had  at  all  times  the  means  of  discov- 
ering the  truth  of  the  statements  by  making  inquiries  of 
the  parties  who  should  have  received  the  money.  This 
principle  is  further  illustrated  in  the  analogous  case  of  Mc- 
Kown  V.  Whitmore,^  in  which  it  appeared  that  the  plaintiff 
had  handed  the  defendant  money  to  be  deposited  for  the 
plaintiff  in  bank.  The  defendant  told  the  plaintiff  that  he 
had  made  the  deposit.  It  was  held  that  even  though  the 
statement  was  false,  and  made  with  a  fraudulent  design,  the 
plaintiff  could  not  recover  because  he  might  at  all  times 
have  inquired  at  the  bank  and  learned  the  truth. '^     In  Boyd 

1  Moore    v.    Greene,    19   How.   72;  Glover,  21  Wall.  342  ;  Gifford  v.  Helms, 

Beaubien    v.   Beaubien,    23    Id.    190;  98  U.  S.  248;  Upton  v.  McLaughlin, 

Badger  v.  Badger,  2  Wall.  95.  105  U.  S.  640. 

-  Carr  v.  Hilton,  i  Curt.  C.  C.  230.  *  Buckner  v.  Calcote,  28  Miss.  432, 

'  Martin  v.  Smith,  i  Dill.  85.     This  434.      See  Nudd  v.  Hamblm,  8  Allen 

case  contains  a  full  review  of  the  au-  (Mass.)    130.       Compare   Baldwin   v. 

thorities.     See  also  McLain  v.  Ferrell,  Martin,  35  N.  Y.  Super.  Ct.  98  ;  Barlow 

I  Swan  (Tenn.)  48;   Buckner  v.  Cal-  v.  Arnold,  6  Fed.  Rep.  355;  Erickson 

cole,  28  Miss.  432  ;    Cook  v.  Lindsey,  v.  Quinn,  3  Lans.  (N.  Y.)  302. 

34  Miss.  451 ;  Phalen  v.  Clark,  19  Conn.  ^  9  Me.  131. 

421  ;  Moore  v.  Greene,  2  Curt.  C.  C.  ®  31  Me.  448. 

202,  affi'd   19  How.  69,  72;  Rosenthal  '  See,  further.  Rouse  v.  Southard,  39 

V.  Walker,    in   U.  S.   189;  Bailey  v.  Me.  404. 


§   150  COMPLAINTS    BAD    FOR   MULTIFARIOUSNESS.  225 

V.  Boyd,^  it  was  ruled  that  the  concealment  which  would 
avoid  the  statute  must  go  beyond  mere  silence.  It  must 
be  something  done  to  prevent  discovery.  The  conceal- 
ment must  be  the  result  of  positive  acts.^  An  allegation 
that  the  defendants  pretended  and  professed  to  the  world 
that  the  transactions  were  bona  fide  was  looked  upon  as  be- 
ing too  general.  In  Wood  v.  Carpenter,^  a  pleading  which 
read  as  follows :  "  And  the  plaintiff  further  avers  that  he 
had  no  knowledge  of  the  facts  so  concealed  by  the  defend- 
ant until  the  year  a.d.  1872,  and  a  few  weeks  only  before 
the  bringing  of  this  suit,"  was  held  to  be  clearly  bad.  The 
court  in  this  case,  in  a  critical  and  exhaustive  opinion,  re- 
view many  of  the  cases  which  have  just  been  considered, 
and  then  observe  that  a  wide  and  careful  survey  of  the  au- 
thorities leads  to  the  following  conclusions :  First,  the  fraud 
and  deceit  which  enabled  the  offender  to  do  the  wrong  may 
precede  its  perpetration.  The  length  of  time  is  not  mate- 
rial, provided  there  is  the  relation  of  design  and  its  con- 
summation. Second,  concealment  by  mere  silence  is  not 
enough.  There  must  be  some  trick  or  contrivance  i?i- 
te?ided  to  exclude  suspicion  and  prevent  inquiry.  Third, 
there  must  be  reasonable  diligence,  and  the  means  of 
knowledge  are  the  same  thing  in  effect  as  knowledge  itself. 
Fourth,  the  circumstances  of  the  discovery  must  be  fully 
stated  [pleaded]  and  proved,  and  the  delay  which  has  oc- 
curred must  be  shown  to  be  consistent  with  the  requisite 
diligence.* 

§  150.  Complaints  bad  for  multifariousness. — Judge  Story 
says  that  multifariousness  is  "  the  improperly  joining  in  one 
bill   distinct  and  independent    matters,   and  thereby    con- 


'  27  Ind.  429.  fraudulent  intent  is  drawn,  is  the  ab- 

■  Stanley  v.  Stanton,  36  Ind.  445.  sence  of  any  valuable  consideration  for 

^  loi  U.  S.  135.  the  conveyance.     So  long  as  the  cred- 

■»  In  Erickson  v.  Quinn,  47  N.  Y.  413,  itor  was  ignorant  of  that  essential  and 

Rapallo,  J.,  said:    "The  fundamental  controlling  fact,  the  statute  ought  not 

fact  from  which  the   conclusion  of  a  to  run  against  him." 

15 


2  26  COMPLAINTS    BAD    FOR    MULTIFARIOUSNESS.  §   I50 

founding  them  ;  as,  for  example,  the  uniting  in  one  bill  of 
several  matters,  perfectly  distinct  and  unconnected,  against 
one  defendant,  or  the  demand  of  several  matters  of  a  dis- 
tinct and  independent  nature  against  several  defendants  in 
the  same  bill."^     "  What  is  more  familiarly  understood  by 
multifariousness  as  applied  to  a  bill,  is  where  a  party  is 
brought  as  a  defendant  upon  a  record,  with  a  large  portion 
of  which,  and  of  the  case  made  by  which,  he  has  no  con- 
nection whatsoever."  ^     In  United  States  v.  Bell  Telephone 
Company,^  Mr.  Justice   Miller  used  these   words:    "The 
principle  of  multifariousness  is  one  very  largely   of   con- 
venience, and  is  more  often  applied  where  two  parties  are 
attempted  to  be  brought  together  by  a  bill  in  chancery  who 
have  no  common  interest  in  the  litigation,  whereby  one 
party  is  compelled  to  join  in  the  expense  and  trouble  of  a 
suit  in  which  he  and  his  co-defendant  have  no  common  in- 
terest, or  in  which  one  party  is  joined  as  complainant  with 
another  party  with  whom  in  like  manner  he  either  has  no 
interest  at  all,  or  no  such  interest  as  requires  the  defendant 
to  litigate  it  in  the  same  action."'*     The  authorities  bearing 
upon  this  question  are  very  numerous,  but  there  is  deduci- 
ble  from  them  all  no  positive  inflexible  rule  as  to  what,  in 
the  sense  of  courts  of  equity,  constitutes  multifariousness, 
which  is  fatal  on  demurrer.^     Indeed  it  seems  to  be  gener- 
ally recognized  as  an  impossibility  to  formulate  a  general 
rule  as  to  what  is  considered  multifariousness ;  every  case 
must  be  governed  by  its  own  circumstances,  and  the  court 
must  exercise  a  sound  discretion  on  the  subject.^     The  rule 

>  Story's  Ex.  PI.  §  271,      See  Walker  Knye  v.  Moore,  i  Sim.  &  S.  61 ;  Ken- 

V.  Powers,  104  U.  S.  251.  sington  v.  White,  3  Price  164  ;  Corn- 

■^  Story's  Eq.  PI.  §  530.      See  Camp-  well  v.  Lee,  14  Conn.  524 ;  Middletown 

bell  V.  Mackay,  i  Mylne  &  Cr.  617.  Sav.  Bank  v.  Bacharach,  46  Conn.  522. 

3128U.  S.  352.  ^Gaines    v.    Chew,    2    How.    619; 

*  Citing  Oliver  v.  Piatt,  3  How.  333 ;  Oliver  v.  Piatt,  3  How.  333.     See  Mc- 

Walker  V.  Powers,  104  U.  S.  245.  Lean   v.    Lafayette   Bank,    3  McLean 

^  DeWolf  v.  Sprague  Mfg.  Co.,   49  415  ;  Abbot  v.  Johnson,  32  N.  H.  26; 

Conn.  292.     See  generally  Att'y  Gen-  Carter  v.  Kerr,  8  Blackf.  (Ind.)  373  ; 

eral   v.   Cradock,  3   Mylne  &  Cr.  85 ;  Butler  v.  Spann,  27  Miss.  234 ;  Brown 


§151  PLEADINGS    HELD    NOT    MULTIFARIOUS.  227 

in  relation  to  multifariousness,  say  the  Supreme  Court  in 
Iowa,  is  one  of  convenience,  and  though  the  matters  set 
forth  in  the  pleading  are  distinct,  yet  if  justice  can  be 
administered  between  the  parties  without  a  multiplicity 
of  suits,  the  objection  will  not  prevail.^  The  objection 
that  the  bill  is  multifarious  is  always  discouraged  by  the 
courts  when,  instead  of  advancing,  it  will  defeat  the  ends  of 
justice.^ 

§  151.  Pleadings  held  not  multifarious. — -Such  being  the 
general  condition  of  the  authorities  as  to  multifarious  plead- 
ings, it  follows  that  the  practitioner  must  rely  upon  in- 
stances and  illustrations  drawn  from  reported  cases,  for  his 
guidance. 

In  a  suit  before  the  Supreme  Judicial  Court  of  New 
Hampshire,^  it  was  decided  that  it  was  not  multifarious  to 
join  in  a  creditor's  bill,  as  parties  defendant  with  the  debtor, 
several  persons  to  whom  he  conveyed  distinct  parcels  of 
property,  out  of  which  the  creditor  sought  satisfaction  of 
his  debt,  although  such  persons  might  have  no  common  in- 
terest in  the  several  parcels  conveyed.'*  And  in  Dimmock 
V.  Bixby,'^  it  was  held  that  a  demurrer  for  multifariousness 
would  hold  good  only  when  the  plaintiff  claimed  several 
matters  of  a  different  nature,  and  not  when  one  general 
right  was  asserted,  although  the  defendants  might  have 
separate  and  distinct  rights.  The  same  principle  is  recog- 
nized in  Boyd  v.  Hoyt.^  That  was  a  case  of  a  creditor's 
bill  brought  to  reach  property  of  a  judgment-debtor  which 

V.  Haven,  12  Me.  164;  Richards  v.  ment  of  a  will,  though  the  necessary- 
Pierce,  52  Me.  560  ;  Warren  v.  War-  parties  to  the  suit  may  be  the  same, 
ren,  56  Me.  360  ;  Bugbee  v.  Sargent,  23  their  interests  and  attitude  are  de- 
Me.  269  ;  Weston  V.  Blake,  61  Me. 452,  cidedly  at  variance,  and  the  bill  is 
See  §  132.  bad  for  multifariousness.  McDonnell  v. 

'  Bowers     v.    Keesecher,     9     Iowa  Eaton,  18  Fed.  Rep.  710. 
422.  '  Chase  v.  Searles,  45  N.  H.  519. 

»  Marshall    v.    Means,    12    Ga.   61.        ■•  See  §§  54,  55,  132. 
Where  two  distinct  subjects  are  em-        '  20  Pick.  (Mass.)  377. 
braced  in  a  bill,  e.g.,  the  avoidance  of        '•  5  Paige  (N.  Y.)  65.     See  Rinehart 

a  marriage  settlement  and  the  annul-  v.  Long.  95  Mo.  396. 


2  28  PLEADINGS    HELD    NOT    MULTIFARIOUS.  §   15 1 

had  been  fraudulently  transferred  to  two  or  more  persons 
holding  different  portions  of  it  by  distinct  conveyances, 
and  it  was  decided  that  such  persons  might  be  joined. 
The  chancellor  lays  it  down  that  when  the  object  of  a  suit 
is  single,  but  different  persons  have  or  claim  separate  inter- 
ests in  distinct  or  independent  matters,  all  connected  with 
and  arising  out  of  the  single  object  of  the  suit,  the  com- 
plainant may  bring  such  persons  before  the  court  as  de- 
fendants, so  that  the  whole  object  of  the  bill  may  be  ef- 
fected in  one  suit,  and  further  unnecessary  and  useless 
litigation  prevented.  The  case  of  Morton  v.  Weil  ^  is  an 
important  illustration  in  point.  Creditors  by  different  judg- 
ments united  in  bringing  a  suit  against  the  executors  under 
the  will  of  a  decedent,  alleging  the  fraud  of  that  person  in 
contracting  the  debts,  and  joined  as  defendants  various  par- 
ties having  liens  upon,  or  title  to,  the  property  in  question 
by  reason  of  judgments  or  assignments,  alleging  that  such 
liens  or  titles  were  fraudulently  obtained,  and  praying  that 
the  same  might  be  vacated,  and  the  defendants  compelled 
to  account  for  and  pay  over  the  -property.  On  demurrer  to 
the  bill  it  was  decided  that  the  parties  to  it  were  properly 
joined,  and  that  in  other  respects  it  was  sufficient.^  In  an- 
other case,^  a  creditors'  bill  filed  against  the  debtor  and  his 
grantees,  for  the  purpose  of  setting  aside  a  number  of  volun- 
tary conveyances,  severally  made  to  each  of  the  parties,  was 
held  to  be  good.  And  in  Harrison  v.  Hallum,*  the  court 
say  that  it  is  proper,  where  there  are  several  judgment-debt- 
ors in  the  same  judgment,  and  one  of  them  has  made  a 
fraudulent  conveyance  to  one  grantee,  and  another  has  made 
a  similar  conveyance  to  another  grantee,  and  a  third  has 

1  33  Barb.  (N.  Y.)  30.  See,  further.  Way  v.  Bragaw,  16  N.  J. 

-  See  Lawrence  v.  Bank  of  the  Re-  Eq.  213;  Hicks  v.  Campbell,  19  N.  J. 

public,  35  N.  Y.  320;  Reed  v.  Stryker,  Eq.  183;  Randolph  v.  Daly,  16  N.  J. 

12  Abb.  Pr.  (N.  Y.)  47;   Fellows  v.  Eq.  313. 

Fellows,  4  Cow.  (N.  Y.)  682  ;  Lewis  v.  ^  Williams  v.  Neel,  10  Rich.  Eq.  (S. 

St.  Albans  Iron  &  Steel  Works,  50  Vt.  C.)  338. 

481  ;  Arnold  V.  Arnold,  11  W.  Va.449.  •*  5  Coldw.  (Tenn.)  525. 


§   152  PLEADINGS    HELD    NOT    MULTIFARIOUS.  229 

made  a  like  conveyance  to  still  another  grantee,  to  unite  all 
the  debtors  and  their  several  fraudulent  grantees  in  one 
common  bill  for  the  relief  of  the  judgment  -  creditors. 
Again,  where  a  debtor,  with  intent  to  defraud  his  creditors, 
purchased  land,  causing  the  deed  to  be  made  to  his  wife, 
who  participated  in  the  fraud  and  conveyed  the  land  to  an- 
other person  with  the  same  intent,  who  in  turn  conveyed  it 
to  a  third,  both  grantees  being  cognizant  of  the  fraud,  it  was 
held,  in  an  action  brought  by  a  creditor  to  set  aside  the  con- 
veyances, that  both  transactions  being  of  the  same  nature, 
though  different  in  form,  could  be  properly  joined  in  the 
same  complaint.^  A  bill  is  not  regarded  as  multifarious, 
though  brought  to  recover  different  portions  of  the  estate 
of  a  debtor,  from  several  defendants,  if  the  alleged  illegal 
transfers  were  the  result  of  a  common  purpose  on  the  part 
of  the  defendants  to  dismember  the  estate.^ 

§  152.  —  The  cases  upon  this  subject  are  almost  without 
number.  In  De  Wolf  v.  Sprague  Mfg.  Co.,^  it  appeared 
that  the  plaintiff  held  a  judgment  lien  upon  certain  real  es- 
tate upon  which  a  trust-mortgage  had  been  executed,  which, 
if  valid,  was  entitled  to  priority.  The  suit  was  brought  to 
set  aside  or  postpone  the  mortgage,  on  the  ground  that  it 
was  void  against  the  complaining  creditor,  and  for  a  fore- 
closure of  the  judgment  lien,  and  for  possession,  and  the 
mortgagors  and  the  trust-mortgagee  were  made  defendants. 
The  court,  after  protracted  argument  and  an  extended  re- 
view of  the  authorities,  held  that  the  bill  was  not  multifari- 
ous. In  Parker  v.  Flagg^  the  court  say:  "The  bill  is 
brought  by  the  executor,  representing  all  the  creditors  of 
an  insolvent  estate,  to  set  aside  conveyances  made  by  the 
testator  of  all  his  property,  real  and  personal,  in  fraud  of 


'  North  V.  Brad  way,  9  Minn.  183.  Hoyt,   5    Paige    (N.    Y.)  65;    Piatt   v. 

'  Van  Kleeck  v.  Miller,  per  Choate,     Preston,  19  N.  B.  R.  241. 
J.,  19  N.  B.  R.  486  ;    citing  Boyd  v.         »  49  Conn.  282. 

••  127  Mass.  30. 


230  PLEADINGS    HELD    NOT    MULTIFARIOUS.  §152 

those  creditors,  to  his  wife,  who  is  the  sole  defendant ; 
some  of  the  property  consists  of  mortgages,  to  recover 
which  the  plaintiff  has  no  adequate  remedy  at  law  ;  all  the 
conveyances  appear  to  have  been  part  of  one  scheme,  and 
no  objection  is,  nor,  it  would  seem,  could  be  taken  to  the 
bill  for  multifariousness.  The  demurrer  was  erroneously 
sustained,  and  should  have  been  overruled."^  It  is  per- 
haps unnecessary  to  further  multiply  illustrations.  Some 
of  the  cases  have  certainly  gone  to  an  extreme  limit,  and 
parties  have  been  held  together  as  defendants  in  one  action 
by  a  very  slender  thread  of  reasoning.  The  St.  Louis 
Court  of  Appeals,  commenting  upon  the  subject,  say  : 
"  The  principle  that  it  is  not  sufficient  that  the  defendants 
are  all  concerned  in  some  general  charge,  such  as  fraud  on 
the  part  of  the  debtor,  or  that  as  grantees  of  distinct  pro-p- 
erties  by  distinct  conveyances  they  obtained  title  through 
him,  but  that  all  the  defendants  should  at  least  have  an  in- 
terest in  the  principal  point  in  issue  in  the  case,  is  surely 
of  some  value  as  a  general  test.  In  cases  like  the  present 
it  would  be  decisive.  Here  there  is  no  material  issue  in 
which  all  the  defendants  have  a  common  interest,  and  con- 
sequently no  tie  to  make  them  defendants  in  one  suit. 
.  ...  It  is  obvious  that,  merely  from  convenience  to 
plaintiffs,  the  defendants  ought  not  to  be  put  to  the  trouble 
and  expense  of  litigating  matters  with  which  they  are  un- 
connected."^ These  observations  were  made  in  a  case  in 
which  there  were  twenty  defendants  having  a  common 
source  of  title  from  an  alleged  fraudulent  grantor  ;  the  con- 
veyances were  separate  and  made  at  different  times,  and 
the  defendants  were  beneficiaries  and  trustees  indiscrimi- 
nately joined.  The  bill  was  pronounced  multifarious.  The 
decision,  however,  can  scarcely  be  harmonized  with  some 
of  the  authorities  already  discussed.^ 

>  Chase  v.  Redding,  13  Gray  (Mass.)         ^  Bobb  v.  Bobb,  8  Mo.  App.  260. 
418;  Welsh  V.  Welsh,  105  Mass.  229;        ^  As  to  bills  held  not  to  be  multifari- 
Gilson  V.  Hutchinson,  120  Mass.  27.         ous,  see  Richmond  v.  Irons,  121  U.  S.27. 


§§    153-155  PRAYER    OF    COMPLAINT.  23 1 

§  153.  Alternative  relief. — In  Alabama  it  was  held  that  a 
creditors'  bill  may  be  filed  for  a  double  purpose ;  asking 
in  the  alternative  to  have  two  or  more  conveyances  can- 
celled as  intended  to  hinder,  delay,  and  defraud  creditors,  or 
to  have  them  construed  as  tos^ethcr  constituting  a  creneral 
assignment  inuring,  under  the  statute  of  that  State,  to  the 
benefit  of  all  the  insolvent's  creditors  equally.^  But  in  a  later 
case  in  that  State '^  the  court  feel  constrained  to  depart 
from  and  overrule  the  decision  upon  this  point. 

§  154.  Attacking  different  conveyances. — The  fact  that  a 
plaintiff  seeks  to  set  aside  two  or  more  conveyances  as 
fraudulent,  does  not  require  that  each  conveyance  shall  be 
set  forth  in  a  separate  paragraph  as  the  basis  of  a  separate 
cause  of  action.  They  constitute  but  one  cause  of  action, 
the  fraudulent  disposition  of  his  property  by  the  judgment- 
debtor.^ 

§  155.  Prayer  of  complaint — Variance — Verification. — As  a 
general  rule  in  the  modern  procedure  a  mistake  in  the  de- 
mand for  relief  is  not  fatal.'*  In  Buswell  v.  Lincks  ^  the 
court  said:  "The  point  is  made  that  the  bill  was  framed 
upon  the  basis  of  a  claim  that  there  had  been  a  fraudulent 
trust-deed,  and  a  receiver  had  been  prayed  for,  while  the 
relief  given  in  setting  aside  the  fraudulent  conveyance  and 
adjudging  a  sale  of  the  leasehold  under  execution  was  in- 
consistent with  the  prayer  of  the  complaint.  The  sufficient 
answer  to  this  proposition  is,  that  the  judgment  was  such 
as  the  court  was  bound  to  give  upon  the  allegations  and 
proofs  without  reference  to  the  relief  demanded."  And 
where  the  bill,  in  addition  to  the  general  demand  for  relief, 
contained  a  prayer  that  a  deed  be  set  aside,  it  was  held 
that,  merely  because  of  a  prayer  that  the  defendant  be  de- 


'  Crawford  v.  Kirksey,  50  Ala.  591.  *  See   Bell  v.  Merrifield,   109  N.  Y. 

'  Lehman  v.  Meyer,  67  Ala.  404.  202. 

'  Strong  V.  Taylor  School  Township,  »  8  Daly  (N.  Y.)  527. 
79  Ind.  208. 


232  PRAYER  OF  COMPLAINT.  §  155 

creed  to  give  the  complainant  possession  of  the  land,  the 
bill  would  not  be  treated  as  a  bill  for  possession,  nor  dis- 
missed on  the  ground  that  ejectment  was  the  proper  rem- 
edy.^ As  a  general  rule  complainants  are  entitled,  under  a 
prayer  for  general  relief,  to  any  judgment  consistent  with 
the  case  made  in  their  bill,^  but  they  are  not  usually  en- 
titled to  a  decree  covering  and  including  matters  not  re- 
ferred to  in  the  pleadings,  and  as  to  which  the  respondents 
have  never  had  their  day  in  court.^  The  court  will  not 
hesitate  to  dismiss  a  bill  which  presents  a  case  totally  dif- 
ferent from  the  testimony  in  the  record;*  and  no  decree 
can  ordinarily  be  made  on  grounds  not  stated  in  the  bill.^ 
"The  rule  is  explicit  and  absolute,  that  a  party  must  re- 
cover in  chancery  according  to  the  case  made  by  his  bill  or 
not  at  all,  'secundum  allegata'  as  well  as  ' probaia'"^ 
Matters  not  charged  in  the  bill  should  not  be  considered 
on  the  hearing.'''  If,  however,  the  special  prayers  are  inapt 
and  incongruous,  and  so  framed  that  no  relief  can  be 
granted  under  them,  the  court  under  the  prayer  for  general 
relief  may  render  any  appropriate  judgment  consistent  with 
the  case  made  by  the  bill.^  Courts  of  equity  give  judg- 
ment for  money  only  where  that  is  all  the  relief  needed.' 

The  objection  that  a  bill  is  not  verified  is  immaterial,  as 
a  bill  in  equity  need  not  usually  be  sworn  to  unless  it  is 
sought  to  use  it  as  evidence  upon  an  application  for  a  pro- 
visional injunction  or  other  similar  relief.^" 


1  Miller  v.  Jamison,  24  N.  J.  Eq.  41.  Wright  v.  Delafield,  25  N.  Y.  266  ;  Gor- 

See  Sedg.  &  Wait  on  Trial  of  Title  to  don  v.  Reynolds,  114  111.  123. 

Land,  2d  ed.,  §  169.  «  Bailey   v.  Ryder,    10   N.   Y.    370; 

"^  Bell  V.  Merrifield,  109  N.  Y.  206.  Clark  v.  Krause,  2  Mackey  (D.  C.)  573  ; 

^  Wilson    V.   Horr,    1 5    Iowa    492  ;  Eyre  v.  Potter,  1 5  How.  42. 

Tripp  V.  Vincent,  3  Barb.  Ch.  (N.  Y.)  '  Hunter  v.  Hunter,  10  W.  Va.  321. 

613  ;  Parkhurst  v.  McGraw,  24  Miss.  *  Annin  v.  Annin,  24  N.  J,  Eq.  188. 

139;  Hovey  v.  Holcomb,  11  111.  660.  '  Bell  v.  Merrifield,  109  N.  Y.  207  ; 

*  Roberts  v.  Gibson,  6  H.  &  J.  (Md.)  Murtha  v.  Curley,  90  N.  Y.  372. 

123  ;  Truesdell  v.  Sarles,  104  N.  Y.  168.  '"  Hughes  v.  Northern    Pacific  R.R. 

'  Bailey  v.  Ryder,    10   N.   Y.   363  ;  Co.,  i  West  Coast  Rep.  24. 


§§   156,    157  AMENDMENT. DESCRIPTION.  233 

§  156.  Amendment. — A  variance  between  the  actual  date 
of  the  judgment  and  that  set  forth  in  a  creditors'  bill  based 
on  it,  may  be  corrected  by  amendment  at  any  time  during 
the  proceedings  ;  but  as  the  complainant  is  not  absolutely 
confined  to  the  exact  date  stated  in  the  bill  the  amendment 
may  be  unnecessary.^  An  amendment  of  a  bill  as  to  the 
description  of  the  property  under  well-established  rules  of 
procedure  only  operates  from  the  time  of  the  service  of  the 
amended  pleading.^  The  bill  may  be  amended  on  the  final 
hearing  in  the  United  States  Circuit  Court,  so  as  to  state 
that  the  value  of  the  matter  in  dispute  exceeds  five  hundred 
dollars.^  Speaking  upon  the  subject  of  amendments,  Davis, 
J.,  said,  in  Neale  v.  Neales:*  "To  accomplish  the  object 
for  which  a  court  of  equity  was  created,  it  has  the  power 
to  adapt  its  proceedings  to  the  exigency  of  each  particular 
case,  but  this  power  would  very  often  be  ineffectual  for  the 
purpose,  unless  it  also  possessed  the  additional  power,  after 
a  cause  was  heard  and  a  case  for  relief  made  out,  but  not 
the  case  disclosed  by  the  bill,  to  allow  an  alteration  of  the 
pleadings  on  terms  that  the  party  not  in  fault  would  have 
no  reasonable  ground  to  object  to.  That  the  court  has 
this  power  and  can,  upon  hearing  the  cause,  if  unable  to  do 
complete  justice  by  reason  of  defective  pleadings,  permit 
amendments,  both  of  bills  and  answers,  is  sustained  by  the 
authorities."^  The  granting  of  amendments  of  pleadings 
in  chancery  rests  in  the  sound  discretion  of  the  court. ^ 

§  157.  Description. — Aside  from  interests  not  liable  to 
execution,  the  fact  that  a  creditor  is  compelled  to  file  a  bill 
in  equity  usually  implies  ignorance  on  his  part  of  the  exact 
character  and  form  in  which  the  debtor  has  invested  or 


•  First  Natl.  Bank  of  M.  v.  Hosmer,  ing,  326,  331 ;  Story's  Equity  Pleading, 
48  Mich.  200.  §§  904,  905  ;  Daniel's  Chancery  Pr.  & 

3  Miller  v.  Sherry,  2  Wall.  250.  PI.  463,  466 ;  Smith  v.  Babcoclc,  3  Sum- 

^  CoUinson  V.  Jackson,  8  Sawyer  358.  ner  583;    McArtee  v.  Er.gart,    13  III, 

■*  9  Wall.  8.  242. 

*  Citing  Mitford's  Chancery  Plead-        ^  Gordon  v.  Reynolds,  114  111.  ii8. 


234  DESCRIPTION.  §   157 

secreted  his  property.  If  such  were  not  the  case,  process 
of  execution  would  be  invoked.  It  should  not,  therefore, 
be  necessary  to  particularly  describe  or  indicate  in  the  com- 
plaint, the  assets,  whether  legal  or  equitable,  which  it  is 
proposed  to  reach  by  the  bill.-^  Thus  a  bill  was  entertained 
which  alleged  that  the  defendant  "  has  equitable  interests, 
things  in  action,  and  other  property  which  cannot  be  reached 
by  execution,  and  that  he  has  also  debts  due  to  him  from 
persons  unknown."^  In  Miller  v.  Sherry^  the  original  bill 
was  in  the  form  of  a  creditor's  bill.  It  contained  nothing 
specific  except  as  to  certain  transactions  between  the  debtor 
and  one  Richardson.  There  was  no  other  part  of  the  bill 
upon  which  issue  could  be  taken  as  to  any  particular  prop- 
erty. The  court  held  that  it  was  effectual  for  the  purpose 
of  creating  a  general  lien  upon  the  assets  of  the  debtor,  as 
a  means  of  discovery,  and  as  the  foundation  for  an  injunc- 
tion and  an  order  that  the  debtor  execute  a  conveyance  to 
a  receiver.  Furthermore,  that  if  it  became  necessary  to 
litigate  as  to  any  specific  claim,  other  than  that  against 
Richardson  already  specified,  an  amendment  to  the  bill 
would  have  been  indispensable.  The  bill  did  not  create  a 
lis  pendens^  operating  as  notice  affecting  any  real  estate. 
To  have  that  effect  the  recital  in  the  description  must  be 
so  definite  that  any  one  reading  it  can  thereby  learn  what 
property  is  intended  to  be  made  the  subject  of  the  litiga- 
tion,^ Where  the  complainant  in  a  creditor's  bill  seeks  to 
obtain  satisfaction  out  of  lands  inherited  or  devised,  and  is 


'  Shainvvald  v.  Lewis,  6  Fed.  Rep.766.         ■*  As  to  the  application  of  the  doc- 

^  Lanmon   v.   Clark,  4  McLean  18.  trine  of  lis  pendens  to  creditors'  suits, 

"  The  jurisdiction  of  a  court  of  equity  see  Webb  v.  Read,  3  B.  Mon.  (Ky.) 

to  reach  the  property  of  a  debtor  justly  119;   Jackson   v.   Andrews,   7   Wend. 

applicable  to  the  payment  of  his  debts,  (N.  Y.)  152. 

even  when  there  is  no  specific  lien  on         ^  See  Griffith  v.  Griffith,  9  Paige  (N. 

the   property,  is   undoubted."     Public  Y.)  317.     Compare  Sharp  v.  Sharp,  3 

Works  V.  Columbia  College,  17  Wall.  Wend.  (N.  Y.)  278;  King  v.  Trice,  3 

530,  Ired.   (N.  C.)   Eq.  573  ;    McCauley  v. 

'  2  Wall.  249,  Rodes,  7  B.  Mon.  (Ky.)  462. 


§157  DESCRIPTION.  235 

unable  to  specify  the  lands,  he  may  state  that  fact  in  the 
bill,  and  call  upon  the  heirs  to  discover  the  lands  devised 
or  inherited,  so  that  they  may  be  reached  by  amendment  of 
the  bill  or  otherwise.^  If  the  description  be  indefinite  it 
may  be  aided  by  the  evidence.* 

The  rule  that  an  alienation  of  property  made  during  the 
pendency  of  an  action  is  subject  to  the  final  decree  is,  as 
shown  by  Mr.  Bishop,^  of  very  ancient  origin.  Murray  v. 
Ballou*  is  the  leading  case  in  this  country.  The  doctrine 
is  important  both  as  regards  the  titles  of  purchasers  and 
the  question  of  preferences  among  judgment-creditors.  In 
Scouton  V.  Bender,^  where  an  assignment  was  over- 
turned, it  was  decided  that  the  creditors  were  entitled 
to  satisfaction  of  their  judgments,  respectively,  out  of 
the  funds  derived  from  the  real  estate  in  the  order  of 
priority  of  the  judgments  ;  and  out  of  the  personal  fund 
in  the  order  in  which  the  bills  were  filed  and  the  equit- 
able liens  created.  The  doctrine  of  lis  pendens,  it  may 
be  further  remarked,  is  said  to  have  no  application  to 
corporate  stock, "^  or  negotiable  securities.'''  Mr.  Justice 
Bradley  said  in  County  of  Warren  v.  Marcy:**  "Whilst 
the  doctrine  of  constructive  notice  arising  from  lis  pendens, 
though  often  severe  in  its  application,  is,  on  the  whole,  a 
wholesome  and  necessary  one,  and  founded  on  principles 
affecting  the  authoritative  administration  of  justice,  the 
exception  to  its  application  is  demanded  by  other  consider- 
ations equally  important,  as  affecting  the  free  operations  of 


•  Parsons  v.  Bowne,  7  Paige  (N.  Y.)  ^  Bishop  on  Insolvent  Debtors,  Sup- 

354.     See  §  147.  plement;  §  228a. 

^  Williams   v.   Ewing,  31   Ark.  235.  ••  i  Johns.  Ch.  (N.  Y.)  566.     See  Til- 

The  circumstance  that  a  deed  did  not  ton  v.  Cofield,  93  U.  S.  168. 

give  an  accurate  description  of  the  land  ^  3  How.  Pr.  (N.Y.)  185.  See  §  132a. 

intended  to  be  conveyed  will  not  defeat  "  Holbrook  v.  New  Jersey  Zinc  Co., 

a  settlement  where  the  description  used  57  N.  Y.  616. 

could  leave  no  one  in  serious  doubt  as  '  County  of  Warren  v.  Marcy.  97  U. 

to  the  land  intended.     Wallace  v.  Pen-  S.  96. 

field,  106  U.  S.  263.  "  97  U.  S.  109. 


236  CHANGE    OF    VENUE.  §   157^ 

commerce,  and  that  confidence  in  the  instruments  by  which 
it  is  carried  on,  which  is  so  necessary  in  a  business  com- 
munity."^ An  attempt  to  discuss  the  various  phases  of 
the  law  of  lis  peiidens  is  not  possible  in  this  connection. 
The  exceptions  that  have  crept  into  the  rule  that  a  party 
who  meddles  with  property  in  controversy  does  so  at  his 
peril  have  frequently  brought  the  proceedings  of  diligent 
creditors  to  naught. 

§  157(3:.  Change  of  venue — Territorial  jurisdiction. — In  New 
York  State  a  motion  to  change  the  place  of  trial  of  an  ac- 
tion, brought  to  annul  a  fraudulent  conveyance,  to  the 
county  in  which  certain  real  estate  passing  under  the  as- 
signment is  situated,  cannot  be  defeated  by  an  offer  on  the 
part  of  the  plaintiff  to  stipulate  that  he  will  not  attempt  to 
reach  such  real  estate.^  When  a  court  of  equity  attempts 
to  act  directly  upon  real  or  personal  property  by  its  decree 
the  property  must  be  within  the  territorial  jurisdiction  of 
the  court.  "  It  is  equally  well  settled  that  where  one  is 
the  owner  of  land  or  other  property  in  a  foreign  jurisdic- 
tion, which  in  equity  and  good  conscience  he  ought  to  con- 
vey to  another,  the  latter  may  sue  him  in  equity  in  any 
jurisdiction  in  which  he  may  be  found,  and  compel  him  to 
convey  the  property.  The  decree  in  such  case  directing  a 
conveyance  of  the  property  does  not  directly  affect  the  title 
to  the  property,  yet  the  enforcement  of  it  does  result  in  the 
complete  change  of  the  title."  ^ 


'  For  phases  of  the  doctrine  of  lis  Y.  631 ;  Boynton  v.  Rawson,  i  Clarke 

pendens,  and  of  the  rule  as  to  the  pref-  (N.  Y.)  584 ;  Claflin  v.  Gordon,  39  Hun 

erence   obtained   by  filing  a   bill,  see  (N.  Y.)  57;  Shand  v.  Hanley,  71  N.  Y. 

Leitch  V.  WeUs,  48  N.  Y.  585 ;  Fitch  324. 

V.  Smith,  10  Paige  (N.  Y.)  9  ;  Albert  v.  '  Wyatt  v.  Brooks,  42  Hun  (N.  Y.) 

Back,  20  J.  &   S.  (N.  Y.)   550,  affi'd  502.     Compare  Acker  v.  Leland,  96  N. 

loi  N.  Y.  656  ;  Davenport  v.  Kelly,  42  Y.  384. 

N.  Y.  193  ;  Van  Alstyne  v.  Cook,  25  ^  Johnson  v.  Gibson,  116  111.  294. 
N.  Y.  489;  Becker  v.  Torrance,  31  N. 


CHAPTER  X. 


OF    THE    PLEA    OR    ANSWER. 


§  158.  Answer'and  burden  of  proof, 
159.  Avoiding  denial. 

Answer     as     evidence     for    or 

against  co-defendant. 
Pleading   to  the  discovery  and 
the  relief. 
162.  Particularity  of  denial  in  answer. 


160. 


161, 


§  162a.  Bill  of  particulars. 

163.  Denying  fraud  or  notice. 

164.  Admission  and  avoidance. 

165.  Avoiding  discovery. 

166.  Affirmative  relief. 

167.  Waiver  of  verification. 


§  158.  Answer  and  burden  of  proof. — Usually,  as  we  have 
seen,  in  creditors'  actions  to  reach  assets,  or  bills  in  equity 
to  annul  fraudulent  alienations,  the  debtor  and  the  fraudu- 
lent alienees  are  made  parties  defendant.  The  latter  are 
necessary  parties  to  the  end  that  the  judgment  may  con- 
clude them,  and  the  court  obtain  jurisdiction  over  and  pos- 
session of  the  assets  in  their  hands,  and  annul  the  colorable 
transfer.  It  is  manifest  that  the  defendant  alienee  has 
rights  in  the  suit  different  from  and  superior  to  those  of 
the  debtor.  The  latter  is  of  course  concluded  by  the  judg- 
ment upon  which  the  bill  proceeds,  and  can  withhold  from 
his  creditor  nothing  but  exempt  property.  The  alienee,  on 
the  other  hand,  may  claim  to  be  a  bona  fide  purcliaser,  or 
may  show  the  absence  of  actual  fraud,  and  thus  be  allowed 
to  hold  the  property  as  security  for  advances.  The  grantor 
may  "  intend  a  fraud,  but  if  the  grantee  is  a  fair,  bona  fide, 
and  innocent  purchaser,  his  title  is  not  to  be  affected  by  the 
fraud  of  his  grantor."^  It  follows  that  the  alienee  cannot 
be  prejudiced  by  the  fact  that  judgment /r^  confcsso  j)asses 


'  Sands  v.  Hildreth,  14  Johns.  (N.  Y.)     2  Mich.  310 ;  Kittering  v.  Parker,  8  Ind. 
498,  per  Spencer,  J. ;  Hollister  v.  Loud,     44.     See  Chap.  XXIV. 


238  AVOIDING    DENIAL.  §    1 59 

ao"ainst  the  debtor,^  or  that  fraud  is  admitted  or  alleged  in 
the  debtor's  answer.^  The  defense  that  a  party  is  a  bona 
fide  purchaser  is  an  affirmative  defense  only  in  cases  where 
fraud  in  some  previous  holder  of  the  title  has  been  shown, ^ 
and  ordinarily  a  sworn  answer  responsive  to  a  direct  inter- 
rogatory or  specific  charge  of  fraud  must  be  accepted  as 
true  until  disproved."*  Fraud,  as  we  have  already  seen,^  is 
not  a  thing  to  be  presumed,  but  must  be  proved  and  estab- 
lished by  evidence  sufficient  for  that  purpose,^  although,  as 
already  made  manifest/  it  is  sometimes  practically  a  legal 
deduction  from  uncontrov^erted  facts,  or  from  evidence  the 
weight  of  which  is  practically  conclusive.^ 

Where  a  defendant's  title  is  attacked  on  the  ground  of 
fraud  he  may,  under  a  general  denial,  introduce  any  proof 
showing  that  his  title  is  not  fraudulent.^ 

§  159.  Avoiding  denial. — The  general  rule  prevails,  under 
equity  procedure,  that  an  answer  under  oath,  so  far  as  it  is 
responsive,  is  to  be  taken  as  true  unless  overcome  by  com- 
petent proof.^*^  When  the  defendant,  by  his  answer  under 
oath,  has  expressly  negatived  the  allegations  of  the  bill,  and 
the  testimony  of  only  one  person  has  affirmed  what  has 
been  negatived,  the  court  will  not  decree  in  favor  of  the 
complainant.  There  is  then  oath  against  oath."  The  com- 
plainant generally  calls  upon  the  defendant  to  answer  on 
oath,  and  is  therefore  bound  to  admit  the  answer,  so  far  as 
he  has  called  for  it,  to  be  prima  facie  true,  and  as  much 
worthy  of  credit  as  the  testimony  of  any  witness.  This 
rule  does  not  extend,  however,  to  averments  embodied  in 


1  Thames  v.  Rembert,  63  Ala.  561.  «  Grover  v.  Grover,  3  Md.  Ch.  35. 

See  Dick  v.  Hamilton,  i  Deady  322  ;  '  See  §§  9,  10. 

Fulton  V.  Woodman,  54  Miss.  158-173.  *  See  §  10. 

^  See   Scheitlin   v.    Stone,  43  Barb.  '  Ray  v.  Teabout,  65  Iowa  157. 

(N.  Y.)  637.  '"Wright  v.  Wheeler,   14  Iowa  13; 

^  Fulton  V.  Woodman,  54  Miss.  172.  Allen  v.  Mower,  17  Vt.  61  ;  Parkhurst 

^  Fulton  V.  Woodman,  54  Miss.  159;  v,  McGraw,  24  Miss.  134. 

Hartshorn  v.  Karnes,  31  Me.  98.  "  Jacks  v.  Nichols,  5  N.  Y.  178. 

^  See  §  6. 


§    159  AVOIDING    DENIAL.  239 

the  answer  not  directly  responsiv'^e  to  the  allegations  con- 
tained in  the  bill,  since  the  complainant  has  not  called  for 
such  averments.^  Allegations  not  responsive  to  the  bill,  if 
denied  by  a  general  replication,  must  be  proved  before  be- 
coming available  to  the  party  making  them.^  In  Green  v. 
Tanner^  the  court  said  :  "  That  the  answer,  being  responsive 
to  the  bill,  is  evidence  for  the  defendants  as  to  facts  within 
their  own  knowledge,  is  not  denied.  And  by  a  well-estab- 
lished rule  of  equity,  the  answer  must  be  taken  to  be  true, 
unless  contradicted  by  two  witnesses,  or  by  one  witness 
with  probable  and  corroborating  circumstances."^  In  Bow- 
den  V.  Johnson^  it  was  contended  by  counsel  that,  as  the 
bill  prayed  that  the  defendant  should  answer  its  allegations 
on  oath,  the  answer  was  evidence  in  his  favor,  and  was  to 
be  taken  as  true  unless  it  was  overcome  by  the  testimony 
of  one  witness,  and  by  corroborating  circumstances  equiva- 
lent to  the  testimony  of  another  witness.  The  court  found 
facts  "  sufficient  to  satisfy  the  rule  of  equity,"  and  cite  from 
Greenleaf*  to  the  effect  "that  the  sufficient  evidence  to 
outweigh  the  force  of  an  answer  may  consist  of  one  witness, 
with  additional  and  corroborative  circumstances,  which  cir- 
cumstances may  sometimes  be  found  in  the  answer  itself ; 
or  it  may  consist  of  circumstances  alone,  which,  in  the  ab- 
sence of  a  positive  witness,  may  be  sufficient  to  outweigh 
the  answer  even  of  a  defendant  who  answers  on  his  own 
knowledge."'''  It  seems  that  the  credibility  of  the  defend- 
ants' answers  setting  forth  consideration,  will  be  destroyed 
by  proof  that  the  vendee  permitted  the  vendor  to  assert  in 
his  hearing,  without  contradicting  him,  tliat  no  indebted- 
ness existed.® 

'  Seitz  V.  Mitchell,  94  U.  S.  582.  234  ;  Hoboken  Bank  v.  Beckm.in,  33 

^  Humes  v.  Scruggs,  94  U.  S.  24.  N.  J.  Eq.  55. 

3  8  Mete.  (Mass.)  422.  '  107  U.  S.  262. 

*  Flagg    V.    Mann,    2    Sumner  487.  '  Greenleaf  on  Evidence,  vol.  3,  §  289. 

See  Tompkins  V.  Nichols,  53  Ala.  198;  ^  S.  P.  Williamson   v.  Williams,  11 

Parkman  v.  Welch,  19  Pick.  (Mass.)  Lea  (Tenn.)  365. 

'  Bradley  v.  Buford,  Snecd  (Ky.)  1 2. 


240  DISCOVERY    AND    RELIEF.  §§  160,  161 

§  160.  Answer  as  evidence  for  or  against  co-defendant. — 
The  equity  practice  seems  to  be  settled  that  generally- 
speaking  the  answer  of  one  defendant  cannot  be  used 
against  another  defendant.^  In  Salmon  v.  Smith,^  the  rule 
is  recognized  that  the  answer  of  one  defendant  to  a  bill  in 
chancery  which  shows  that  the  complainant  is  not  entitled 
to  the  relief  sought,  inures  in  favor  of  his  co-defendant  as 
evidence.^  So  it  is  said  by  Mr.  Greenleaf,^  "  that  where 
the  answer  in  question  is  unfavorable  to  the  plaintiff,  and 
is  responsive  to  the  bill,  by  furnishing  a  disclosure  of  the 
facts  required,  it  may  be  read  as  evidence  in  favor  of  a  co- 
defendant,  especially  where  the  latter  defends  under  the 
title  of  the  former."^  Where  the  complainants  choose  to 
rely  upon  admissions  or  confessions  in  an  answer,  the  de- 
nials and  admissions  must,  of  course,  be  considered  as  a 
vvhole.*^  A  sworn  answer  should  be  taken  as  true  unless 
overcome  by  the  testimony,'^  but  the  denials  to  make  an  an- 
swer evidence  must  be  of  facts  stated  in  the  bill.^  It  may 
be  here  recalled  that  the  testimony  of  a  single  witness,  un- 
corroborated by  circumstances,  has  been  considered  not 
sufficient  to  overcome  a  verified  answer  positively  denying 
fraud. ^ 

§  161.  Pleading  to  the  discovery  and  the  relief. — Chancel- 
lor Walworth  stated  in  Brownell  v.  Curtis,^°  that,  in  certain 
cases,  where  the  discovery  asked  for  would  tend  to  crimi- 


'  Salmon  v.    Smith,    58   Miss.  408;  gan  v.  Henderson,  i  Bland  (Md.)  261. 

Powles    V.    Dilley,  9  Gill  (Md.)  222;  But  see  Cannon  v.  Norton,  14  Vt.  178. 
McKim  V.  Thompson,  i  Bland  (Md.)         ^  Crawford  v.  Kirksey,  50  Ala.  597. 
161,  '  Hurd  V,  Ascherman,  117  111.  501. 

*  58  Miss.  400,  408.  ^  Gainer  v.  Russ,  20  Fla.  162. 

^  Davis  V.  Clayton,  5  Humph.  (Tenn.)         '  See  Garrow  v.  Davis,  15  How.  272  ; 

446.  Evans  v.  Bicknell,  6  Ves.  184;    Lord 

*  3  Greenl.  Ev.  §  283.  Cranstown   v.   Johnston,  3  Ves.   170; 

*  See  Mills  v.  Gore,  20  Pick.  (Mass.)  Pilling  v.  Armitage,i2  Ves.  78;  Thomp- 
28;  Miles  v.  Miles,  32  N.  H.  147;  son  v.  Sanders,  6  J.  J.  Marsh  (Ky.)  93. 
Powles  V.  Dilley,  9  Gill  (Md.)  222 ;  Compare  Allen  v.  Cole,  9  N.  J.  Eq. 
Field  V.  Holland,  6  Cranch  8  ;  Clason  286. 

V.  Morris,  10  Johns.  (N.  Y.)  524;  Lin-        *'  10  Paige  (N.  Y.)  214. 


§    1 62  DENIAL    IN    ANSWER.  24 1 

nate  the  defendant,  or  subject  him  to  a  penalty  or  forfeit- 
ure, or  entail  a  breach  of  confidence,  the  defendant  was  not 
bound  to  make  a  discovery  to  aid  in  establishing  the  facts,* 
although  the  complainant  might  be  entitled  to  relief.  In 
the  course  of  the  opinion  it  was  further  said  :  "  But  where 
the  same  principle  upon  which  the  demurrer  to  the  dis- 
covery of  the  truth  of  certain  charges  in  the  complainant's 
bill  is  attempted  to  be  sustained,  is  equally  applicable  as  a 
defense  to  the  relief  sought  by  the  bill,  the  settled  rule  of 
the  court  is  that  the  defendant  cannot  be  permitted  to  de- 
mur as  to  the  discovery  only,  and  answer  as  to  the  relief.'^ 
This  general  rule  is  equally  applicable  to  the  case  of  a  plea  ; 
and  the  defendant  cannot  plead  any  matters  in  bar  of  the 
discovery  merely,  when  the  matters  thus  pleaded  would  be 
equally  valid  as  a  defense  to  the  relief." 

§  162.  Particularity  of  denial  in  answer. — Chancellor  Kent, 
in  Woods  v.  Morrell,'^  in  discussing  the  sufficiency  of  an 
answer  to  the  allegations  of  a  bill  in  equity,  said  :  "  The 
general  rule  is,  that  to  so  much  of  the  bill  as  is  material 
and  necessary  for  the  defendant  to  answer,  he  must  speak 
directly,  without  evasion,  and  not  by  way  of  negative  preg- 
nant. He  must  not  answer  the  charges  merely  literally, 
but  he  must  confess  or  traverse  the  substance  of  each 
charge  positively,  and  with  certainty  ;  and  particular  pre- 
cise charges  must  be  answered  particularly  and  precisely, 
and  not  in  a  general  manner,  even  though  a  general  answer 
may  amount  to  a  full  denial  of  the  charges."'*  This  rule  is 
well  illustrated  in  Welcker  v.  Price,^  where  the  bill  charged 
that  the  land  conveyed  by  the  debtor  to  his  wife  was  "  all 
the  property  of  which  the  said  John  F.  was  possessed."   The 


'Citing    Atty.-Genl.    v.     Brown,     i  129;  Story's  Eq.  Pleadings  254,  n.  i; 

Svvanst.  294;  Dummer  v.  Corporation  Welf.  Eq.  Pleadings  133. 

of  Chippenham,  14  Ves.  245  ;  Hare  on  ^  i  Johns.  Ch.  (N.  Y.)  107. 

Discovery  5.     See  §  165.  ■«  See  Hunter  v.  Bradford,  3  Fla.  2S5  ; 

-  Citing  Morgan  v.  Harris,  2  Bro.  C.  Barrow  v.  Bniley,  5  Fla.  23. 

C.  124;  Waring  v.  Mackreth,  Forrest  '  2  Lea  (Tenn.)  667. 
16 


242  BILL    OF    PARTICULARS.  §    162a 

answer  set  forth  that  the  debtor  "  was  then  in  good  circum- 
stances, with  means  enough  and  more  than  enough  to  pay 
all  his  debts."  This  latter  statement  was  characterized  as  a 
mere  legal  conclusion  which  a  party  was  not  permitted  to 
draw  for  himself,  or  to  express  an  opinion  concerning, 
without  disclosing  facts  to  justify  it,  and  as  being  a  mere 
evasion  of  the  real  issue  as  to  the  possession  of  other 
property. 

It  is  a  familiar  rule  that  a  positive  denial  of  fraud  in  an 
answer  will  not  prevail  against  admissions,  in  the  same 
pleading,  of  facts  which  show  that  the  transaction  was 
fraudulent ;  ^  also,  that  in  weighing  the  whole  evidence  in 
the  case,  the  fact  that  the  defendant  answers  only  gener- 
ally, denying  the  fraud,  will  operate  against  him  whenever 
the  bill  charges  him  with  particular  acts  of  fraud,^  A 
charge  in  a  bill  that  the  deed  in  question  was  never  prop- 
erly delivered,  and  that  the  grantor  retained  possession 
^after  the  conveyance,  should,  if  untrue,  be  specifically  de- 
nied.^ 

§  162a.  Bill  of  particulars. — The  granting  of  an  order  for 
a  bill  of  particulars  in  an  action  rests  largely  in  the  sound 
discretion  of  the  court.  Such  orders  have  been  granted  in 
almost  every  form  of  action.^  In  a  Special  Term  case  in 
New  York,  prosecuted  to  set  aside  an  assignment  as  hav- 
ing been  made  in  fraud  of  creditors,  Lawrence,  J.,  ordered 
the  plaintiff  to  furnish  certain  preferred  creditors  with  a  bill 
of  particulars  of  the  times,  places,  acts,  and  things  which  it 
was  intended  to  prove  as  showing  the  fraudulent  intent.^ 
A   similar   application    was   denied  in   a  later  case  upon 


'  Robinson  v.  Stewart,  10  N.  Y.  194;  ^  Hudgins  v.  Kemp,  20  How.  52. 

Jackson  v.  Hart,  1 1  Wend.  (N.  Y.)  349,  *  See  Dwight  v.  Germania  Life  Ins. 

per  Savage,  Ch.  J.     See  Hoboken  Bank  Co.,  84  N.  Y.  493  ;  Tilton  v.  Beecher,  59 

V.  Beckman,  33  N.  J.  Eq.  53  ;  Sayre  v.  N.  Y.  176. 

Fredericks,  16  N.  J.  Eq.  205.  s  ciaflin  v.  Smith,  13  Abb.  N.  C.  (N. 

'  Parkman  v.  Welch,  19  Pick.  (Mass.)  Y.)  205. 
234. 


§    163  DENYING    FRAUD    OR    NOTICE.  243 

slightly  dissimilar  facts.^  It  would  be  destructive  to  cred- 
itors' proceedings  in  many  cases  to  allow  a  debtor  to  exact 
in  advance  a  bill  of  particulars  of  the  specific  acts  of  fraud 
relied  upon  to  support  the  action.  Fraud  is  generally  es- 
tablished by  developing  a  series  of  minute  circumstances, 
earmarks,  and  indicia.  These  sometimes  appear  at  the 
trial  for  the  first  time  when  the  creditor  has  obtained  an 
opportunity  to  explore  the  enemy's  country  by  cross-ex- 
amination it  may  be.  As  the  presumption  of  good  faith  in 
all  transactions  rests  with  the  defendant,  and  the  general 
character  of  the  plaintiff's  cause  of  action  must  be  outlined 
in  the  pleading,  it  would  seem  to  be  most  unjust  to  require, 
in  addition,  a  statement  of  the  items  of  the  creditors'  evi- 
dence in  advance  of  the  trial.  Creditors  are  considered  to 
be  a  favored  class,  and  are  entitled,  with  proper  restrictions, 
to  "  fish  "  through  the  debtor's  transactions  in  pursuit  of 
hidden  assets,  and  should  not  be  fettered  by  any  restrict- 
ing orders, 

§  163.  Denying  fraud  or  notice. — In  order  to  entitle  a 
party  to  protection  as  a  purchaser  without  notice  he  must 
deny  notice  of  the  fraud  fully  and  particularly,  whether  the 
defense  be  set  up  by  plea  or  answer,'  and  even  though 
notice  is  not  charged  in  the  bill.-'  A  plea  of  bona  fide  pur- 
chaser for  value  and  without  notice,  must  be  as  full  under 
the  Code  as  under  the  former  system  of  equity  pleading.'* 
We  may  here  observe  that  constructive  fraud  is  not  re- 
garded as  a  fact,  but  is  treated  rather  as  a  conclusion  of  law 
drawn  from  ascertained  facts.  Hence,  as  has  been  shown, '^ 
where  an  answer  denies  the  fraud,  but  nevertheless  admits 
facts  from  which  the  existence  of  fraud  follows,  as  a  natural 


'  Passavant  V.  Cantor,  21  Abb.  N.C.  Friedenwald    v.     Mullan.     10     Heisk. 

(N.  Y.)  259.  (Tcnn.)  226. 

-Stanton   v.    Green.    34  Miss.  592;         »  Manhattan  Co.  v.  Evertson.  6  Paige 

Gallatin  v.  Cunningham,  8   Cow.   (N.  (N.  Y.)  466. 

Y.)  374;  2  Lea.  Cas.  in  Eq.,pp.  85.86;         '  Weber  v.  Rothchiid.  15  Ore.  388. 
Miller  v.  Fraley,  21  Ark,  22.     Compare         =■  See  §  162, 


244  AVOIDING    DISCOVERY.  §§    1 64- 1 66 

and  legal  if  not  a  necessary  and  unavoidable  conclusion,  the 
denial  will  not  avail  to  disprove  it.^ 

§  164.  Admission  and  avoidance. — It  is  an  established 
rule  of  evidence  in  equity  that,  where  an  answer  filed  in  a 
cause  admits  a  fact  and  insists  upon  a  distinct  fact  by  way 
of  avoidance,  the  fact  admitted  is  established,  but  the  fact 
insisted  upon  must  be  proved ;  otherwise  the  admission 
stands  as  if  the  fact  in  avoidance  had  not  been  averred.* 

§  165.  Avoiding  discoveiy.  —  An  important  question  is 
frequently  presented  as  to  whether  or  not  a  defendant  can 
defeat  a  discovery  by  pleading  that  the  disclosure  may  sub- 
ject him  to  a  criminal  prosecution.  Such  a  plea  has  been 
held  not  sufficient  to  excuse  a  discovery,^  while  in  many 
cases  it  is  regarded  as  sufificient  to  excuse  the  party  from 
answering.*  This  same  question  comes  up  in  various  forms 
in  civil  procedure,  and,  at  least  in  the  United  States,  the 
general  rule  and  practice  is  that  a  party  may  omit  to  verify 
a  pleading,  or  decline  to  make  a  disclosure  which  will  tend 
to  degrade  or  criminate  him. 

§  166.  Affirmative  relief. — No  afifirmative  relief  can  ordi- 
narily be  accorded  to  the  defendant  unless  it  is  claimed  by 
cross  petition,  or  as  an  affirmative  defense ;  yet  where  such 
relief  has  been  granted  without  objection  in  the  court  be- 
low, the  decree  will  not  always,  for  that  reason,  be  reversed 
on  appeal.^  It  may  be  here  observed  that  under  the  prac- 
tice in  Alabama  the  fact  that  the  debtor  has  other  property 
which  might  be  subjected  to  the  payment  of  the  judgment, 


'  Sayre   v.   Fredericks,  16  N.  J.  Eq.  See  Wich   v.   Parker,   22    Beav,    59. 

209 ;   s.  P.   Cunningham  v.  Freeborn,  Compare  Reg.  v.  Smith,  6  Cox  C.  C. 

II  Wend.  (N.Y.)  253.  31.     See  §  161. 

"^  Clements  v.  Moore,  6  Wall.    315  ;  ■*  Michael  v.  Gay,  i  Fost.  &  Fin.  409  ; 

Presley's  Evidence,  p.  13;  Hart  v.  Ten  Bay  State  Iron  Co.  v.  Goodall,  39  N. 

Eyck,  2  Johns.  Ch.  (N.  Y.)  62  ;  Clarke  H.  237  ;   Horstman  v.  Kaufman,  97  Pa. 

V.  White,  12  Pet.  190.  St.  147. 

'  Devoll  V.  Brownell,  5  Pick.  (Mass.)  '"  Kellogg  v.  Aherin,  48  Iowa  299. 
448 ;  Bunn  v.  Bunn,  3  New  Rep.  679. 


§   1 67  WAIVER    OF    VERIFICATION.  245 

is  not  available  to  a  voluntary  alienee  unless  presented  by 
cross  bill.^  The  homestead  may  be  protected  by  cross  bill.'* 
As  elsewhere  shown  the  vendee,  when  deprived  of  the  prop- 
erty, may  obtain  reimbursement  for  the  amount  actually 
advanced  if  no  intentional  wrong  is  shown.  It  is  intimated- 
in  McLean  v.  Letchford,'^  that  the  court  would  not  consider 
his  claim  to  reimbursement  in  the  absence  of  a  cross  bill, 
though  it  is  conceded  that  reimbursement  has  been  made, 
in  a  proper  case,  where  no  cross  bill  had  been  filed.* 

§  167.  Waiver  of  verification. — The  pleadings  in  the  class 
of  litigation  under  discussion  are  usually  verified.  Where 
code  practice  prevails,  if  a  verified  bill  of  complaint  is  filed, 
all  subsequent  pleadings  must  be  under  oath  except  demur- 
rers, which,  of  course,  only  raise  questions  of  law.  Though 
the  complainant  waive  an  answer  under  oath  from  the  de- 
fendant, yet  the  latter  may  nevertheless  verify  the  plead- 
ing. So  held  in  Clements  v.  Moore.^  Swayne,  J.,  said  : 
"  It  was  her  right  so  to  answer,  and  the  complainants  could 
not  deprive  her  of  it.  Such  is  the  settled  rule  of  equity 
practice,  where  there  is  no  regulation  to  the  contrary'. " 
It  is  said  that  the  practice  of  waiving  an  answer  under  oath 
originated  in  the  State  of  New  York,  by  virtue  of  a  pro- 
vision incorporated  in  the  statute,"  at  the  suggestion  of 
Chancellor  Walworth,  and  was  intended  to  introduce  a  new 
principle  into  the  system  of  equity  pleading.  It  was  de- 
signed to  leave  it  optional  with  the  complainant  to  com- 


'  Leonard    v.   Forcheimer,    49   Ala.  shall  waive  an  answer  under  oath,  or 

145,  shall  only  require  an  answer  with  re- 

'  Thomason  v.  Neeley,  50  Miss.  313.  gard  to  certain  specified  interrogatories, 

*  60  Miss.  182,  the  answer  of  the  defendant,  though 

*  Compare  Dunn  v.  Chambers,  4  under  oath,  except  such  part  thereof  as 
Barb.  (N.  Y.)  381;  Grant  v.  Lloyd,  20  shall  be  directly  responsive  to  such  in- 
Miss.  192  ;  Alley  v.  Connell,  3  Head  terrogatories,  shall  not  be  evidence  in 
(Tenn.)  578.     See  §  51,  his  favor,  unless  the  cause  be  set  down 

'6  Wall.    314.     The   41st   Rule    in  for  hearing  on  bill  and  answer  only,' 

Equity  of  the  Supreme  Court  now  pro-  etc. 

vides  :   "  If  the  complainant  in  his  bill  "  N.  Y.  R.  S.,  p.  175,  §  44. 


246  WAIVER    OF    VERIFICATION.  §167 

pel  a  discovery  in  aid  of  the  suit,  or  to  waive  the  oath  of 
the  defendant  if  the  complainant  was  unwilling  to  rely 
upon  his  honesty,  and  chose  to  establish  his  claim  by  other 
evidence.* 

'  See  Armstrong  v.  Scott,  3  Greene  (la.)  433 ;  Burras  v.  Looker,  4   Paige 
(N,  Y.)  227. 


CHAPTER   XL 


OF    THE    JUDGMENT    OR    DECREE. 


§  1 68.  The  judgment  conclusive. 

169.  Judgment  res  adjudicata  though 

the    form    of    procedure    be 
changed. 

170.  Judgment  appointing  receiver. 

171.  Judgment  avoids  sale  only  as  to 

creditor — not  absolutely. 

172.  Judgment  transferring  title. 

173.  No  judgment  in  favor  of  unrep- 

resented parties. 

173a.  Creditor  suing  in  place  of  as- 
signee. 

174.  Confession  of  judgment. 


§  175.   Impoundingproceedsof  a  fraud- 
ulent sale. 
176.  Accounting  by  fraudulent  ven- 
dee to  debtor. 


177.  \  Personal 


178 
179- 

180. 


judgment  against 
fraudulent  vendee. 

Money  judgment,  when  disal- 
lowed. 

Personal  judgment  against  wife. 

181.  Judgment  must  conform  to  re- 

lief demanded. 

182.  Must  accord  with  complaint. 

183.  Contradictory  verdicts. 
183^1.  New  trial. 


§  168.  The  judgment  conclusive. — The  form  of  the  judg- 
ment or  decree  in  suits  to  annul  fraudulent  transfers,  or  to 
reach  equitable  assets,  and  the  rights  secured  by  the  adjudi- 
cation, constitute  important  branches  of  our  subject.  The 
usual  attributes  attach  to  the  judgment  in  this  class  of 
cases.  It  is  regarded  as  an  estoppel  upon  the  parties  as  to 
the  subject-matter  investigated.^  But  the  estoppel  has  no 
wider  effect.  Raymond  v.  Richmond^  is  an  illustration  of 
our  meaning.  There  the  action  was  instituted  by  an  as- 
signee against  a  sheriff  and  an  execution  creditor,  for  levy- 
ing  upon  property  which  had  theretofore  been  adjudged  to 
belong  to  the  assignee,  in  an  action  to  which  the  assignee, 
the  assio^nor,  and   the  execution  defendant  were  parties. 


'  See  In  re  Hussman,  2  N.  B.  R. 
441  ;  Downer  v.  Rowell,  25  Vt.  336; 
Raymond  v.  Richmond,  78  N.  Y.  351  ; 
Bell  v.  Merrifield,  109  N.  Y.  21 1. 


'  78  N.  Y.  351  ;  second  appeal,  88 
N.  Y.  671. 


24S  JUDGMENT    RES    ADJUDICATA.  §§   1 69,    1 70 

The  court  very  properly  held  that  as  the  creditor,  under 
whose  judgment  and  execution  the  seizure  had  been  ef- 
fected, was  not  a  party  to  the  prior  litigation,  the  adjudi- 
cation did  not  conclude  him.  Hence  such  creditor  was 
entitled  to  show  that  the  transfer  made  by  the  execution 
defendant,  although  the  title  had  been  adjudged  to  be  in 
the  assignee,  was  fraudulent  in  fact,  and  the  seizure  of  the 
property  by  the  creditor  therefore  justifiable.  Manifestly 
a  purchaser  of  a  chattel  mortgage  is  not  concluded  by  a 
subsequent  adjudication  in  an  action  against  the  mortgagor 
and  mortgagee  to  which  he  was  not  a  party,  declaring  the 
mortgage  to  be  fraudulent.^  And  a  decree  between  hus- 
band and  wife,  establishing  in  the  wife's  favor  a  resulting 
trust  in  the  husband's  lands,  is  not  conclusive  upon  the 
husband's  existing  creditors.^ 

§  169.  Judgment  res  adjudicata  though  the  form  of  procedure 
be  changed. — Where  creditors  seek  by  bill  in  equity  to  sub- 
ject a  vested  estate  in  remainder  to  their  claims,  and  the 
courts  decide  against  them,  the  question  will  be  res  adju- 
dicata if  the  creditors  afterward  try  to  levy  by  execution 
on  the  same  interest,  when  it  has  become  an  estate  in  pos- 
session by  the  death  of  the  life  tenant.^ 

§  170.  Judgment  appointing  receiver. — The  particular  form 
of  a  decree  in  a  creditor's  action  to  cancel  a  fraudulent 
conveyance  is,  in  some  instances,  of  vital  importance  to  the 
complainant.  A  court  of  equity  undoubtedly  possesses 
the  power  to  pronounce  a  judgment  annulling  and  clearing 
away  the  fraudulent  obstruction,  and  then,  by  acting  upon 
the  person  of  the  debtor,  to  compel  him  to  convey  the  title 
to  a  receiver.^     The  practitioner,  however,  should   be  cau- 

'  Zoeller  v.  Riley,  100  N.  Y.  102.  19  N.  Y.  374;  Cole  v.  Tyler,  65  N.  Y. 

-  Old   Folks'   Society  v.  Millard,  86  ^^.    Compare  McLean  v.  Carj',  88  N. 

Tenn.  657 ;  Humes  v.  Scruggs,  94  U.  Y.  391  ;  White's  Bank    of  Buffalo   v. 

S.  22  ;  Branch  Bank  of  Montgomery  v.  Farthing,  9  Civ.  Pro.  (N.  Y.)  66  ;  S.  C. 

Hodges,  12  Ala.  118.  loi  N.  Y,  344;  New  York  Life  Ins.  Co. 

3  Nichols  V.  Levy,  5  Wall.  433.  v.    Mayer,    19    Abb.    N.    C.    (N.  Y.) 

••  Chautauque  County  Bank  v.  Risley,  92. 


§    170  JUDGMENT    APPOINTING    RECEIVER.  249 

tious  about  entering  up  such  a  judgment,  as  the  title  which 
the  receiver  or  a  purchaser  from  him  acquires  rests  upon 
the  debtor's  own  conveyance,  and  has  no  relation  to  the 
original  judgment  which  is  the  foundation  of  the  bill  in, 
equity.  It  has  been  intimated  that  when  the  creditor  pur- 
sues this  course  he  abandons  the  lien  of  his  judgment  and 
seeks  satisfaction  of  his  debt  out  of  the  debtor's  property 
generally.  In  Chautauque  County  Bank  v.  Risley,^  the 
creditor's  action  was  founded  upon  the  first  judgment  re- 
covered against  the  debtor,  and  the  property  was,  under 
the  order  of  the  court,  conveyed  by  the  debtor  to  a  re- 
ceiver. It  was  decided  that  another  creditor,  whose  judg- 
ment was  subsequent  to  that  which  was  the  foundation  of 
the  creditors'  bill,  but  which  was  entered  prior  to  the  time 
the  bill  was  filed,  might  sell  the  real  estate  on  execution, 
and  the  purchaser  at  such  sale  would  acquire  a  better  title 
than  the  grantee  from  the  receiver.  The  creditor  should 
therefore  be  careful  not  to  sacrifice  the  advantage  which  the 
prior  judgment  gives  him,  and,  having  cleared  the  fraudu- 
lent conveyance  out  of  the  way,  should,  especially  if  subse- 
quent judgments  have  been  entered,  proceed  by  execution 
and  sale  on  his  first  judgment.^  In  Cole  v.  Tyler ^  the 
judgment  set  aside  the  conveyance  and  merely  directed 
that  the  receiver  should  sell,  execute  deeds,  etc.  It  is  not 
easy  to  discover  the  theory  upon  which  the  receiver  could 
be  said  to  have  acquired  the  title.  The  improper  form  of 
the  judgment  was  assigned  as  a  ground  for  its  reversal,  but 
the  court  said  that  if  the  direction  to  sell,  etc.,  was  errone- 
ous, the  error  would  not  be  rectified  by  an  appeal,  but  the 
correct  procedure  was  by  motion  to  correct  the  judgment, 
the  matter  being  one  merely  of  detail,  and  not  affecting  the 
decision  upon  its  merits.    . 

'  19  N.  Y.  374.  Warner,  12  Hun  (N.  Y.)  309;  Cole  v. 

«  Compare  White's  Bank  of  Buffalo  v.  Tyler,  65  N.  Y.  73. 

Farthing,  loi  N.  Y.  344  ;  Shand  v.  Han-  ^  65  N.  Y.  n. 
ley,  71  N.  Y.  319  ;  Union  Nat.  Bank  v. 


250  JUDGMENT    AVOIDS    SALE.  §   I?! 

§  171.  Judgment  avoids  sale  only  as  to  creditor — not  abso- 
lutely.— The  principle  must  always  be  kept  in  view,  that  a 
fraudulent  sale  is  good  between  the  parties.  Giving  effect 
to  this  doctrine  generally  controls  the  form  of  the  judg- 
ment in  a  creditors'  action.  Thus  in  Orr  v.  Gilmore,^  the 
conveyance  was  found  to  be  voidable  as  against  the  cred- 
itor, but  the  court  decided  that  the  only  judgment  to  which 
the  complainant  was  entitled  was  a  decree  for  the  sale  of 
the  lot  in  suit  and  the  payment  of  the  amount  of  the  claim 
with  interest  and  costs.  The  sale  being  valid  between  the 
debtor  and  the  fraudulent  vendee,  there  was  nothing  to 
warrant  a  judgment  declaring  it  null  and  void  as  to  every 
one.  In  the  case  cited  the  judgment  which  was  held  by 
the  higher  court  to  be  erroneous  declared  that  the  property 
belonged  to  the  debtor.  This  was  manifestly  wrong,  for, 
where  it  does  not  appear  that  there  are  other  creditors,  the 
judgment,  whether  it  directs  a  sale  on  execution  by  the 
sheriff,^  or  by  a  receiver,^  should  only  declare  the  convey- 
ance void  as  to  the  plaintiff's  judgment,  and  direct  a  sale 
for  the  payment  of  that  alone.  The  grantee  is  entitled  to 
all  that  might  remain  of  the  proceeds  in  the  shape  of  sur- 
plus,* and,  when  the  creditor  is  paid,  the  decree  cancelling 
the  conveyance  is  satisfied.^  "  The  action  of  chancery," 
said  Nelson,  J.,  "  upon  the  fraudulent  grantor  or  assignee, 
is  only  to  the  extent  of  supplying  a  remedy  to  the  suitor 
creditor ;  as  to  all  other  parties,  the  assignment  remains  as 
if  no  proceedings  had  been  taken."  ^  Under  the  Civil  Code 
in  Louisiana  if  the  action  is  successful  the  judgment  is  that 
the  conveyance  be  avoided  as  to  its  effect  on  the  complain- 
ing creditors.'' 

'  7  Lans.   (N.  Y.)   345  ;   Duncan   v.  ^  Rawson  v.  Fox,  65  111.  202.     See 

Custard,  24  W.  Va.  731.  Bostwick  v.    Menck,   40   N.  Y.    383; 

*  Orr  V.  Gilmore,  7  Lans.  (N.  Y.)  345.  Kerr  v.  Hutchins,  46  Tex.  384. 

'  Chautauque  Co.  Bank  v.  Risley,  19  ^  McCalmont  v.  Lawrence,  i  Blatchf. 

N.  Y.  369.  235. 

•»  Van  Wyck  v.  Baker,  10  Hun  (N.  '  Claflin    v.    Lisso,    27    Fed.    Rep. 

Y.)  40 ;  Collinson  v.  Jackson,  8  Sawyer  420. 
365  ;  In  re  Estes,  6  Sawyer  460. 


§§   172,  173  JUDGMENT    TRANSFERRING    TITLE.  25 1 

§  172.  Judgment  transferring  title. — The  court  has  no 
power  to  effect  a  transfer  of  title  to  land  by  ordering  a  sale 
of  it,  except  in  special  cases  authorized  by  statute,  such  as 
mortgage  and  partition  sales,  sales  of  infants'  lands,  ordi- 
nary execution  sales,  and  the  like.  In  suits  brought  to 
reach  lands  conveyed  with  intent  to  defraud  creditors,  the 
proper  decree,  in  New  York  at  least,  is  to  set  aside  the 
fraudulent  conveyance,  and  permit  the  creditor  to  issue  an 
execution  and  sell  under  it,  or  compel  the  debtor  to  convey 
to  a  receiver  and  direct  the  latter  to  sell.  It  was  said  by 
Gilbert,  J.,  in  Van  Wyck  v.  Baker,*  that  "  the  fraudulent 
deed  being  annulled,  the  title  remains  in  the  debtor,  and 
can  be  passed  only  by  her  deed."*  If,  however,  the  re- 
ceiver is  directed  to  sell  without  obtaining  a  prior  convey- 
ance from  the  debtor  the  erroneous  judgment  is  not,  as  we 
have  seen,*  to  be  rectified  by  an  appeal  from  the  judgment, 
but  a  motion  should  be  made  to  correct  it.*  Where  an 
execution  purchaser  seeks  to  cancel  a  cloud  on  his  title,  of 
course  no  conveyance  is  requisite,  as  the  plaintiff  will  be 
left  in  the  full  enjoyment  of  the  title  acquired  by  the  sher- 
iff's deed.^ 

§  173.  No  judgment  in  favor  of  unrepresented  parties. — In 
a  case  before  the  Supreme  Court  of  California'^  it  was  said 
to  be  an  anomaly  in  practice  to  render  judgment  in  favor 
of  a  party  who  was  not  before  the  court,  and  was  not  rep- 


'  10  Hun  (N.  Y.)  40.  grantee,  but  the  decree  may  proceed 

*  Citing  Jackson  v.  Edwards,  7  Paige  to  vest  the  title  in  the  plaintiff.  See 
(N.  Y.)  404;  Chautauque  Co.  Bank  v.  Kinealy  v.  Macklin,  2  Mo.  App.  241  ; 
White,  6  N.  Y.  236  ;  Chautauque  Co.  Apperson  v.  Burgett,  33  Ark.  328.  The 
Bank  v.  Risley,  19  N.  Y.  369.  See  logical  theory  upon  which  this  proced- 
Dawley  v.  Brown,  65  Barb.  (N.  Y.)  107.  ure  is  founded  is  not  easily  discovered. 

'  See  §  170.  In  the  absence  of  statutorj'  authority 

•*  Cole  V.  Tyler,  65  N.  Y.  TJ.  how  can  a  court  become  possessed  of 

*  Hager  v.  Shindler,  29  Cal.  69.  It  any  title  which  it  can  confer  or  bestow 
is  said  in  Ames  v.  Gilmore,  59  Mo,  upon  the  creditor.'  Its  province  is  to 
541,  that  courts  of  chancery  may,  in  clear  incumbrances  from  titles,  or  to 
suits  to  annul  a  fraudulent  deed,  not  coerce  transfers. 

only  divest   the   title   of  a  fraudulent  '  Bachman  v,  Sepulveda,  39  Cal.  688. 


252  CREDITOR    SUING.  §§   1 73«,    1 74 

resented  in  any  manner  in  the  action.  This  observation 
was  made  in  an  action  brought  by  a  creditor  against  a 
fraudulent  grantee  to  set  aside  a  conveyance  made  by  a 
deceased  debtor,  the  ground  of  relief  assigned  being  that 
the  conveyance  was  made  to  hinder  and  delay  creditors. 
The  representative  of  the  deceased  debtor  was  not  a  party. 
The  court  very  properly  decided  that  it  was  error  to  render 
a  judgment  declaring  a  trust  against  the  fraudulent  grantee 
and  in  favor  of  the  unrepresented  estate  of  the  grantor. 

§  173^.  Creditor  suing  in  place  of  assignee. — If  an  as- 
signee refuses  in  a  proper  case  to  institute  proceedings  to 
get  possession  of  the  assigned  property,  the  creditors  col- 
lectively, or  one  suing  in  the  right  of  all  who  may  join  in 
the  action,  may  compel  the  execution  of  the  trust  in  equity, 
or  cause  the  removal  of  the  assignee  and  the  appointment 
of  another.  It  seems,  however,  that  in  either  case  a  decree 
for  a  single  debt  would  be  erroneous  ;  the  decree  must  fol- 
low the  assignment,  and  the  fruits  of  a  recovery  must  be 
distributed  according  to  its  terms.^ 

§  174.  Confession  of  judgment. — A  transfer  of  property 
by  a  person  heavily  indebted,  made  by  means  of  a  confes- 
sion of  judgment  and  sale  on  execution,  was  adjudged  void 
in  Metropolitan  Bank  v.  Durant,^  upon  proof  that  it  was 
intended  to  defraud  creditors,  and  that  the  purchaser  had 
knowledge  of  the  facts.  Collusive  judgments,  as  we  have 
seen,"^  are  always  open  to  the  attack  of  creditors.  A  judg- 
ment entered  by  confession  upon  an  insufficient  statement 
of  facts  is  effectual  and  binding  between  the  parties,  and  a 
sale  of  property  under  it  is  legal  and  valid  against  all  the 
world  except  existing  creditors  having  a  lien  upon  the 
property.^ 

'  Crouse  v.  Frothingliam,  97  N.  Y.  '  See  §  74,  and  note. 

105.     Compare  Bate  v.  Graham,  11  N.  ^  Miller  v.  Earle,  24  N.  Y.  112.  Com- 

Y.  237  ;  Everingham  v.  Vanderbilt,  12  pare  Marrin  v.  Marrin,    27    Hun    (N. 

Hun  (N.  Y.)  75.  Y.)  602  ;  Dunham  v.  Waterman,  17  N. 

-  22  N.  J.  Eq.  35,  Y.  9;  Mitchell  V.  Van  Buren,  27  N,Y.30o. 


§§  175.  I?^    IMPOUNDING  PROCEEDS  OF  SALE.  253 

§  175.  Impounding  proceeds  of  a  fraudulent  sale. — While 
it  may  be  true  that  the  money  received  by  a  fraudulent 
vendee  from  the  sale  of  the  property  is  not  legally  a  debt 
due  by  the  vendee  to  the  fraudulent  vendor,  because  the 
court  will  not  assist  to  enforce  or  render  effectual  the 
fraud,  yet  in  the  intention  of  the  parties  it  is  a  debt,  and 
creditors  may  treat  it  as  such  and  attach  or  reach  it  bv 
judicial  process.^  The  beneficent  and  remedial  provisions 
of  the  statute  13  Eliz.  would  be  of  little  avail  if  a  fraudu- 
lent grantee  could  pass  the  property  over  to  a  mere  volun- 
teer without  notice  of  the  fraud,  and  upon  that  ground 
claim  that  the  property  or  its  proceeds  were  safe  from  the 
pursuit  of  creditors.* 

§  176.  Accounting  by  fraudulent  vendee  to  debtor. — 
Though  a  party  may  have  intended  to  defraud  tiie  cred- 
itors of  a  debtor  by  taking  and  converting  his  propertv 
into  cash,  such  intent  is  rendered  harmless  by  his  deliver- 
ing the  proceeds  of  the  sale  to  the  debtor  or  his  authorized 
agent.  If  the  party  has  accounted  to  the  debtor  for  the 
proceeds  of  the  property  before  proceedings  are  taken 
against  him  by  the  creditor,  he  cannot  be  forced  to  account 
for  it  over  again. ^     The  creditor  must  show  that  something 


1  Heath  V.   Page,   63   Pa.   St.   124;  Blood,  57  Barb.  (N.  Y.)  671  ;  Clements 

French  v.  Breidelman,  2  Grant  (Pa.)  v.  Moore,  6  Wall.  299  ;  Davis  v.  Graves, 

319;  Mitchell  V.  Stiles,  13  Pa.  St.  306.  29  Barb.  (N.  Y.)  480.     In  Greenwood 

""Where  a  transfer  of  property  is  v.   Marvin,    iii  N.   Y.    434,  the  New 

made,  which  is  held  void   under   the  York   Court   of  Appeals   said:    "The 

provisions  of  the   bankruptcy   act,   as  equitable  rights  of  the  parties  were  to 

against  the  assignee  in  bankruptcy,  the  remain  the  same  ;  the  legal  owner  was 

transferee  is  properly  to  be   regarded  to  account  to  the  other  party  for  the 

as  a  trustee  for  the  plaintiff,  and  to  be  net  profits   of  the   business,   and    no 

held    to    account   as   such,   especially  other   mode   of  division    is  suggested 

where,  as  in  this  case,  it  appears  that  than    that   of  equality,      if,  therefore, 

some,   if  not  all,  of  the  property,  has  that  agreement  effected  any  change  in 

passed    away    from    the    transferee."  the  relations  of  the  parties,  it  operated 

Schrenkeisen  v.  Miller,  9  Ben.  65.  as   a   temporary  expedient    to    bridge 

■^  Cramer  v.  Blood,  57  Barb.  (N.  Y.)  over  the  period  of  Le  Grand  Marvin's 

163,  affi'd  48  N.  Y.  684;    Murphy  v.  pecuniary  embarrassment,  presumably 

Briggs,  89  N.  Y.  446.     See  Cramer  v.  with  a   view  of  restoring  the  original 


254 


PERSONAL    JUDGMENT. 


§  -^n 


remains  which  ought  to  be  applied  on  the  judgment. 
Where  a  third  person  has  in  good  faith  received  a  convey- 
ance of  the  property  in  trust  for  an  alleged  fraudulent 
grantee,  and  has  subsequently  conveyed  it  to  such  grantee 
pursuant  to  the  trust,  it  has  been  held  that  such  third  per- 
son is  not  a  proper  defendant  in  a  creditor's  action,  simply 
because  no  cause  of  action  exists  against  him.^  The  trustee 
under  an  assignment  of  lands  which  is  declared  fraudulent 
at  the  suit  of  a  creditor,  cannot  be  compelled  to  account 
for  the  rents  received  and  applied  according  to  the  pro- 
visions of  the  trust,  before  the  commencement  of  the 
action.^ 

§  177.  Personal  judgment  against  fraudulent  vendee. — The 
right  of  a  judgment-creditor  to  a  personal  or  money  judg- 
ment against  a  fraudulent  vendee  of  his  debtor  ^  comes  up 


relations  of  the  parties  at  some  future 
time  when  it  would  be  safe  to  do  so. 
If  that  agreement  was  executed,  as 
seems  very  probable,  with  a  view  of 
hindering  and  delaying  the  creditors  of 
Le  Grand,  it  was  still  competent  for 
the  parties,  in  the  absence  of  interfer- 
ence by  creditors,  to  rescind  it  at  any 
time,  and  restore  to  each  other  an  equal 
legal  interest  in  the  property  acquired 
under  such  agreement." 

'  Spicer  v.  Hunter,  14  Abb.  Pr.  (N. 

Y.)4. 

Relief  at  law  ajtd  in  equity. — In 
Clements  v.  Moore,  6  Wall.  312,  the 
court  said :  "  When  the  fact  of  fraud  is 
established  in  a  suit  at  law,  the  buyer 
loses  the  property  without  reference  to 
the  amount  or  application  of  what  he 
has  paid,  and  he  can  have  no  relief 
either  at  law  or  in  equity.  When  the 
proceeding  is  in  chancery,  the  juris- 
diction exercised  is  more  flexible  and 
tolerant.  The  equity  appealed  to — 
while  it  scans  the  transaction  with  the 
severest  scrutiny — looks  at  all  the  facts, 
and  giving  to  each  one  its  due  weight, 


deals  with  the  subject  before  it  accord- 
ing to  its  own  ideas  of  right  and  justice. 
In  some  instances  it  visits  the  buyer 
with  the  same  consequences  which 
would  have  followed  in  an  action  at 
law.  In  others  it  allows  a  security  to 
stand  for  the  amount  advanced  upon  it. 
In  others  it  compels  the  buyer  to  ac- 
count only  for  the  difference  between 
the  under  price  which  he  paid  and  the 
value  of  the  property.  In  others,  al- 
though he  may  have  paid  the  full  value, 
and  the  property  may  have  passed  be- 
yond the  reach  of  the  process  of  the 
court,  it  regards  him  as  a  trustee,  and 
charges  him  accordingly.  Where  he 
has  honestly  applied  the  property  to  the 
liabilities  of  the  seller,  it  may  hold  him 
excused  from  further  responsibility." 

'  Collumb  v.  Read,  24  N.  Y.  505. 
See  §  26.  As  to  when  a  judgment 
against  an  assignee  cancelling  an  as- 
signment as  fraudulent  is  a  final  judg- 
ment, and  how  the  same  should  be 
entered  and  enforced,  see  Myers  v. 
Becker,  95  N.  Y.  486. 

3  See  §  62. 


§    177  PERSONAL    JUDGMENT.  255 

frequently  for  adjudication,  and  is  discussed  in  man}^  of  the 
authorities.  In  the  recent  case  of  Ferguson  v.  Hillman/ 
in  the  Supreme  Court  of  Wisconsin,  the  conveyances  and 
mortgages  had  been  adjudged  fraudulent  as  to  creditors, 
and  knowledge  of  the  fraud  had  been  fastened  upon  the 
grantee.  The  familiar  principle  elsewhere  discussed  to  the 
effect  that  a  fraudulent  grantee  in  possession  of  the  prop- 
erty of  the  debtor  cannot  be  protected,  as  against  the  cred- 
itors of  the  debtor,  even  to  the  extent  of  the  money  or 
other  consideration  given  for  the  transfer,  was  invoked  and 
applied.*^  The  court  observed  that  it  seemed  to  follow  as 
a  necessary  consequence  that  a  fraudulent  grantee  could 
not  be  protected  in  the  possession  of  the  proceeds  of  such 
property  received  by  him  upon  effecting  a  sale  of  it.  The 
property  in  the  hands  of  a  fraudulent  purchaser  is  held  by 
him  in  trust  for  the  creditors  of  the  fraudulent  vendor,  and 
when  the  property  is  converted  into  money  the  fund  thus 
created  is  impressed  with  the  same  trust.  Were  the  rule 
otherwise,  the  grantee  might  defeat  the  creditor's  claim  by 
fraudulently  changing  the  character  of  the  property.  In 
equity  such  money  in  the  hands  of  the  fraudulent  grantee 
is  a  fund  held  for  the  benefit  of  the  creditors  of  the  grantor ; 
and  while  such  creditors  may  not  be  able  to  maintain  an 
action  at  law  for  money  had  and  received  for  their  use,  be- 
cause they  were  never  the  owners  of,  or  had  title  to  the 
property  which  had  been  converted  into  money,  yet  a  court 
of  equity,  having  all  the  interested  parties  before  it,  pos- 
sessed the  power  to  direct  such  application  of  it  as  would 
be  just.  The  court  further  held  that  if,  in  a  proper  case, 
equity  had  the  power  to  order  the  fraudulent  grantee  to 
pay  or  apply  the  money  received  by  him  in  satisfaction  of 


'  55  Wis.  190.     See  Mason  v.  Pier-  Bank  v.  Warner,  12  Hun  (N.  Y.)  306; 

ron,  69  Wis.  585.  Briq-gs  v.  Merrill,  58  Barb.  (N.  Y.)  3S9 ; 

'^  Gardinier    v.   Otis,    13    Wis.   460;  Fullerton  v.  Viall.  .]2  How.  Pr.  (N.  Y.) 

Stein  V.  Hermann,  23  Wis.  132  ;  Avery  294. 
V.  Johann,  27  Wis.  246  ;  Union  Nat. 


256  PERSONAL    JUDGMENT.  §    1 77 

the  debt  of  a  creditor,  then  the  fact  that  it  directed  a  per- 
sonal judgment  to  be  rendered  against  him  for  the  money 
so  received,  and  that  the  amount  be  collected  on  execution, 
was  merely  a  matter  of  form,  which  did  not  prejudice  his 
rights,  and  of  which  he  could  not  complain.  Fullerton  v. 
VialP  is  an  authority  in  point  in  this  discussion.  This 
important  case,  which  certainly  embodies  features  of  vital 
interest  to  creditors  and  vendees  whose  good  faith  is  ques- 
tioned, seems  to  have  been  affirmed  both  at  the  general 
term  of  the  Supreme  Court  and  in  the  Court  of  Appeals 
of  New  York,  without  any  written  opinion  having  been 
given.  The  published  report  of  the  case  was  prepared  by 
one  of  the  counsel.  The  facts  were  briefly  as  follows  : 
The  defendant  had  taken  from  a  debtor  a  conveyance  of 
real  estate,  subject  to  a  mortgage  of  $800,  agreeing  to  pay 
$1,000  in  addition.  The  sum  of  $500  was  paid  to  the 
debtor  in  cash,  and  $500  by  cancelling  a  debt  due  from  the 
debtor  to  the  grantee.  Before  the  creditor's  suit  was  insti- 
tuted the  grantee  had  sold  the  real  estate  to  a  bona  fide 
purchaser,  and  realized  from  such  sale  the  sum  of  $2,270. 
The  court  found  that  the  conveyance  was  made  in  fraud  of 
the  pfrantor's  creditors,  and  that  the  creditors  were  entitled 
to  judgment  against  the  fraudulent  grantee  for  the  value  of 
the  premises  over  and  above  the  prior  valid  incumbrances. 
The  recovery  was  not  limited  to  the  amount  received  by 
the  fraudulent  grantee  on  the  sale,  but  his  liability  was  held 
to  extend  to  the  value  of  the  property  fraudulently  received 
by  him,  and  which  he  had  put  beyond  the  reach  of  the 
creditors  of  his  fraudulent  grantor,  subject,  as  already 
stated,  to  the  prior  valid  incumbrances.  The  grantee  must 
have  found  in  this  case  that  the  way  of  the  transgressor 
was  hard,  for  he  was  neither  allowed  credit  for  his  own 
debt  which  constituted  part  of  the  consideration,  nor  for 
the  $500  paid  to  his  grantor  in  cash.^ 

'  42  How.  Pr.  (N.  Y.)  294.  12   Hun  306-308;   Ferguson  v.   Hill- 

'  See  Union  Nat.  Bank  v.  Warner,     man,  55  Wis.  192. 


§    1/8  PERSONAL   JUDGMENT.  257 

§  178.  —  Murtha  v.  Curley  ^  apparently  puts  this  question 
of  the  creditors'  right  to  a  personal  judgment  against  the 
fraudulent  vendee  at  rest  in  New  York.  The  vendee  had 
foreclosed  a  fictitious  chattel  mortgage  upon  the  property 
of  the  debtor,  and  had  converted  the  proceeds  which  ex- 
ceeded the  creditors'  claim  to  his  own  use.  A  money 
judgment  was  directed  against  the  vendee  for  the  amount 
of  the  plaintiffs'  claim.  The  court  held  that  this  did  not 
stamp  the  action  as  being  legal  rather  than  equitable,  and 
that  the  judgment  was  proper  in  form.  Earl,  J.,  said  :  "  A 
court  of  equity  adapts  its  relief  to  the  exigencies  of  the 
case  in  hand.  It  may  restrain  or  compel  the  defendant  ; 
it  may  appoint  a  receiver,  or  order  an  accounting  ;  it  may 
compel  specific  performance,  or  order  the  delivery  to  the 
pla'ntiff  of  specific  real  or  personal  property  ;  or  it  may 
order  a  sum  of  money  to  be  paid  to  the  plaintiff,  and  give 
him  a  personal  judgment  therefor."  Where  the  property 
has  been  converted  there  is  nothing  to  be  sold,  and  no  oc- 
casion for  a  receiver  and  no  special  need  to  state  an  ac- 
count.* In  Williamson  v.  Williams,^  the  fraudulent  vendee 
had  sold  the  land  to  a  bona  fide  purchaser,  and  it  was  said 
that  having  deprived  the  creditor  of  the  property,  and  ob- 
tained its  price,  he  must  be  held  responsible  by  reason  of 
this  fraudulent  disposition  of  the  property  to  the  amount 
of  the  consideration  received  by  him.  The  money  stood 
for  the  land  in  his  hands.* 


'  90  N.  Y.  372  ;  s.  c.  12  Abb.  N.  C.  '  See  also  Gillett  v.  Bate.  86  N.  Y. 

(N.  Y.)  12,  and  notes  ;  S.  P.  Warner  v.  87  ;  S.  C.   10  Abb.  N.  C.  (N.  Y.)  88  ; 

Blakeman,  4  Abb.  Ct.  App.  Dec.  (N.  Steere  v.  Hoagland,  50  HI.  377  ;  Quinby 

Y.)  530.     In  Solinsky  v.  Lincoln  Sav-  v.  Strauss,  90  N.  Y.  664. 

ings   Bank,    85   Tenn.   372,  the  court  Mi  Lea  (Tenn.)  370. 

say:  "When  a  fraudulent  vendee  has  «  In  Wheeler  v.  Wallace,  53  Mich. 355, 

so  concealed  or  disposed  of  the  prop-  it  was  held  that  creditors  levying  upon 

erty   that   creditors   cannot   reach    or  property  fraudulently  transferred  had  no 

identify  it,  the  creditor  may,  in  equity  right  to  take  from    the  transferee  the 

at  least,  recover  the  proceeds  or  value  increase  ifthey  had  allowed  it  to  accumu- 

thereof."     Compare  Eads  v.  Mason,  16  late  for  a  long  time  under  his  manage- 

Bradw.  (111.)  545.  ment  before  attacking  the  transaction. 
17 


258  MONEY   JUDGMENT.  §§  I. 79,  180 

§  179.  Money  judgment,  'when  disallowed. — McLean  v. 
Gary/  in  the  New  York  Court  of  Appeals,  is  a  peculiar 
case  in  which  a  money  judgment  was  denied.  Plaintiff 
was  a  judgment-creditor.  It  was  proved  substantially  that 
the  debtor  Greene  sold  to  the  other  defendants  certain 
machinery  with  an  agreement  that  $12,000  of  the  consider- 
ation was  to  be  paid  in  steam  power.  At  a  time  when 
$9,000  remained  unpaid  a  settlement  was  effected  practi- 
cally on  the  basis  of  a  balance  of  $4,000.  The  court 
avoided  the  settlement  as  being  fraudulent  against  the 
creditor,  and  the  question  as  to  the  authority  to  render  a 
money  judgment  against  the  defendants  was  presented. 
The  complaint,  it  may  be  observed,  prayed  that  the  settle- 
ment be  set  aside  as  fraudulent,  that  a  receiver  be  ap- 
pointed, and  that  the  creditor  be  paid  out  of  the  moneys 
realized  by  the  receiver.  No  money  judgment  was  de- 
manded, and  the  court  held  that  under  the  circumstances 
none  was  authorized,  as  the  contract  was  payable  in  steam 
power  and  not  in  money.  Under  the  practice  in  Illinois 
it  seems  to  be  implied  that  a  personal  or  money  judgment 
is  improper  in  an  action  to  annul  a  fraudulent  transfer.  In 
Patterson  v.  McKinney^  this  objection  was  taken,  but  the 
court  said  that  as  the  cause  was  to  be  remanded  it  could  be 
obviated  hj  making  an  alternative  decree  providing  that  if 
the  judgment  was  not  paid  within  a  time  to  be  limited,  the 
land  should  be  sold  on  execution.  In  Dunphy  v.  Klein- 
smith,^  which  was  a  creditors'  suit  against  a  fraudulent 
vendee,  a  judgment  for  damages  was  held  to  be  improper  ; 
the  correct  relief  was  said  to  be  by  decree  for  an  account.* 

§  180.  Personal  judgment  against  wife. — Where  property 
is  conveyed  to  a  wife  in  fraud  of  her  husband's  creditors,  it 
seems  that  a  judgment  in  personam  for  its  value  cannot  be 
taken  against  the  wife,  nor  in  case  of  her  death,  against  her 


'88N.  Y.  391.  3  II  Wall.  615. 

'■  97  111.  52.  "  See  §  51. 


§  l8o       PERSONAL  JUDGMENT  AGAINST  WIFE.        259 

executors.^  Miller,  J.,  said  :  "  While  the  books  of  reports 
are  full  of  cases  in  which  real  or  personal  property  con- 
veyed to  the  wife  in  fraud  of  the  husband's  creditors  has 
been  pursued  and  subjected  to  the  payment  of  his  debts 
after  it  had  been  identified  in  her  hands,  or  in  the  hands  of 
voluntary  grantees  or  purchasers  with  notice,  we  are  not 
aware  of  any  well-considered  case  of  high  authority  where 
the  pursuit  of  the  property  has  been  abandoned,  and  a  judg- 
ment in  persona7n  for  its  value  taken  against  the  wife. 
Certainly  no  such  doctrine  is  sanctioned  by  the  common 
law  ;  and,  though  the  present  suit  is  a  bill  in  chancery,  the 
decree  in  this  case  is  nothing  more  than  a  judgment  at  law, 
and  could  as  well  have  been  maintained  in  a  separate  suit 
at  law  for  the  money  as  in  this  suit.  And  the  liability  of 
the  executors  of  the  wife  to  this  personal  judgment  must 
depend  on  the  same  principle  as  if,  abandoning  the  pursuit 
of  the  res,  the  assignee  had  brought  an  action  at  law  for 
the  money."  The  modifications  in  the  law  peculiar  to  the 
relationship  of  husband  and  wife  with  reference  to  their 
property  are  so  many  and  important  that  it  would  be  im- 
practicable to  attempt  to  formulate  rules  intended  for  gen- 
eral application  to  the  subject.  These  Supreme  Court 
cases  certainly  accomplish  an  unfortunate  result,  and  prob- 
ably will  not  be  universally  accepted,  if,  indeed,  the  princi- 
ples they  embody  are  not  superseded  in  some  States  by  the 
removal  of  the  disabilities  incident  to  coverture.  In  Post 
V.  Stiger^  it  appeared  that  property  had  been  conveyed  to 
a  wife  in  fraud  of  the  husband's  creditors.  The  wife  set 
up  as  a  defense  the  fact  that  she  had  disposed  of  it.  The 
court  said  that  she  must  answer  for  its  value.  An  attempt 
was  made  to  show  that  she  had  subsequently  lost  by  bad 
bargains  all  the  property  that  she  had  acquired  by  the  con- 
veyance.    The  proofs  did  not  seem  to  sustain  this  view, 

'  Phipps  V.  Sedgwick,  95  U.   S.  9;     S.  304;  Huntington  v.   Saunders,  120 
followed,  Trust  Co.  v.  Sedgwick,  97  U.     U.  S.  78. 

«  29  N.  J.  Eq.  558. 


26o  FORM    OF    JUDGMENT.  §    l8l 

but  the  court  remarked  that  even  if  it  had  been  so  proved 
this  would  not  relieve  her  from  liability,  and  continuing 
said  :  "  She  held  the  property  as  trustee  of  her  husband's 
creditors,  and  dealt  with  it  at  her  peril.  A  fraudulent 
grantee  cannot  repel  the  claims  of  the  creditors  of  the 
grantor,  by  simply  saying  :  '  I  have  lost,  by  imprudent  bar- 
gains or  collusive  foreclosures,  the  property  I  attempted  to 
conceal,  and,  therefore,  I  am  answerable  for  nothing.' "  It 
may  be  urged  that  this  case  is  a  dictum  on  the  point  cited. 
This  is  probably  a  legitimate  criticism,  for  the  court  prac- 
tically found  that  the  wife  still  had  the  property  ;  yet  as  an 
expression  of  opinion  of  a  highly  intelligent  court  pointing, 
as  we  claim,  in  the  right  direction,  we  regard  the  dictum  as 
worthy  of  adoption  as  an  absolute  authority. 

§  i8i.  Judgment  must  conform  to  relief  demanded. — As  a 
general  rule,  the  judgment  must  harmonize  with  the  de- 
mand for  relief.^  In  Curtis  v.  Fox^  the  plaintiff  failed  to 
establish  that  the  conveyance  by  the  debtor  to  his  wife  was 
fraudulent,  and  the  complaint  was  consequently  dismissed. 
It  appeared  that  the  wife  died  pending  the  action,  and  the 
creditor  contended  that  the  debtor  defendant  thereupon  ac- 
quired a  legal  interest  in  her  real  estate,  and  that,  instead 
of  dismissing  the  complaint,  a  judgment  should  have  been 
rendered  providing  for  the  sale  of  such  interest,  and  an  ap- 
plication of  the  proceeds  to  the  satisfaction  of  the  creditor's 
judgment.  Cases  like  the  Bank  of  Utica  v.  The  City  of 
Utica,^  and  Cumming  v.  The  Mayor  of  Brooklyn,^  were 
cited,  in  which  it  was  held  that,  where  both  parties  agree  to 
submit  the  case  to  the  jurisdiction  of  chancery,  or  the  de- 
fendant omits  to  raise  the  objection  by  plea  or  in  his  answer, 
the  court  will  retain  jurisdiction  and  determine  the  case, 
although  the  plaintiff  may  have  an  adequate  remedy  at  law. 
But  the  court  held  that  the  principle  of  these  cases  had  no 


Dunphy  v.  Kleinsmith,  1 1  Wall.  615.         ^4  Paige  (N.  Y.)  399. 
47  N.  Y.  299.  Mi  Paige  (N.  Y.)  596. 


§    l82  MUST    ACCORD    WITH    COMPLAINT.  26 1 

application  to  the  case  of  Curtis  v.  Fox  above  cited,  because 
in  that  case  Fox  had  no  legal  interest  in  the  land,  and  did 
not  acquire  any  until  long  after  putting  in  his  answer. 
The  complaint  did  not  allege  any  such  interest,  but  sought 
relief  solely  upon  the  ground  that  the  title  of  the  wife  was 
fraudulent  as  against  the  plaintiff,  and  this  was  the  matter 
litigated.  As  the  husband  had  no  opportunity  to  raise  the 
objection  that  a  sale  on  execution  was  the  proper  remedy 
of  the  plaintiff,  so  far  as  the  interest  acquired  upon  the 
death  of  his  wife  was  concerned,  his  silence  did  not  waive  it. 

§  182.  Must  accord  with  complaint. — It  has  been  held  in 
New  York  to  be  no  ground  of  reversal  of  a  judgment  that 
the  relief  it  extended  was  not  prayed  for  in  the  complaint, 
provided  it  was  such  a  decree  as  the  plaintiff  was  entitled 
to  upon  the  evidence.^  While  the  effect  of  an  erroneous 
prayer  in  a  complaint  can  ordinarily  be  overcome,  yet  the 
general  rule  is  that  the  allegations  of  the  complaint  must 
support  the  judgment.  Thus,  it  was  said  by  the  Supreme 
Court  of  California,  that  a  judgment  which  was  not  sup- 
ported by  the  pleadings  was  as  fatally  defective  as  one 
which  was  not  sustained  by  the  verdict  or  finding.  The 
judgment  must  accord  with  and  be  warranted  by  the  plead- 
ings of  the  party  in  whose  favor  it  is  rendered.*  This  may 
be  true  under  the  liberal  interpretation  of  the  statutes  regu- 
lating the  reformed  procedure,  but  it  is  unwise  for  a  com- 
plainant to  place  strong  reliance  upon  such  a  rule  of  j>rac- 
tice.  On  the  contrary  the  bill  should  shadow  forth  the 
case  which  the  evidence  is  calculated  to  disclose,  or  the 
variance  may  prove  fatal.  Thus,  where  the  bill  impeached 
a  deed,  and  prayed  its  avoidance  upon  allegations  of  actual 
fraud,  there  is  authority  that,  where  the  defendant  is 
brouirht  into  court  to  answer  such  a  charc^e,  and  so  effect- 


•  Buswell  V.  Lincks,  8  Daly  (N.  Y.)         '  Bachman  v.  Sepulveda,  39Cal.6S9; 
518.  Bailey  v.  Ryder,  10  N.  Y.  363. 


262  CONTRADICTORY    VERDICTS.  §    1 83 

ually  repels  it  that  the  court  would  not  be  justified  in  hold- 
ing that  the  averment  was  proved,  the  complainant  is  not 
at  liberty  to  change  his  ground,  and  obtain  other  relief, 
based  upon  proof  of  constructive  fraud,  or  other  equities 
supposed  to  be  established  by  the  evidence.^  And,  where 
a  bill  charges  actual  and  intentional  fraud,  and  the  prayer 
for  relief  proceeds  upon  that  theory,  the  complainant  can- 
not, under  the  prayer  for  general  relief,  rely  upon  circum- 
stances which  make  out  a  case  for  relief  under  a  distinct 
head  of  equity,  although  such  circumstances  substantially 
appear  in  the  bill,  but  are  charged  only  in  aid  of  the  actual 
fraud  alleged.^ 

§  183.  Contradictory  verdicts. — In  Love  v.  Geyer,^  which 
was  an  action  brought  by  a  judgment-creditor  of  the 
grantor,  against  the  grantor  and  grantee,  to  avoid  a  fraud- 
ulent conveyance,  a  general  verdict  was  returned  against 
both  defendants.  A  new  trial  was  awarded  to  the  grantor 
and  denied  to  the  grantee,  and  the  case  was  continued 
without  judgment.  At  a  subsequent  term  the  cause  was 
tried  by  the  court  as  to  the  grantor,  and  a  finding  and  judg- 
ment rendered  in  his  favor.  The  court,  over  the  objection 
of  the  grantee,  rendered  judgment  against  him,  upon  the 
former  verdict  of  the  jury  setting  aside  the  conveyance 
as  fraudulent.  On  review,  the  judgment  was  very  cor- 
rectly held  to  be  erroneous.*  Clearly,  if  no  fraud  had  been 
practiced  by  the  grantor,  it  was  an  absurdity  to  find  that, 
as  to  the  grantee,  the  conveyance  was  fraudulent.  Both 
parties  must  necessarily  be  implicated  in  the  fraud. 


'  Clark  V.  Krause,  2  Mackey  (D.  C.)  missed."     See,  also,  Fisher  v.  Boody,  i 

574.     "  If  a  bill   charges   fraud    as  a  Curt.  C.  C.  206. 

ground  of  relief,  fraud  must  be  proved.  '  Eyre  v.  Potter,  15  How.  42. 

The  proof  of  other  facts,  though  such  '  74  Ind.  12. 

as   would   be    sufficient,    under    some  ■*  See    Romine   v.    Romine,    59  Ind. 

circumstances,  to  constitute  a  claim  for  346  ;  also  Hollingsworth  v.  Crawford, 

relief  under   another   head   of  equity,  60  Ind.  70. 
will  not  prevent  the  bill  from  being  dis- 


§    iS^a  NEW    TRIAL.  263 

§  183^,  New  trial. — The  statutes  granting  statutory  new 
trials  as  matter  of  right  are  not  applicable  to  suits  brought 
to  annul  fraudulent  conveyances.^ 


'  See  Somerville  v.  Donaldson,  26  Perry  v.  Ensley,  10  Ind.  378 ;  Sedg.  & 
Minn.  75  ;  Shumway  v.  Shumway,  i  Wait  on  Trial  of  Title  to  Land,  2d  ed., 
Lans.  (N.  Y.)  474,  affi'd  42  N.  Y.  143  ;     §  595. 


CHAPTER   XII. 


PROVISIONAL    RELIEF INJUNCTION RECEIVER ARREST. 


§  184.  Provisional  relief. 

185.  Injunction,  when  allowed. 

186.  When  injunction  refused. 

187.  Receiver  in  contests  over   real 

property. 


§  188.  Receivers  of  various  interests. 

189.  Title  on  death  of  receiver. 

190.  Removal  and    dismissal   of  re- 

ceiver. 

191.  Arrest  of  defendant. 


§  184.  Provisional  relief. — In  view  of  the  class  of  debtors 
and  alleged  purchasers  with  whom  creditors  are  called  upon 
to  litigate,  it  is  perhaps  needless  to  recall  the  great  import- 
ance of  prompt  and  efficient  provisional  remedies  easily- 
accessible  to  complainants.  The  defendants  may  be  con- 
templating flight,  or  may  be  engaged  in  wasting  or  convert- 
ing the  property  with  a  view  of  thwarting  the  creditors' 
proceedings.  The  relief  afforded  by  final  decree  will  per- 
haps come  too  late  to  be  practically  effectual.  In  some 
instances  an  order  of  arrest  may  be  procured  against  the 
person  of  the  debtor,  or  of  his  co-conspirators  ;  in  others 
an  injunction  may  issue  restraining  any  misuse,  incum- 
brance, or  disposition  of  the  property  claimed  to  have  been 
covinously  alienated ;  while  in  others  a  receiver  may  be  ap- 
pointed to  take  possession  and  care  of  the  property  pend- 
ing the  litigation.^  Indeed,  the  appointment  of  a  receiver 
in  a  creditors'  suit  is  almost  a  matter  of  course.^  A  receiver 
may  even  be  appointed  before  answer  filed  in  an  urgent 
case,^  or  before  judgment, **  but  only  when  it  is  manifest 


»  EUett  V.  Newman,  92  N.  C.  523. 

'  Bloodgood  V.  Clark,  4  Paige  (N. 
Y.)  577  ;  Fitzburgh  v.  Everingham,  6 
Paige  (N.  Y.)  29 ;  Runals  v.  Harding, 


83  111.  75  ;  Shainwald  v.  Lewis,  6  Fed. 
Rep.  776. 

3  Weis  V.  Goetter,  72  Ala.  259 ;  Micou 
V.  Moses,  72  Ala.  439. 

*  Cohen  v.  Meyers,  42  Ga.  46. 


§   185  INJUNCTION.  265 

that  the  fund  is  in  danger  of  being  lost.-^  The  receivership 
will  be  denied  when  it  does  not  distinctly  appear  that  there 
is  any  property  to  be  preserv^ed.^ 

§  185.  Injunction,  when  allowed. — As  has  been  elsewhere 
shown,  the  courts  will  not  ordinarily  interfere  by  injunction 
or  otherwise,  at  the  instance  of  a  contract-creditor,  to  re- 
strain the  debtor's  control  ov^er  his  business,  or  any  disposi- 
tion of  his  property.^  Hyde  v.  Ellery  ^  is  an  exception  to 
the  usual  rule,  additional  to  those  heretofore  noticed.^  It 
appeared  in  that  case  that  the  debtor  had,  by  fraudulent 
means,  purchased  a  large  quantity  of  goods  from  various 
merchants,  upon  credit,  and  had  sold  the  goods  at  auction 
so  that  it  was  practically  impossible  to  trace  them.  An 
injunction  was  allowed  in  favor  of  simple  contract-creditors, 
upon  the  theory  that  its  issuance  would  prevent  a  multi- 
plicity of  suits,  and  furthermore,  because,  as  the  relief  sought 
was  to  set  aside  a  transaction  entered  into  with  the  inten- 
tion to  defraud  creditors,  an  injunction  was  necessary  as 
ancillary  to  that  relief.  In  another  case  which  arose  in 
Pennsylvania  it  was  decided  that  a  fraudulent  severance  of 
fixtures,  made  with  a  design  to  defeat  the  lien  of  a  judg- 
ment, could  be  restrained  in  equity.'^ 

In  suits  to  annul  fraudulent  transfers,  relief  by  injunction 
is  often  indispensable.  Thus,  where  the  petition  alleged 
that  an  action  was  pending  by  plaintiff  against  one  of  the 
defendants,  in  which  certain  real  estate,  which  had  previ- 
ously been  fraudulently  conveyed  to  another  defendant,  was 
attached,  and  the  defendants  were  about  to  dispose  of  such 
real  estate  for  the  purpose  of  defeating  plaintiff's  claim,  it 
was  decided  that  a  temporary  injunction  restraining  such 


'  Rheinstein  v.  Bixby,  92  N.  C.  307.  665  ;  Johnson  v.  Farnuni,  56  Ga.  144; 

'First  National   Bank  v.  Gage,  79  Adee  v.  Bigler,  81  N.  Y.  349;  May  v. 

111.  207.  Greenhill,  80  Ind.  124.     See  §  52. 

^  Uhl  V.   Dillon,   10  Md.   500;   Mc-  *  18  Md.  501. 

Goldrick  v.  Slevin,  43  Ind.  522;  Dodge  '■'  See  §  53. 

V.  Pyrolusite  Manganese  Co.,  69  Ga.  •  Witmer's  Appeal,  45  Pa.  St.  455. 


266  WHEN    INJUNCTION    REFUSED.  ^    1 86 

sale  was  properly  continued  to  the  final  hearing,  notwith- 
standing the  filing  of  an  answer  denying  all  fraudulent  in- 
tent.^ In  a  case  in  which  the  bill  charged  that  the  defend- 
ant, who  was  a  trustee  under  an  assignment  for  creditors, 
was  a  notoriously  bad  character,  and  had  refused  to  allow 
an  inventory  of  the  assigned  property  to  be  made,  and 
hence,  if  loss  resulted,  the  creditors  would  be  unable  to 
show  the  extent  of  it.  the  court  held  that  it  was  justified  in 
granting  an  injunction  and  appointing  a  receiver  without 
notice.^  And  where  a  suit  was  brought  by  creditors  of  a 
deceased  debtor  to  reach  property  fraudulently  alienated  by 
him  in  his  lifetime,  it  was  decided  that  pending  the  suit  the 
court  properly  enjoined  the  defendant  from  incumbering  or 
conveying  the  land.^  So  an  injunction  may  issue  to  stay 
waste.'*  It  may  be  observed  that  a  denial  in  the  defendant's 
answer  that  he  has  any  property  does  not  constitute  a  cause 
for  dissolving  an  injunction  restraining  him  from  assigning 
or  disposing  of  his  property.^ 

§  i86.  When  injunction  refused. — An  injunction  will  not 
be  issued  unless  facts  are  shown  from  which  its  issuance 
appears  to  be  a  necessity  in  order  to  save  the  creditor's 
rights,  and  to  prevent  the  wasting  of  the  subject-matter  of 
which  he  is  in  pursuit.  Thus,  in  Portland  Building  Asso- 
ciation V.  Creamer,^  it  appeared  that  a  creditor's  bill  was 
filed  to  set  aside  as  fraudulent  a  conveyance  of  lands  about 
one-half  of  which  was  woodland.  The  court  held  that  an 
injunction  which  restrained  the  grantee  from  cutting  and 
removing  the  timber  from  the  premises  would  not  be  con- 
tinued, it  being  shown  that  the  value  of  the  land,  without 
the  timber,  was  ample  to  satisfy  the  creditor's  claim  in  case 
the  conveyance  should  ultimately  be  annulled. 


'  Joseph  V.  McGill,  52  Iowa  127.  •*  Tessier   v.   Wyse,   3   Bland's   Ch. 

'  Rosenberg  v.  Moore,  1 1  Md.  376.  (Md.)  29. 

See  Blondheim  v.  Moore,  1 1  Md.  365.  *  New  v.  Bame,  10  Paige  (N.  Y.)  502. 

'  Appeal  of  Fowler,  87  Pa.  St.  449.  «  34  N.  J.  Eq.  107. 


§  187        CONTESTS  OVER  REAL  PROPERTY.  267 

§  187.  Receiver  in  contests  over  real  property. — Where  real 
property  is  fraudulently  transferred,  the  court,  as  we  have 
seen,  may  adjudge  and  direct  a  transfer  to  a  receiver/ 
Vause  V.  Woods  ^  is  an  illustration  of  the  disinclination  of 
the  court  to  interfere  by  the  appointment  of  a  receiver  of 
real  property,  where  the  party  in  possession  has  what  pur- 
ports to  be  the  legal  title.  The  case  came  up  on  appeal 
from  an  order  appointing  a  receiver  upon  a  creditor's  bill 
to  take  possession  of  the  property  alleged  to  have  been  con- 
veyed in  fraud  of  the  plaintiff.  Simrall,  J.,  said  (p.  128)  : 
"  As  against  the  legal  title,  the  interposition  is  with  reluc- 
tance ;  it  will  only  be  done  in  case  of  fraud  clearly  proved, 
and  danger  to  the  property."^  Provisional  relief  is  not  en- 
couraged in  land  cases  because  the  subject-matter  of  con- 
tention is  immovable,  practically  indestructible,  and  unlike 
personalty  cannot  be  spirited  away.**  In  New  York  a  re- 
ceiver will  not  be  appointed  in  ejectment  before  judgment.^ 
This  practice  has  been  a  subject  of  criticism.^  The  rule  is 
otherwise  in  an  equitable  action  to  annul  a  conveyance  of 
real  property,  even  though  it  is  conceded  that  ejectment 
could  have  been  brought  in  the  place  of  the  equitable  ac- 
tion ;'  but  even  in  such  cases  the  relief  is  not  easily  se- 
cured.^ 

'  Cole  V.  Tyler,  65  N.  Y.  Tj ;   Mc-  ■•  Sedg.   &  Wait   on  Trial  of  Title. 

Caffrey  v.  Hickey,  66  Barb.  (N.  Y.)  489,  §631. 

492  ;  Chautauque  County  Bank  v.  Ris-  *  Guernsey   v.    Powers,  9    Hun  (N. 

ley,    19  N.  Y.  369;    White's  Bank  of  Y.)  78 ;  Burdell  v.  Burdcll,  54  How.  Pr. 

Buffalo  V.  Farthing,  9  Civ.  Pro.  (N.  Y.)  (N.  Y.)  91  ;  Thompson  v.  Sherrard,  35 

66;  S.  C.  loi  N.  Y.  344.     See  §  170.  Barb.  (N.  Y.)  593;  Sedg.  &  Wait  on 

*  46  Miss.  120.  Trial  of  Title  (2d  ed.),  §  61 5. 

*  Compare  Lloyd  v.  Passingham,  16  *  Sedg.  &  Wait  on  Trial  of  Title  (2d 
Ves.   Jr.   68 ;    Mays  v.    Rose,    Freem.  ed.),  §  632. 

Ch.  (Miss.)  718  ;  Jones  v.  Pugh,  8  Ves.  '  Mitchell  v.  Barnes,  22  Hun  (N.  Y.) 

71;  Walker  v.  Denne,  2  Ves,  Jr.  170;  194.     See  the    dissenting    opinion    of 

Mapes   V.    Scott,   4  Brad.    (111.)    268;  Learned,  P.  J.,  in  this  case.     The  suit 

Sedg.  &  Wait  on  Trial  of  Title  to  Land,  was  instituted  to  annul  a  deed  upon  the 

Chapter  XXIli.;   Rheinstein  v.  Bi.xby,  -   

92   N.   C.   307;    Beach  on  Receivers,  '  McCool  v.  McNamara,  19  Abb.  N. 

§67.  C  (N.  Y.)344- 


268  TITLE    ON    DEATH    OF    RECEIVER.         §§  l88,   1 89 

§  188.  Receivers  of  various  interests. — On  supplementary 
proceedings  under  the  Wisconsin  Code  to  enforce  a  decree 
for  alimony,  the  court  may  appoint  a  receiver  to  take  pos- 
session of  the  effects  of  the  defendant  in  the  divorce  pro- 
ceedings ;  the  sheriff's  return  of  the  execution  is  sufficient 
ground  therefor,  and  the  receiver  thus  appointed  may  at- 
tack a  fraudulent  conveyance  of  the  debtor's  real  estate 
made  with  intent  to  defeat  the  decree  for  alimony.^  A  re- 
ceiver has  been  appointed  of  crops  growing  on  a  planta- 
tion ;  ^  and  in  a  case  where  an  annuity,  which  was  charged 
upon  real  property,  was  in  arrear,^  and  also  of  a  living.^ 

§  189.  Title  on  death  of  receiver. — Where  a  receiver  of 
a  debtor's  property  has  been  appointed,  and  the  debtor  has 
executed  the  usual  assignment  of  the  property  to  him,  upon 
the  death  of  the  receiver  the  title  to  the  property  vests  in 
the  court.  The  receiver's  possession  is  the  court's  posses- 
sion, and  he  is  merely  its  agent  or  representative.  The 
functions  of  the  receiver  continue  after  the  death  of  the 
appointee,  and  it  is  competent  for  the  court  to  appoint  a 
successor  to  conduct  and  complete  the  litigation,  and  in 
other  respects  fulfil  the  duties  which  the  first  receiver  left 
incomplete.^     Nor  is  it  necessary  that  the  defendants  in  the 


ground   that   the  grantor  was  insane,  372 ;    Hyman    v.    Kelly,    i    Nev.    179. 

and  the  conveyance  was  procured  by  Sea  Ins.  Co.  v.  Stebbins,  8  Paige  (N. 

improper  influences.     The  same  relief  Y.)  565  ;  Cheever  v.  Rutland  &  B.  R. 

could  have  been  procured  in  ejectment.  R.  Co.,  39  Vt.  654 ;  Brown  v.  Chase, 

Van  Deusen  v.  Sweet,  51   N.  Y.  378.  Walker's   Ch.    (Mich.)    43;    Finch    v. 

Hence,  as  a  receiver  could  not  be  had  Houghton,  19  Wis.  150;   Callanan  v. 

in  ejectment  it  was  argued,  in  this  dis-  Shaw,   19  Iowa  183.     And  a  receiver 

senting  opinion,  that,  by  analogy,  none  may  be  had  in  an  action  to  foreclose  a 

should   be   appointed   in   the    suit    in  contract  for  the  sale  of  land.     Smith  v. 

equity.     The  majority  of  the  court  de-  Kelley,  31  Hun  (N.  Y.)  387. 

clined  to  adopt  this  view.     A  receiver  '  Barker  v.  Dayton,  29  Wis.  367. 

is  frequently  appointed  in  suits  to  fore-  -  Micou  v.  Moses,  72  Ala.  439. 

close  mortgages,  when  it  appears  that  '  Sankey  v.  O'Maley,  2  Moll.  491. 

the  security  is  insufficient  and  the  mort-  •*  Hawkins   v.    Gathercole.   31    Eng. 

gagor  is  insolvent.     See  Haas  v.  Chi-  L.   &  Eq.  305  ;  Beach  on   Receivers, 

cago  Building  Society,   i  Am.  Insolv.  §  619. 

Rep.  201  ;    Myers  v.  Estell,  48  Miss.  '  Nicoll  v.  Boyd,  90  N.  Y.  519. 


§    190  REMOVAL    OF    RECEIVER.  269 

suits  should  be  given  notice  of  proceedings  for  the  appoint- 
ment of  a  successor  to  the  first  receiver,^ 

§  190.  Removal  and  dismissal  of  receiver. — "The  juris- 
diction of  a  court  of  equity,"  says  Mr.  Iligh,^  "  which  is 
exercised  in  the  removal  of  receivers,  bears  a  striking  re- 
semblance to  that  which  is  called  into  action  upon  the  dis- 
solution of  an  interlocutory  injunction,  and  in  both  cases 
the  power  to  terminate  seems  to  flow  naturally  and  as  a 
necessary  sequence  from  the  power  to  create.  And  as  an 
interlocutory  injunction  is  usually  dissolved  upon  the  com- 
ing in  of  defendant's  answer,  denying  under  oath  the  allega- 
tions of  the  bill,^  so  in  the  case  of  a  receivership,  if  the 
answer  under  oath  fully  and  satisfactorily  denies  the  equities 
of  the  bill,  or  the  material  allegations  upon  which  the  ap- 
pointment was  made,  and  these  allegations  are  not  sustained 
by  any  testimony  in  the  case,  the  order  of  appointment 
will  be  reversed  and  the  receiver  removed."*  It  is  said  that 
the  high  prerogative  act  of  taking  property  out  of  the  hands 
of  a  party  and  putting  it  in  pound  ought  not  to  be  exercised 
except  to  prevent  manifest  wrong  imminently  impending. 
And  when  the  court,  upon  the  coming  in  of  the  answer, 
discovers  that  the  danger  is  not  imminent,  and  that  there 
is  no  pressing  necessity  for  the  order,  it  may  be  revoked  or 
modified  on  such  terms  as  the  court  thinks  wise.^  We  may 
here  state  that  it  is  not  a  sufficient  cause  for  removing  a  re- 
ceiver of  a  judgment-debtor  that  he  has  employed  the  debtor 
as  an  agent  to  assist  in  collecting  the  assets,  the  receiver 


'  NicoU  V.  Boyd,  90  N.  Y.  519.     See  Butler,  18  N.  J.  Eq.  220;  Parkinson  v. 

also  Atty.-Genl.  v.  Day,  2  Madd.  246.  Trousdale,  4  III.  367 ;  Roberts  v.  An- 

•^  High  on  Receivers,  §  826.  derson,    2   Johns.    Ch.    (N.    Y.)    202  ; 

»  Citing  Hollister  v.  Barkley,  9  N.  H.  Harris   v.    Sangston,  4  Md.  Ch.  Dec. 

230;   Armstrong  V.  Sanford,  7  Minn.  394  ;  Kaighn  v.P^uUer,  14N.  J.  Eq  419  ; 

49;  Anderson  v.  Reed,  11   Iowa  177;  Schoefflcr  v.  Schwarting.  17  Wis.  30. 

Stevens  v.  Myers,  11   Iowa  183;  Tay-  ^  Citing  Voshcll  v.  Hynson,  26  Md. 

lor  V.  Dickinson,  15  Iowa  483  ;  Hatch  83:  Drury  v.  Roberts,  2  Md.  Ch.  Dec. 

V.   Daniels,  5  N.  J.  Eq.  14;  Washer  v.  157. 

Brown,    5    N.   J.    Eq.   81  ;    Suffern  v.  '  Crawford  v.  Ross,  39  C^.a.  49. 


270  ARREST    OF    DEFENDANT.  §    ^9^ 

being  solvent  and  the  trust  otherwise  properly  executed.^ 
In  many  cases  the  debtor's  knowledge  of  the  business  pecu- 
liarly qualifies  him  to  render  valuable  services  to  the  receiver. 
And  the  receiver  should  be  served  with  notice  and  a  specifi- 
cation of  the  grounds  upon  which  the  removal  is  sought.^ 
It  may  also  be  observed  that  where  the  order  appointing  a 
receiver  was  fraudulently  procured,  and  was  subsequently 
annulled,  the  receiver  will  be  required  to  account  for  the 
fund  intact,  and  will  not  be  allowed  any  deductions.^ 

§  191.  Arrest  of  defendant. — In  New  York,  to  authorize 
the  arrest  of  a  defendant  in  an  action  for  alleged  fraud- 
ulent disposition  of  his  property,  actual  intent  to  defraud 
must  be  clearly  established.^  Proof  must  be  adduced  of  an 
actual  and  guilty  intent  to  defraud  creditors.  A  mere  con- 
structive fraud  such  as  the  law  implies  because  an  act  is 
done  in  violation  of  the  statute  or  of  the  rights  of  the 
creditors  at  common  law,  is  not  sufficient.^  Hence  an 
order  of  arrest  against  a  partner  who,  with  knowledge  of 
the  insolvency  of  the  firm,  paid  individual  debts  with  firm 
assets,  was  vacated. "^  Where  there  is  no  evidence  of  guilty 
knowledge,  the  debtor  should  not  be  subjected  to  arrest 
for  acts  of  constructive  fraud.'''  The  lex  foi-i,  as  we  have 
seen,^  gov^erns  in  cases  involving  the  question  of  the  right 
of  arrest. 

'  Ross  V.  Bridge,  24  How.  Pr.   (N.  Harwood,  30  Hun  (N.  Y.)  11.     Com- 

Y.)  163.  pare  Neal  v.  Clark,  95  U.  S.  704. 

-  Bruns  v.  Stewart  Mfg.  Co.,  31  Hun        *  Compare  Wilson  v.  Robertson,  21 

(N.  Y.)  197.  N.  Y.  587  ;  Menagh  v.  Whitwell,  52  N. 

^  O'Mahoney  v.  Belmont,  37  N.  Y.  Y.  146. 
Super.  Ct.  224.  '  Sherill   Roper  Air   Engine  Co.  v. 

^  Hoyt  V.  Godfrey,  88  N.  Y.  669.  Harwood,  30  Hun   (N.   Y.)   11.     See 

*  Sherill   Roper  Air  Engine  Co.  v.  People  v.  Kelly,  35  Barb.  (N.  Y.)  444. 

'  See  §  64. 


CHAPTER   XIII. 

REIMBURSEMENT    AND    SUBROGATION. 

§  194.  Void  in  part  void  in  toto. 


§  192.  Actual  and  constructive  fraud — 
Security  or  reimbursement  of 
purchaser. 
193.  No  reimbursement  at  law. 


195.  Subrogation    of    purchaser    to 
creditors'  lien. 


"  The  law  cares  very  little  what  a  fraudulent  party's  loss  may  be,  and  exacts  nothing  for  his 
sake." — Andrews,  J.,  in  Guckenheimer  v.  Angevine,  81  N.  Y.  397. 

§  192.  Actual  and  constructive  fraud — Security  or  reimburse- 
ment of  purchaser. — There  is  a  plain  and  highly  important 
distinction  to  be  found  in  the  authorities  between  actual 
and  constructive  fraud  as  affecting  the  question  of  repay- 
ment of  the  money  actually  advanced  by  a  purchaser.  If 
the  transaction  is  fraudulent  in  fact  it  cannot  stand  even 
for  the  purpose  of  reimbursement  or  indemnity  ;^  while  if 
it  is  only  constructively  fraudulent,^  it  may  be  upheld  in 
favor  of  the  vendee  to  the  extent  of  securing  restitution  of 
the  amount  of  the  actual  consideration  given  or  paid  by 
him,  and  only  the  excess  of  the  property  will  be  subjected 
to  the  creditor's  debt.^  When  the  grantee  purchases  with- 
out actual  notice  of  the  fraud,  but  for  a  consideration  which 
is  so  inadequate  that  it  would  be  inequitable  to  allow  the 
deed  to  stand  as  a  conveyance,  a  court  of  equity  may,  upon 
appropriate  allegations  and  proof,  give  it  effect  as  a  security 
for  the  consideration  actually  paid.*     And  in  cases  of  mere 

'  Millington   v.    Hill,  47  Ark.    311;  'Wood   v.  Goff's  Curator,  7  Bush 

Davis  V.  Leopold,  87  N.  Y.  620 ;  Shep-  (Ky.)   63  ;    Short   v.    Tinsley.    i    Met. 

herd  v.  W^oodfolk,  10  B.  J.  Lea  (Tenn.)  (Ky.)  398  ;  Crawford  v.  Beard,  12  Ore. 

598;  Alley  V.  Connell,  3  Head  (Tenn.)  458  ;  Lobstein  v.  Lehn,  120  111.  555. 

582.  '  Van  Wyck  v.  Baker,  16  Hun  (N. 

«  Lobstein  v.  Lehn,  20  Bradw.  (III.)  Y.)   171.     See  Clements   v.   Moore,   6 

261.  Wall.  312;  McArthur  v.  Hoysradt,  ll 


272 


ACTUAL  AND  CONSTRUCTIVE  FRAUD.       §  1 9; 


suspicious  circumstances  as  to  the  adequacy  of  the  consid- 
eration and  fairness  of  the  transaction  the  court  will  not 
entirely  annul  the  conveyance,  but  on  the  contrary  will  so 
frame  its  judgment  as  to  protect  the  purchaser  to  the 
amount  of  the  money  advanced.^  Again,  where  strangers 
to  the  fraud  paid  off  valid  incumbrances  upon  the  property, 
they  are  held  entitled  to  be  reimbursed,  and  to  be  provided 
for  in  the  decree,  before  the  complainant's  claim  is  satisfied.^ 
The  rule  is  laid  down  by  Chancellor  Kent  in  the  great 
and  leading  case  of  Boyd  v.  Dunlap,'^  that  a  deed,  fraudu- 
lent in  fact,  will  be  declared  absolutely  void,  and  not  per- 
mitted to  stand  as  a  security  for  any  reimbursement  or  in- 
demnity, and  this  principle  is  upheld  and  followed  in  many 
cases.^  Thus  in  Shand  v.  Hanley,^  the  vendee  was  not 
allowed  to  absorb  the  value  of  the  premises  in  a  claim  for 
improvements  made  after  constructive  notice  to  her  of  the 
insecurity  of  her  title,  and  of  the  equitable  lien  of  the  cred- 
itor. In  Briggs  v.  Merrill,^  Johnson,  J.,  said  :  A  party  bar- 
ofaininof  with  a  debtor  with  fraudulent  intent,  "  does  it  at 
the  peril  of  having  that  which  he  receives  taken  from  him 


Paige  (N.  Y.)  495.     In  Colgan  v.  Jones,  was  allowed  to  recover  for  improve- 

44  N.  J.  Eq.  274,  it  appeared  that  a  ments  made  in  good  faith  where  a  deed 

debtor  who  had  sustained  personal  in-  to  her  was  set  aside  as  being  in  effect 

juries  assigned  his  claim  for  $330  to  voluntary.     See  Rucker  v.  Abell,  8  B. 

his  attorney,  who  recovered  thereon  a  Mon.   (Ky.)  566;  King  v.  Wilcox,  11 

judgment  of  $4,000.     It  was  decided  Paige  (N.  Y.)  589. 

that  the  assignment  as  to  the  excess  -  Swan  v.  Smith,  57  Miss.  548.     See 

beyond  a  reasonable  compensation  to  Young  v.  Ward,  115  111.  264. 

the  attorney  for  his  services  was  void-  ^  j  Johns.  Ch.  (N.  Y.)  478, 

able   as   to    the    debtor's    antecedent  *  See  Davis  v.  Leopold,  Sj  N.  Y.  620  ; 

creditors.  Union  Nat.  Bank  v.  Warner,  12  Hun 

'  United  States  v.  Griswold,  8  Fed.  (N.  Y.)  306  ;  Wood  v.  Hunt,  38  Barb. 

Rep.    504,   citing   Boyd   v.   Dunlap,    i  (N.  Y.)  302  ;  Briggs  v.  Merrill,  58  Barb. 

Johns.  Ch.  (N.  Y.)  478 ;    Crockett  v.  (N.  Y.)  389 ;  Alley  v.  Connell,  3  Head 

Phinney,  33  Minn.  157.     See  Taylor  v.  (Tenn.)    582;   Shepherd   v.  Woodfolk, 

Atwood,  47  Conn.  508  ;  Oliver  V.  Moore,  10  B.  J.  Lea  (Tenn.)  598;  Millington 

26  Ohio  St.  298;  First  Nat.  Bank  v.  v.  Hill,  47  Ark.  311, 

Bertschy,  52  Wis.  443;  May  on  Fraud-  =  71  N.  Y.  323. 

ulent  Conveyances,  p.  235.     In  Borden  •*  58  Barb.  (N.  Y.)  389. 
V.  Doughty,  42  N.  J.  Eq.  314,  a  wife 


§  192       ACTUAL  AND  CONSTRUCTIVE  FRAUD. 


^/O 


by  the  creditors  of  the  debtor  whom  he  is  attempting  to 
defraud,  without  having  any  remedy  to  recover  what  he 
parts  with  in  carrying  out  the  bargain."  The  learned  judge 
adds  :  "  The  law  will  leave  him  in  the  snare  his  own  devices 
have  laid."  The  court,  in  Stovall  v.  Farmers'  and  Mer- 
chants' Bank,*  said  that  there  was  no  rule  which  gave  a  lien 
under  a  fraudulent  contract.  Every  person  who  enters  into 
a  fraudulent  scheme  forfeits  all  right  to  protection  at  law 
or  in  equity.  The  law  does  not  so  far  countenance  fraud- 
ulent contracts  as  to  protect  the  perpetrator  to  the  extent 
of  his  investment.  This  would  be  holding  out  inducements 
to  engage  in  schemes  of  fraud,  as  nothing  could  be  lost  by 
a  failure  to  effectuate  the  entire  plan.  Judge  Spencer  said 
he  presumed  there  was  "  no  instance  to  be  met  with  of  any 
reimbursement  or  indemnity  afforded  by  a  court  of  chan- 
cery to  a  particeps  a'iminis  in  a  case  of  positive  fraud."  ^ 
And  Judge  Story  remarked,  in  Bean  v.  vSmith  :^  "  I  agree 
to  the  doctrine  laid  down  by  Chancellor  Kent  in  Boyd  v. 
Dunlap"*  and  Sands  v.  Codwise,^  that  a  deed  fraudulent  in 
fact  is  absolutely  void,  and  is  not  permitted  to  stand  as  a 
security  for  any  purpose  of  reimbursement  or  indemnity  ; 
but  it  is  otherwise  with  a  deed  obtained  under  suspicious  or 
inequitable  circumstances,  or  which  is  only  constructively 
fraudulent."^  "  The  loss  of  the  amount  paid  by  a  fraudu- 
lent grantee  is  the  penalty  that  the  law  indicts  for  the 
fraudulent  transaction.  To  refund  to  such  a  grantee  the 
amount  he  has  paid  would  be  to  destroy  the  penalty."' 

It  may  be  here  observed  that  there  seems  to  be  author- 
ity for  the  proposition  that  loss  resulting  from  depreciation 
may  be  apportioned  between  the  debtor  and  tlie  grantee, 


1  16  Miss.  316.  *  4  Johns.  (N.  Y.)  549. 

"  Sands  v.  Codwise,  4  Johns.  (N.  Y.)  "  See  Henderson  v.  Hunton,  26Gratt. 

598.    Compare  note  to  Lore  v.  Dierkes,  (Va.;  935  ;  Coiron  v.  Millaudon.igHow. 

16  Abb.  N.  C.  (N.  Y.)  47.  115. 

^  2  Mason  296,  '  See  Seivers  v.  Dickover,   loi  Ind. 

*  I  Johns.  Ch.  (N.  Y.)  47S.  495.  498- 
18 


274  ACTUAL    AND    CONSTRUCTIVE    FRAUD.  5   ^92 

according  to  the  sums  respectively  invested,^  when  the  con- 
veyance  is  attacked    by  creditors.      Thus  in    Shaeffer  v. 
Fithian,^  an  insolvent  purchased  real  estate  for  his  wife, 
taking  the  title  in  her  name,  and  advancing  $2,460  of  the 
consideration,  the  wife  paying  the  balance  of  $4,000.     The 
court  ordered  a  sale   of  the   property,  and  directed  that 
twenty-four-hundred-and-sixty    sixty-four-hundred-and-six- 
tieths  of  the  proceeds  of  sale  be  applied  in  payment  of  the 
complainant's  debt.     The  court,  after  observing  that  they 
could  see  no  error  in  this  decree  to  the  prejudice  of  the 
wife,  said  :  "  She  might  well  have  been  regarded  as  the  sole 
owner  of  the  property,  and  the  quasi  debtor  of  her  husband. 
As  such,  she  would  be  bound  to  bear  the  whole  loss  arising 
from  depreciation  of  the  property.    The  court  below  seems, 
however,  to   have  considered  the  husband's  interest  as  a 
kind  of  resulting  trust  in  the  property,  making  him   in 
equity  a  tenant  in  common.     This  was  certainly  the  most 
favorable  view  in  behalf  of  the  wife  that  could  have  been 
taken  of  the  case.     It  results  in  saddling  the  loss  arising 
from  depreciation  pro  rata  upon  both  parties."     The  Su- 
preme Court  of  Missouri  say,  in  Allen  v.  Berry, ^  that  there 
is  no  principle  of  equity  which  allows  a  fraudulent  grantee 
to  offset  against  the  value  of  the  property  the  amount  he 
may  have  paid  for  it.     "  The  fraud,"  observes  Adams,  J., 
"  renders  the  deeds  absolutely  void  as  to  creditors,  and  the 
plaintiff,  who  was  a  creditor,  and  as  such  became  the  pur- 
chaser, is  entitled  to  recover  the  property  and  its  rents,  etc., 
as  thouo:h  no  such  fraudulent  deeds  ever  had  been  made." 
Allowing  the  vendee  to  recover  back  the  money  would  be 
in  effect  repaying  him  the  amount  which  he  expended  in 
accomplishing  the  very  thing  which  the  law  prohibits  and 
condemns.     As  it  was  a  wrong  in  him  to  obtain  the  title 
and  the  possession  for  a  fraudulent  purpose,  it   must  be 
equally  wrong  to  refund  to  him  the  price  paid  for  it.* 

'  Shaeffer  v.  Fithian,  26  Ohio  St.  282.        ^  50  Mo.  91. 

2  26  Ohio  St.  282.  *  McLean  v.  Letchford,  60  Miss.  i8j. 


§  193 


NO    REIMBURSEMENT    AT    LAW. 


275 


§  193.  No  reimbursement  at  law. — While  a  court  of  equity, 
in  setting  aside  a  deed  of  a  purchaser  upon  grounds  other 
than  those  of  positive  fraud,  annuls  it  upon  terms,  and  re- 
quires a  return  of  the  purchase-money,  or  directs  that  the 
conveyance  stand  as  a  security  for  its  repayment,  this  prin- 
ciple has  no  place  as  applied  to  an  action  at  law.  This 
constitutes  one  of  the  essential  differences  already  dis- 
cussed^ between  relief  in  equity  and  the  judgment  ex- 
tended by  a  court  of  law.  The  latter  court,  as  we  have 
said,  can  hold  no  middle  course.  The  entire  claim  of  each 
party  must  rest  and  be  determined  at  law  upon  the  single 
point  as  to  the  validity  of  the  deed  ;  but  it  is  the  ordinary 
case  in  the  former  court  to  decree  that  a  deed  not  abso- 
lutely void,  yet,  under  the  circumstances,  inequitable  as 
between  the  parties,  may  be  set  aside  upon  terms.^ 


'  See  Chapter  III.,  §§  51,  60;  Foster 
V.  Foster,  56  Vt.  540. 

°  Coiron  v.  Millaudon,  19  How.  115. 
See  Clark  v.  Krause,  2  Mackey  (D.  C.) 
574 ;  Drury  v.  Cross,  7  Wall.  299 ; 
Worthington  v.  Bullitt,  6  Md.  172. 

Flexible  jurisdiction  of  equity. — In 
Clements  v.  Moore,  6  Wall.  312,  a  case 
which  we  have  frequently  quoted  and 
cited,  the  court  said  :  "  A  sale  may  be 
void  for  bad  faith,  though  the  buyer 
pays  the  full  value  of  the  property 
bought.  This  is  the  consequence, 
where  his  purpose  is  to  aid  the  seller 
in  perpetrating  a  fraud  upon  his  cred- 
itors, and  where  he  buys  recklessly, 
with  guilty  knowledge.  When  the  fact 
of  fraud  is  established  in  a  suit  at  law, 
the  buyer  loses  the  property  without 
reference  to  the  amount  or  application 
of  what  he  has  paid,  and  he  can  have 
no  relief  either  at  law  or  in  equity. 
When  the  proceeding  is  in  chancery, 
the  jurisdiction  exercised  is  more  flex- 
ible and  tolerant.  The  equity  ai)pea!ed 
to,  while  it  scans  the  transaction  with 
the  severest  scrutiny,  looks  at  all  the 
facts,  and  giving  to  each  one  its  due 


weight,  deals  with  the  subject  before  it 
according  to  its  own  ideas  of  right  and 
justice.  In  some  instances,  it  visits 
the  buyer  with  the  same  consequences 
which  would  have  followed  in  an  ac- 
tion at  law.  In  others,  it  allows  a  se- 
curity to  stand  for  the  amount  advanced 
upon  it.  In  others,  it  compels  the  buyer 
to  account  only  for  the  difference  be- 
tween the  under  price  which  he  paid 
and  the  value  of  the  property.  In 
others,  although  he  may  have  paid  the 
full  value,  and  the  property  may  have 
passed  beyond  the  reach  of  the  process 
of  the  court,  it  regards  him  as  a  trustee, 
and  charges  him  accordingly.  Where 
he  has  honestly  applied  the  property  to 
the  liabilities  of  the  seller,  it  may  hold 
him  excused  from  further  responsibility. 
The  cardinal  principle  in  all  such 
cases  is,  that  the  property  of  th(  debtor 
shall  not  be  diverted  from  the  payment 
of  his  debts  to  the  injury  of  his  credit- 
ors, by  means  of  the  fraud."  See 
Tompkins  v.  Sprout,  55  Cal.  36.  A 
grantee  may  be  allowed  for  itnj)rove- 
ments.  King  v.  Wilcox,  1 1  Paige  (N. 
Y.)    589;    see   Shand    v.    Hanley,  71 


276  VOID    IN    PART    VOID    IN    TOTO.  §§  1 94,  1 95 

§  194.  Void  in  part  void  in  toto. — We  shall  see  presently, 
that,  as  a  general  rule,  a  transaction  void  in  part  for  any 
cause  is  entirely  void.^  Russell  v.  Winne~  is  an  illustra- 
tion of  our  meaning.  In  that  case  the  question  presented 
was  whether  a  mortgage  which  was  fraudulent  against 
creditors  as  to  a  part  of  the  property  mortgaged,  could  be 
upheld  as  to  the  residue.  The  court  decided  that  as  the 
mortgage  was  a  single  instrument,  given  to  secure  one 
debt,  to  render  it  valid  it  must  have  been  given  in  good 
faith,  for  the  honest  purpose  of  securing  the  debt,  and 
without  any  intent  to  hinder  or  defraud  creditors.  Grover, 
J.,  continuing,  said  :  "  This  cannot  be  true  when  the  ob- 
ject, in  part,  or  as  to  part  of  the  property,  is  to  defraud 
creditors.  This  unlawful  design  vitiates  the  entire  instru- 
ment. The  unlawful  design  of  the  parties  cannot  be  con- 
fined to  one  particular  parcel  of  the  property.  Entire 
honesty  and  good  faith  is  necessary  to  render  it  valid  ;  and 
whenever  it  indisputably  appears  that  one  object  was  to 
defraud  creditors  to  any  extent,  the  entire  instrument  is,  in 
judgment  of  law,  void." 

§  195.  Subrogation  of  purchaser  to  creditors'  lien. — The 
doctrine  of  su-brogation  is  founded  upon  principles  of 
equity  and  benevolence,  and  it  may  be  decreed  where  no 
contract  or  privity  of  any  kind  exists  between  the  parties.^ 
In  Lidderdale  v.  Robinson,^  Chief-Justice  Marshall  said : 
"  Where  a  person  has  paid  money  for  which  others  v/ere 
responsible,  the  equitable  claim  which  such  payment  gives 
him  on  those  who  were  so  responsible,  shall  be  clothed 
with  the  legal  garb  with  which  the  contract  he  has  dis- 
charged was  invested,  and  he  shall  be  substituted,  to  every 


N.  Y.  319,  and  the  amount  of  incum-  mins,    39    N.   J.   Eq.    577.      Compare 

brances  satisfied  by  the  vendee  may  be  Murphy  v.  Briggs,  89  N.  Y.  446. 
allowed.     Potter  v.  Gracie,  58  Ala.  303.         '  See  infra.  Void  and  Voidable  Acts. 
So  when  a  conveyance  is  annulled  a        "^  37  N.  Y.  591,  596. 
mortgage  in  favor  of  a  trust  may  be         '  Cottrell's  Appeal,  23  Pa.  St.  294. 
validated.     First  Nat.  Bank  v.  Cum-        ■*  2  Brock.  168. 


§  195  SUBROGATION  OF  PURCHASER.  2/7 

equitable  intent  and  purpose,  in  the  place  of  the  creditor 
whose  claim  he  has  discharged."  It  may  be  noted  that  the 
party  seeking  subrogation  must  come  into  court  with  clean 
hands.^  This  doctrine  of  subrogation  is  frequently  in- 
voked in  cases  where  fraudulent  conveyances  are  annulled. 
Thus,  in  Selleck  v.  Phelps,'-^  it  was  said  that  a  person  who 
acquired  the  title  to  property  under  circumstances  which 
enabled  the  creditors  of  the  vendor  to  avoid  the  sale, 
whether  he  be  a  purchaser  or  a  voluntary  grantee,  would, 
after  the  payment  of  the  claims  of  attaching  creditors,  be 
subrogated  to  their  rights  so  as  to  enable  him  to  hold  the 
property  against  subsequent  attachments.^  Where  goods 
were  fraudulently  conveyed  but  promptly  seized  by  the 
creditors  and  sold  by  them,  it  was  held  that  the  fraudulent 
vendee  should  not  be  charged  a  greater  sum  than  was  real- 
ized upon  the  sale,  and  that  he  was  entitled  to  a  lien  upon 
the  proceeds  of  sale  for  the  amount  of  a  bona  fide  debt 
paid  by  the  debtor  out  of  the  price  given  by  the  vendee.* 
The  right  of  subrogation  was  recognized  in  Cole  v.  Mal- 
colm.^ It  appeared  that  one  Crawford  conveyed  real  estate 
to  his  wife  with  intent  to  defraud  creditors.  Subsequently 
his  wife  died  intestate  and  her  heirs  assigned  the  property 
to  the  defendant.  One  of  Crawford's  creditors  then  en- 
tered a  judgment  against  him,  and  subsequently  secured  a 
decree  setting  aside  the  conveyance.  The  defendant  then 
tendered  the  judgment-creditor  the  amount  due  him  and 
demanded  an  assignment  of  the  judgment  against  Craw- 
ford.    The  court  held  that  under  such  circumstances,  uj)()n 


'  Wilkinson  v.  Babbitt,  4  Dill.  207;  ^  See  Sheldon  on  Subrogation,  §40. 

Railroad  Co.  V.  Soutter,  13  Wall.  517;  Compare  Acker  v.  White,   25    Wend. 

Griffith  V.  Townley,  69  Mo.  13.     The  (N.  Y.)  614;  Tompkins  v.  Sprout,  55 

doctrine  of  equitable  subrogation  will  Cal.  31  ;  Merrell  v.  Johnson,  96  111.  224. 

not  be  applied  to  relieve  a  party  from  a  •*  Flash  v.  Wilkerson,  20  Fed.  Rep. 

loss  occasioned  by  his   own  unlawful  257.     Compare  note  to  Lore  v.  Dicrkes, 

act.     Guckenheimer   v.  Angevine,    81  16  Abb.  N.  C.  (N.  Y.)  47. 

N.  Y.  394.  '  66  N.  Y.  363 ;  overruling  the  court 

■  II  Wis.  380.  below,  7  Hun  (N.  Y.)  31. 


278  SUBROGATION  OF  PURCHASER.  §  I95 

payment  of  the  judgment  which  he  was  obliged  to  satisfy 
in  order  to  save  his  land  from  sale,  the  principles  of  justice 
and  equity  required  that  he  should  be  subrogated  to  all  the 
rights  and  securities  of  the  judgment-creditor,  especially  as 
the  latter  had,  when  his  judgments  were  paid,  secured  every- 
thing to  which  he  was  entitled.^  So  then,  again,  the  tend- 
ency of  the  court  to  prevent  a  merger  where  injustice  would 
result,  has  been  applied  to  cases  of  this  character.  Thus, 
in  Crosby  v,  Taylor,^  it  appeared  that  a  grantee  of  land  held 
it  by  a  deed  which  was  fraudulent  as  against  the  grantor's 
creditors.  By  a  subsequent  deed  the  grantee  secured  from 
a  prior  mortgagee  a  deed  of  quitclaim  of  all  the  latter's  in- 
terest in  the  premises  containing  this  clause,  "  which  said 
mortgage  is  hereby  cancelled  and  discharged."  The  court 
held  that  the  deed  constituted  an  assignment  of  the  mort- 
gage and  did  not  operate  by  way  of  merger  of  it  as  against 
the  grantor's  creditors. 

A  fraudulent  vendee  may  create  a  valid  lien  upon  the 
property  in  favor  of  a  mortgagee  in  good  faith. ^ 


'  See  Snelling  v.  Mclntyre,  6  Abb.  ^  Murphy  v.  Briggs,  89  N.  Y.  446 ; 

N.  C.  (N.  Y.)  471.     Compare  Robin-  First  National  Bank  of  Clinton  v.  Cum- 

son  V.  Stewart,  10  N.  Y.  190.  mins,  39  N.  J.  Eq.  577. 

"  15  Gray  (Mass.)  64. 


CHAPTER   XIV. 


INTENTION. 


§  196.  What  is  intention  ? 

197.  Actual  intent  not  decisive. 

198.  Fraud    of  agent    binding   upon 

principal. 

199.  Mutuality    of    participation     in 

fraudulent  intent. 

200.  Intent  afTecting  voluntary  alien- 

ations. 


§  201.  or  intention  where  consideration 
is  adequate. 

202.  Intention  to  defraud  subsequent 

creditors. 

203.  When    question    of    intent    res 

adjudicata. 

204.  Intent  a  question  for  the  jury. 

205.  Testifying  as  to  intent. 

206.  Proving  intent. 


*'  Where  there  is  an  actual  intent  to  defraud,  no  form  in  which  the  transaction  is  put  can 
shield  the  property  so  transferred  from  the  claims  of  creditors." — Chief  Judge  Ruger  in  Bill- 
ings V.  Russell,  101  N.  Y.  226,  234. 

§  196.. What  is  intention? — Further  .space  cannot  be  de- 
voted to  the  discussion  of  the  practical  details  of  procedure 
in  creditors'  suits  and  proceedings.  Let  us  next  direct  at- 
tention to  a  more  complete  consideration  of  the  general 
principles  and  theories  of  law  which  these  various  remedies 
are  devised  to  render  effectual.  The  rules  of  evidence, 
which,  as  will  appear,  constitute  a  most  important  branch 
of  the  subject,  will  then  be  noticed  in  a  general  way. 

First,  what  is  the  fraudulent  intent,  under  the  statute  of 
Elizabeth,  which  must  ordinarily  exist  to  enable  a  creditor 
to  defeat  the  debtor's  alienation?^  Sutherland,  J.,  in  Bab- 
cock  V.  Eckler.^  a  case  already  cited,  used  these  words  : 
"  Intent  or  intention  is  an  emotion  or  operation  of  the 
mind,  and  can  usually  be  shown  only  by  acts  or  declara- 
tions ;  and  as  acts  speak  louder  than  words,  if  a  party  does 
an  act  which  must  defraud  another,  his  declaring  that  he 
did  not  by  the  act  intend   to  defraud   is  wcighetl  down   by 


'  Harman  v.  Hoskins,  56  Miss.  142. 


'  24  N.  Y.  632. 


280  WHAT    IS    INTENTION?  §    1 96 

the  evidence  of  his  own  act."^  Fraud,  it  must  l)e  noted, 
does  not  consist  in  mere  intention,  but  in  intention  acted 
out,  or  made  effectual  by  hurtful  acts,^  in  conduct  that 
operates  prejudicially  upon  the  rights  of  others,  and  which 
was  so  intended.^  A  fraudulent  purpose  is  an  important 
element  in  the  case,  but  it  is  not  the  only  essential  requi- 
site ;  there  must  be  superadded  to  it,  besides  the  sale  or 
transfer,  actual  fraud,  hindrance,  or  delay  resulting  there- 
from to  the  creditors.*  While  it  may  possibly  be  true  that 
the  impressions,  emotions,  or  operations  of  the  mind  are 
never  effaced,  yet  they  can  be  reproduced  only  by  the  per- 
son whose  mind  gave  them  birth.  Their  true  nature  can 
onl}''  be  determined  or  guessed  at  by  other  persons  from 
the  color  of  the  outward  acts  which  the  emotions  inspired. 
Hence  the  court,  as  we  have  shown,  will  not  be  concluded 
by  the  statement  of  the  debtor's  mental  operations,  for  he 
is  usually  an  interested  party  ;  nor  will  it  accept  his  stand- 
ard of  morality  as  its  test.  In  Potter  v.  McDowell^  this 
language  is  used  :  "  When  a  voluntary  deed  is  made  by  a 
debtor  in  embarrassed  circumstances,  and  a  question  arises 
as  to  its  validity,  in  order  to  render  the  deed  fraudulent  in 
law  as  to  existing  creditors,  it  is  not  necessary  to  show  that 
the  debtor  contemplated  a  frand  in  making  it,  or  that  it 


'  See  Newman  v.  Cordell,  43  Barb,  sioning  an  injury  to  some  one."    See 

(N.  Y.)  456 ;  Monteith  v.  Bax,  4  Neb.  Masterton  v.  Beers,  i  Sweeny  (N.  Y.) 

171.     See  §§8,  9,  10.  419. 

■^  See  §13.     Learned,  P.  J.,  said  in  ^  Bunn  v.  Ahl,  29  Pa.  St.  390.    Com- 

Billings  V.  Billings,  31  Hun  (N.  Y.)  65,  pare  Smith  v.  Smith,  21  Pa.  St.  370. 

69:  "There  must  be  not  only  the  in-  •*  Rice  v.  Perry,  61  Me.  150. 

tent,  but  the  intent  must  be  so  carried  ^  31  Mo.  69.    See  White  v.  McPheet- 

out   that   some  creditors  are  actually  ers,    75    Mo.    294.      In    Wartman    v. 

hindered,  delayed,  or  defrauded Wartman,  Taney's   Dec.    370,    Chief- 

A  conveyance  is  made  with  fraudulent  Justice  Taney  said:  "As  regards  the 

intent  only  as  to  those  who  are  in  fact  question,  whether  a  contempt  has  or 

defrauded."     In  People  v.  Cook,  8  N.  has  not  been  committed,  it  does  not 

Y.  67,  79,  Willard,  J.,  said  :  "  Fraud  depend  on  the  intention  of  the  party, 

can  never,  in  judicial  proceedings,  be  but  upon  the  act  he  has  done."     See 

predicated  of  a  mere  emotion  of  the  Cartwright's  Case,  114  Mass.  239. 
mind,  disconnected  from  an  act  occa- 


§   197  ACTUAL    INTENT    NOT    DECISIVE.  28 1 

was  an  immoral   or  corrupt  act The  law  docs  not 

concern  itself  about  the  private  or  secret  motives  which 
may  influence  the  debtor";  he  may  believe  he  had  the 
right  to  make  it,  and  that  it  was  his  duty  to  do  it,  yet  if 
the  deed  is  voluntary,  and  hinders  and  delays  his  creditors, 
it  is  fraudulent.  It  may  be  observed  here  that  a  convey- 
ance is  fraudulent  if  the  grantor  meant  to  hinder  or  defraud 
any  of  his  creditors,  and  a  charge  conveying  the  idea  that 
he  must  have  meant  to  defraud  all  his  creditors,  is  mislead- 
ing,^ Also  that  it  is  not  necessary  to  show  that  the  fraud- 
ulent intent  constituted  the  sole  purpose,  but  only  that  it 
constituted  a  part  of.  the  purpose  and  design  with  which 
the  scheme  was  entered  into  ;  if  it  is  2i  part  of  the  scheme 
to  hinder  or  delay  creditors,  the  whole  transaction  is  void.^ 
"  The  intent  is  the  essential  and  poisonous  clement  in  the 
transaction."^  It  must  be  borne  in  mind  that  an  intent  to 
hinder,  delay,  or  defraud,  is  sufficient  to  avoid  the  sale;'*  it 
is  not  essential  to  show  a  union  of  these  elements,  though 
it  must  be  conceded  that  it  is  not  an  easy  task  to  distin- 
guish between  an  intent  to  hinder  and  an  intent  to  delay.^ 

§  197.  Actual  intent  not  decisive. — The  question  of  the 
donor's  actual  intent  is  not  then  necessarily  decisive.  A 
man  may  give  his  property  to  his  wife  or  children  in  the 
belief  that  he  has  the  right  to  do  so,  but  if  by  so  doing  his 
existing  creditors  are  hindered  or  delayed  the  conveyance 
will  be  set  aside.*^  In  Briorcrs  v.  MitchelF  the  court  said  : 
"  The  property  conveyed  to  the  wife  so  far  exceeds  in  value 
the  amount  of  the  money  which  it  was  conveyed  to  secure, 
it  is  of  itself  sufficient  to  authorize  the  holding  that  the 


'  Allen  V.  Kinyon,  41  Mich.  282.  ••  See  §  11. 

^  Manning  v.  Reilly,  16  Weekly  Dig.  '  Rupe  v.  Alkire,  77  Mo.  642.     See 

(N.  Y.)  230 ;  Holt  V.  Creamer,  34  N.  J.  Burgert  v.  Borchert.  59  Mo.  83. 

Eq.  187;   Russell  v.  Winne,  37  N.  Y.  'Winchester  v.    Charter,  97  Mass. 

596,  and  cases  cited  ;  Mead  v.  Combs,  140  ;  Potter  v.  McDowell,  31  Mo.  62  ; 

19  N.  J.  Eq.  112.  Patten    v.   Casey,    57    Mo.    118.      See 

3  Moore    v.   Hinnant,  89  N.  C.  455,  Chaps.  V.,  VI. 

459  ;  Worthy  v.  Brady,  91  N.  C.  269.  ''  60  Barb.  (N.  Y.)  316. 


282  FRAUD    OF    AGENT.  §   I98 

conveyance  was  fraudulent  as  against  antecedent  creditors, 
witliout  the  finding  of  actual  or  meditated  fraud."  In 
Lukins  v.  Aird/  Davis,  J.,  said  :  "  It  is  not  important  to 
inquire  whether,  as  matter  of  fact,  the  defendants  had  a 
purpose  to  defraud  the  creditors  of  Aird,  for  the  fraud  in 
this  case  is  an  inference  of  law,  on  which  the  court  is  as 
much  bound  to  pronounce  the  conveyance  in  question  void 
as  to  creditors,  as  if  the  fraudulent  intent  were  directly 
proved."  "  An  act  innocent  in  the  intention  may  be  so  in- 
jurious in  the  consequences,  that  the  law  declares  it  to  be  a 
fraud  and  forbids  it."^  That  the  debtor  made  the  convey- 
ance to  avoid  the  plaintiff's  claim  because  he  did  not  be- 
lieve it  to  be  just  will  not  sustain  the  transfer.^  This  sub- 
ject has  already  been  discussed.* 

§  198.  Fraud  of  agent  binding  upon  principal. — Warner 
V.  Warren  ^  establishes  the  principle  that  actual  fraudulent 
intent,  sufficient  to  avoid  a  transfer,  need  not  be  personal 
to  the  debtor.  In  this  case  a  husband  obtained  a  power  of 
attorney  from  his  wife  authorizing  him  to  transact  business 
as  her  agent.  By  means  of  false  statements  he  established 
a  fictitious  credit  for  her,  incurred  liabilities  in  her  name, 
and  then  induced  the  wife  to  make  an  assignment.  The 
wife  was  a  guileless,  artless  woman,  who  took  no  part  in 
the  business,  and  intended  to  commit  no  wrong,  but  was  a 
mere  passive  instrument  in  the  hands  of  her  husband,  by 
whom  the  frauds  were  perpetrated.  In  avoiding  the  as- 
signment, in  favor  of  an  attaching-creditor,  Grover,  J.,  said 
that  the  husband's  "  objects  became  hers ;  his  frauds  were 
her  frauds ;  and  she  is  responsible  therefor,  however  desti- 
tute of  any  knowledge  thereof."  This  case  is  a  valuable 
precedent,  showing  that  intent  may  be  established  by  im- 


1  6  Wall.  79.  3  Barrett    v.    Nealon,    119    Pa.    St. 

*  Kisterbock's    Appeal,    51    Pa.    St.  171. 

485.     Compare  Lawson  v.  Funk,  108  •*  See  §§  8,  9,  10. 

111.  507.  5  46  N.  Y.  228. 


§  199 


PARTICIPATION    IN    FRAUDULENT    INTENT. 


28 


plication  or  substitution,  and  that  mental  operation  or  emo- 
tion is  not  necessarily  the  test.^ 

§  199.  Mutuality  of  participation  in  fraudulent  intent, — 
Generally  speaking,  to  render  a  conveyance  fraudulent  and 
voidable  as  against  creditors,  there  must  have  been  mutu- 
ality of  participation  in  the  fraudulent  intent,  on  the  part 
of  both  the  vendor  and  the  purchaser.^ 


'  See  §8. 

■■'Curtis  V.  Valiton,  3  Mont.  157; 
Mehlhop  V.  Pettibone,  54  Wis.  652 ; 
Hall  V.  Arnold,  15  Barb.  (N.  Y.)  600; 
Wilson  V.  Prewett,  3  Woods  635 ; 
Hopkins  v.  Langton,  30  Wis.  379 ; 
Steele  v.  Ward,  25  Iowa  535  ;  Schroe- 
der  V.  Walsh,  120  111.  403;  Miller  v. 
Byran,  3  Iowa  58 ;  Chase  v.  Walters, 
28  Iowa  460 ;  Kittredge  v.  Sumner,  1 1 
Pick.  (Mass.)  50;  McCormickv.  Hyatt, 
33  Ind.  546  ;  Cooke  v.  Cooke,  43  Md. 
522,  525  ;  Fifield  v.  Gaston,  12  Iowa 
218;  Preston  v.  Turner,  36  Iowa  671  ; 
Drummond  v.  Couse,  39  Iowa  442  ; 
Kellogg  V.  Aherin,  48  Iowa  299;  Rea 
V.  Missouri,  17  Wall.  543 ;  Leach  v. 
Francis,  41  Vt.  670;  Partelov.  Harris, 
26  Conn,  480 ;  Ewing  v.  Runkle,  20  III. 
448;  Violett  V.  Violett,  2  Dana  (Ky.) 
323 ;  Foster  v.  Hall,  12  Pick.  (Mass.) 
89 ;  Byrne  v.  Becker,  42  Mo.  264 ; 
Bancroft  v.  Blizzard,  13  Ohio  30; 
Splawn  V.  Martin,  17  Ark.  146;  Gov- 
ernor V.  Campbell,  17  Ala.  566;  Ruhl 
V.  Phillips,  48  N.  Y.  125;  Jaeger  v. 
Kelley,  52  N.  Y.  274 ;  Clements  v. 
Moore,  6  Wall.  312  ;  Astor  v.  Wells,  4 
Wheat.  466  ;  Howe  Machine  Co.  v. 
Claybourn,  6  Fed.  Rep.  441. 

Nopartictpaiio7i  by  infant  in  fraud- 
ulent intent. — The  creditor  is  some- 
times embarrassed  or  foiled  by  a  con- 
veyance to  some  person  not  sui juris, 
as  for  instance  an  infant.  In  Hamilton 
V.  Cone,  99  Mass.  478,  Gray,  J.,  said  : 
"  The  only  case  cited  for  the  tenant 
which  requires  special  consideration  is 


that  of  Goodwin  v.  Hubbard,  15  Mass. 
210.  But  in  that  case  the  person  to 
whom  the  conveyance  was  made,  as 
well  as  his  subsequent  grantee,  the  de- 
mandant, participated  in  the  fraudulent 
intent  of  the  debtor,  who  paid  the 
purchase-money  ;  and  the  decision  by 
which  this  court,  having  then  no  juris- 
diction in  equity  to  redress  fraud,  held 
that  a  grantee  who  participated  in  the 
fraudulent  intent  could  not  maintain  a 
writ  of  entry  against  a  creditor  who 
had  taken  the  land  on  execution  against 
the  fraudulent  debtor,  cannot  be  ex- 
tended to  this  case,  in  which  the  de- 
mandant at  the  time  of  the  conveyan'ce 
to  him  was  an  infant  of  less  than  a 
year  old,  and  could  not  participate  in 
the  fraud,  and  there  was  no  offer  to 
show  that  the  conveyance  was  without 
adequate  consideration."  Citing  Howe 
V.  Bishop,  3  Met.  (Mass.)  30 ;  Clark  v. 
Chamberlain,  13  Allen  (Mass.)  257. 
See  Mathes  v.  Dobschuetz,  72  111.  438  ; 
Tenney  v.  Evans,  14  N.  H.  343  ;  s.  C. 
40  Am.  Dec.  194.  See,  also,  §26.  In 
Matthews  v.  Rice,  31  N.  Y.  460,  it  is 
asserted  that  the  fact  that  the  plaintiff 
was  an  infant  and  purchased  partly 
upon  credit  from  a  firm  in  apparently 
straitened  pecuniary  circumstances,  did 
not  render  the  sale  void  in  law  as 
against  creditors.  The  court  said : 
"  The  infancy  of  the  plaintiff  did  not 
alter  or  affect  the  transaction,  save  as 
a  circumstance  bearing  upon  the  ques- 
tion of  fraud  in  fact.  There  is  no  legal 
bar  to  the  right  of  an  infant  to  pur- 


284  PARTICIPATION    IN    FRAUDULENT    INTENT.  §    1 99 

In  discussing  this  subject  Chief-Justice  Church  used 
these  words  :  "  Nor  is  the  vendor's  fraudulent  intent  suffi- 
cient. The  vendee  must  be  also  implicated."^  So  in  an- 
other case  it  is  asserted  that  in  order  to  set  aside,  as  fraud- 
ulent against  creditors,  a  conveyance  to  one  creditor,  he 
must  have  participated  in  or  have  been  cognizant  of  the 
grantor's  unlawful  motives  when  he  accepted  the  convey- 
ance.*^ In  Prewit  v.  Wilson,^  Field,  J.,  observed  :  "  When 
a  deed  is  executed  for  a  valuable  and  adequate  considera- 
tion, without  knowledge  by  the  grantee  of  any  fraudulent 
intent  of  the  grantor,  it  will  be  upheld,  however  fraudulent 
his  purpose.  To  vitiate  the  transfer  in  such  case,  the 
grantee  also  must  be  chargeable  with  knowledge  of  the 
intention  of  the  grantor."  It  is  even  held  in  Dudley  v. 
Danforth,^  by  the  New  York  Commission  of  Appeals,  that 
where  a  vendee  purchased  property  solely  with  a  view  of 
receiving  payment  of  an  honest  debt,  an  intent  on  the  part 
of  the  debtor  to  hinder  and  defraud  creditors  would  not 
affect  the  vendee's  title,  although  the  vendee  had  notice  of 
thre  intent,  provided  he  did  not  participate  in  it.^  This 
would  seem  to  justify  action  on  the  part  of  a  creditor  by 


chase  property  either  for  cash  or  upon  embodied  in  Dudley  v.  Danforth  may 

credit ;  and  the  vendor  cannot  avoid  well  be  doubted.     The  general  rule  is 

or  retract  the  sale,  or  question  its  va-  that  notice  of  the  debtor's  fraudulent 

lidity  on  the  ground  that  the  vendee  is  design   is   fatal  to  the  vendee's   title, 

an  infant,  much  less  can  a  stranger  im-  Atwood    v.    Impson,    20    N.    J.    Eq. 

peach  the  sale  on  that  ground.     In  this,  156, 

as  in  other  cases  of  a  sale  of  chattels.         Rules  as  to  corporations. — The  rules 

its  invalidity  as  to  creditors   depends  governing  fraudulent  transfers  are  also 

upon  whether  it  was  made  with  intent  applicable  to  corporations.     See  Curtis 

to  defraud  them."     See  Washband  v.  v.  Leavitt,  15  N.  Y.  9.     In  Graham  v. 

Washband,  27    Conn.  424;  Carter   v.  Railroad  Co.,  102  U.  S.  161,  Bradley, 

Grimshaw,  49  N.  H.  100.  J.,  said  :  "  We  see  no  reason  why  the 

'  Jaeger   v.    Kelley,    52   N.   Y.   275.  disposal  by  a  corporation  of  any  of  its 

See  Starin  v.  Kelly,  88  N.  Y.  421.  property  should  be  questioned  by  sub- 

-  Roe  V,  Moore,  35  N.  J.  Eq.  526.  sequent  creditors  of  the   corporation, 

3  103  U.  S.  24.  any  more  than  a  like  disposal  by  an 

*  61  N.  Y.  626,  individual  of  his  property  should  be  so. 

'•  Criticised  in  Roeber  v.  Bowe,  26  The  same  principles  of  law  apply  to 

Hun   (N.  Y.)    557.     The   proposition  each," 


»^   200 


INTENT    AFFECTING    ALIENATIONS. 


28s 


means  of  which  the  debtor  could  be  deluded  and  a  prefer- 
ence gained  by  the  creditor  vendee. 

§  200.  Intent  affecting  voluntary  alienations. — The  rule  as 
to  intent  in  voluntary  alienation,  as  we  shall  presently  see, 
necessarily  differs  from  cases  where  a  valuable  consideration 
is  present.  In  the  latter  class  of  cases  mutual  participation 
in  the  fraudulent  design  must  of  course  be  established. 
Where  the  alienation  is  voluntary  the  invalidity  may  be 
predicated  of  the  fraudulent  intent  of  the  vendor  without 
regard  to  the  knowledge  or  motives  of  the  vendee.  In 
such  cases  the  vendee  is,  of  course,  cognizant  of  the  fact 
that  nothing  was  paid  for  the  property.  The  cases  relating 
to  this  branch  of  the  inquiry  are  reviewed  by  the  Supreme 
Court  of  Maine  in  Laughton  v.  Harden,^  an  important  case 
from  which  we  have  already  quoted.^     Judge  Story  thus 


'  68  Me.  213.  See  Tucker  v.  An- 
drews, 13  Me.  124;  Lee  v.  Figg,  37 
Cal.  328 ;  Watson  v.  Riskamire,  45 
Iowa  233  ;  Stearns  v.  Gage,  79  N.  Y. 
102. 

'  See  §§  97,  98. 

T/te  cases  as  to  intent —  Voluntary 
conveyances. — The  court  in  Laughton 
V.  Harden,  68  Me.  213,  summarize  the 
cases  as  follows :  "  In  Hitchcock  v. 
Kiely,  41  Conn.  611,  it  was  decided 
that  '  a  voluntary  conveyance,  fraudu- 
lent in  fact,  will  be  set  aside  in  favor 
of  creditors,  whether  the  grantee  par- 
ticipated in  the  fraud  or  not.'  In  that 
case,  the  contending  party  was  a  cred- 
itor subsequent  to  the  conveyance.  In 
Beecher  v.  Clark,  12  Blatchf.  256,  a 
voluntary  conveyance  was  set  aside  for 
the  benefit  of  both  prior  and  subse- 
quent creditors.  Hunt,  J.,  says :  '  I 
cannot  assent  to  the  proposition,  that 
it  is  necessary  that  the  grantee  should 
have  known  that  the  intent  of  the 
grantor  was  fraudulent,  and  that  she 
should  have  been  an  intentional  party 
to  the  fraud.     The  fact  that  a  wife  re- 


ceived a  voluntary  conveyance  of  the 
same,  in  ignorance  of  these  facts  (show- 
ing fraud  in  fact),  will  not  make  the 
conveyance  a  valid  one.'  Savage  v. 
Murphy,  8  Bosw.  (N.  Y.)  75,  contains 
a  learned  and  lengthy  review  by  Hoff- 
man, J.,  of  the  earlier  decisions  by 
which  subsequent  purchasers  and  cred- 
itors were  permitted  to  question  con- 
veyances as  being  fraudulent  against 
them,  and  this  proposition  is  there  laid 
down  :  '  Where  a  deed  is  made  to  de- 
fraud creditors,  by  one  at  the  time  in 
debt,  and  who  subsequently  continued 
to  be  indebted,  it  is  fraudulent  and 
void,  as  to  all  such  subsequent  as  well 
as  existing  creditors.'  See  also  Car- 
penter V.  Roe,  10  N.  Y.  227.  In  Mo- 
hawk Bank  v.  Atwater,  2  Paige  (N.  Y.) 
54,  Chancellor  Walworth  says  :  '  It  is 
of  no  consequence  in  this  suit  whether 
the  son  knew  of  the  extent  of  his  fa- 
ther's indebtedness  or  not.  The  grantee 
without  valuable  consideration  cannot 
be  protected,  although  he  was  not  privy 
to  the  fraud.'  In  Carter  v.  Crimshaw, 
49  N.  H.  100,  the  intent  of  minor  chil- 


286  WHERE    CONSIDERATION    IS    ADEQUATE.  §   201 

States  the  rule  borrowed  from  the  civil  law  by  both  the 
common  law  and  the  courts  of  chancery  :  "  Hence,  all 
voluntary  dispositions,  made  by  debtors,  upon  the  score  of 
liberality,  were  revocable,  whether  the  donee  knew  of  the 
prejudice  intended  to  the  creditors  or  not."^ 

§  201.  Of  intention  where  consideration  is  adequate. — The 
rule  that  a  voluntary  conveyance  of  property  by  a  debtor 
may  be  annulled  at  the  suit  of  creditors,  seems  to  commend 
itself  as  being  both  necessary  and  reasonable.  The  theory 
of  the  law  is,  as  we  have  observed,  that  the  debtor's  prop- 
erty constitutes  a  fund  upon  which  the  creditors  are  sup- 
posed to  have  relied  in  extending  the  credit,^  and  to  which 
they  are  entitled  to  resort  for  payment  of  their  claims. 
The  plainest  dictates  of  common  sense,  and  the  simplest 
principles  of  justice  require  that  any  depletion  of  this  fund 
should  not  be  permitted  in  favor  of  a  voluntary  alienee,  in 
cases  where  creditors  remain  unpaid.     Chief-Justice  Shaw 


dren  upon  whom  a  settlement  was  made  '  It  (the  allegation)  avers  that  the  con- 
was  considered  of  no  consequence  at  veyahce  to  Ogden  was  without  consid- 
all.  Coolidge  v.  Melvin,  42  N.  H.  510,  eration,  and  this  is  sufficient  to  avoid 
534,  sustains  the  same  view.  In  Sav-  it  as  to  creditors  of  Lee  (the  grantor), 
age  V.  Murphy,  34  N.  Y.  508,  the  same  whether  Ogden  was  aware  of  the  fraud- 
idea  is  strongly  presented  by  the  court,  ulent  purpose  of  Lee  and  actively  aided 
Among  other  things  said  about  the  it  or  not.'  Lassiter  v.  Davis,  64  N.  C. 
rights  of  subsequent  creditors  against  a  498,  decides  that  '  a  voluntary  gift  is 
voluntary  deed,  this  is  added  :  '  The  void,  if  it  was  the  maker's  intent  to 
indebtedness  then  existing  was  merely  hinder,  delay,  or  defraud  creditors, 
transferred,  not  paid,  and  the  fraud  is  whether  the  party  who  takes  the  gift 
as  palpable  as  it  would  be  if  the  debts  participated  in  the  fraudulent  intent  or 
now  unpaid  were  owing  to  the  same  not.'  In  Foley  v.  Bitter,  34  Md.  646, 
creditors  who  held  them  at  the  time  of  it  was  held  to  the  same  effect,  and  it  is 
the  transfers.'  In  Clark  v.  Chamber-  there  said  :  '  The  innocence  of  the 
lain,  13  Allen  (Mass.)  257,  260,  Hoar,  trustee,  or  of  the  creditors  named  in 
J.,  remarks  :  '  Where  the  purpose  of  the  deed,  will  not  save  it  (an  assign- 
the  grantor  is  shown  to  have  been  act-  ment)  from  condemnation  under  the 
ually  fraudulent  as  to  creditors,  it  is  statute  (of  Elizabeth)  if  fraudulent  in 
sufficient  to  prove  that  the  grantee  fact  on  the  part  of  the  grantor.' " 
takes  without  consideration,  without  >  Story's  Eq.  Jur.  §§  351,  353,  355  ; 
provmg  otherwise  his  participation  in  Spaulding  v.  Blythe,  73  Ind.  94. 
the  fraudulent  intent.'  Lee  v.  Figg,  37  ^  See  Chap.  II. 
Cal.  328,  concludes  an  opinion  thus  : 


§   20I  WHERE    CONSIDERATION    IS    ADEQUATE.  287 

said:  "In  a  voluntary  absolute  conveyance,  the  fact  that 
no  consideration  is  paid  is,  of  course,  known  to  both 
parties.  If  the  grantor  was  in  debt  at  the  time,  as  such 
conveyance  must  necessarily  tend  to  defeat  the  rights  of 
creditors,  and  as  all  persons  are  presumed  to  contemplate 
and  intend  the  natural  and  probable  consequences  of  their 
own  acts,  the  conclusion  is  irresistible  that  such  conveyance 
was  intended  to  defeat  creditors,  and  is  therefore  fraudu- 
lent." ^  A  different  question,  however,  is  presented  where 
full  pecuniary  consideration  has  been  paid  by  the  pur- 
chaser. Can  the  transfer  be  nullified  in  such  cases,  and  if 
so,  in  what  instances  and  upon  what  theory  ?  The  answer 
is  that,  generally  speaking,  a  debtor's  conveyance  can  be  set 
aside  where  it  is  made  with  a  mutual  fraudulent  intent  to 
hinder,  delay,  and  defraud  creditors,  and  that  adequacy  of 
consideration  will  not  save  it.  In  this  class  of  cases  "the 
question  of  intent  becomes  prominently  material."''  Lord 
Mansfield  said,  in  discharging  a  rule  for  a  new  trial  in 
Cadogan  v.  Kennett:^  "If  the  transaction  be  not  bona 
fide,  the  circumstance  of  its  being  done  for  a  valuable 
consideration  will  not  alone  take  it  out  of  the  statute.  I 
have  known  several  cases  where  persons  have  given  a  fair 
and  full  price  for  goods,  and  where  the  possession  was 
actually  changed,  yet,  being  done  for  the  purpose  of  de- 
feating creditors,  the  transaction  has  been  held  fraudulent, 
and  therefore  void."  The  "several  cases"  of  which  tliis 
learned  jurist  had  knowledge,  where  conveyances  founded 

'  Marden  v.  Babcock,  2  Met.  (Mass.)  purchaser  not  a  creditor  who   should 

104.     See  First  Nat.  Bank  v.  Bertschy,  buy  the  property  of  a  debtor,  however 

52  Wis.  443.  adequate  might  be    the   consideration 

^  Bradley  v.  Ragsdale,  64  Ala.  559.  which  he  paid,  with  a  knowledge  that 
"  A  sale  of  property,  even  for  full  it  was  the  intention  of  the  debtor  by 
value,  in  order  to  hinder  or  delay  cred-  the  sale  to  put  the  property  beyond  the 
itors,  both  vendor  and  vendee  knowing  reach  of  his  creditors,  would  be  a  mala 
the  fraudulent  purpose,  cannot  be  up-  fide  purchaser  and  entitled  to  no  pro- 
held."  Treat,  J.,  in  Stinson  v.  Haw-  tection  as  against  creditors." 
kins,  4  McCrary  504.  In  Grcenleve  v.  ^  2  Cowp.  434. 
Blum,  59  Tex.  127,  the  court  say:  "A 


288  WHERE    CONSIDERATION    IS    ADEQUATE.  §   20I 

upon  adequate  consideration  had  been  overturned  by  rea- 
son of  the  bad  faith  of  the  participants,  have  grown  to 
thousands,  and  the  subject  has  become  one  of  vital  in- 
terest and  paramount  importance.  That  a  conveyance, 
whether  it  be  of  real  or  personal  property,  founded  upon 
adequate  consideration,  may  be  vacated  for  fraud,  is  estab- 
lished in  an  endless  variety  of  cases,  a  few  only  of  which 
we  will  cite.^  In  Wadsvvorth  v.  Williams,^  Hoar,  J.,  in 
delivering  the  opinion  of  the  Supreme  Court  of  Massa- 
chusetts, said  :  "  A  conveyance  made  with  an  actual  pur- 
pose and  intent  to  defraud  creditors,  present  or  future,  is 
not  valid  against  them  in  favor  of  a  grantee  who  partici- 
pates in  the  fraudulent  intention,  although  made  for  a  full 
consideration,  and  by  a  grantor  in  the  possession  of  any 
amount  of  property."  The  learned  Chief-Justice  Black 
observed:  "If  a  debtor,  with  the  purpose  to  cheat  his 
creditors,  converts  his  land  into  money,  because  money  is 
more  easily  shuffled  out  of  sight  than  land,  he  of  course 
commits  a  gross  fraud.  If  his  object  in  making  the  sale  is 
known  to  the  purchaser,  and  he  nevertheless  aids  and  as- 
sists in  executing  it,  his  title  is  worthless,  as  against  credit- 
ors, though  he  may  have  paid  a  full  price.  But  the  rule  is 
different  when  property  is  taken  for  a  debt.  One  creditor 
of  a  failing  debtor  is  not  bound  to  take  care  of  another. 
It  cannot  be  said  that  one  is  defrauded  by  the  payment  of 
another.  In  such  cases,  if  the  assets  are  not  large  enough 
to  pay  all,  somebody  must  suffer.  It  is  a  race  in  which  it 
is  impossible  for  every  one  to  be  foremost."^  It  matters 
not  what  price  was  paid,  or  how  early  after  the  sale  pos- 
session was  changed,  or  how  notorious  the  transaction  was, 


'  Brinks   v.    Heise,    84  Pa.  St.  251  ;  3  M.  &  S.  371  ;  Covanhovan  v.  Hart, 

Ashmead  v.  Hean,  13  Pa.  St.  584;  Cox  21  Pa.  St.  500;  Grover  v.  Wakeman, 

V.  Miller.  54  Tex.  27;  Stinson  v.  Haw-  11  Wend.  (N.  Y.)  192;  Stone  v.  Spen- 

kins,  13  Fed.  Rep.  833  ;    Hartshorn  v.  cer,  77  Mo.  359. 

Eames,  31  Me.  93  ;    Holbird  v.  Ander-  ^  100  Mass.  130. 

son,  5  T.  R.  235  ;  Pickstock  v.  Lyster,  -  Covanhovan  v.  Hart,  21  Pa.  St.  500. 


§   20I  WHERE    CONSIDERATION    IS    ADEQUATE,  289 

if  the  vendor  made  the  sale  in  order  to  defraud  his  creditors, 
and  the  vendee  purchased  with  the  design  to  aid  him  in  the 
perpetration  of  the  fraud,  the  sale  is  no  more  valid  or  ef- 
fectual against  such  creditors  than  as  if  no  consideration 
had  passed.^  The  right  of  a  debtor,  even  in  failing  circum- 
stances, to  prefer  a  creditor,^  or  to  sell  and  dispose  of  his 
property  in  good  faith  and  for  value,  to  whomsoever  he 
wishes,  is  generally  unquestioned  in  the  courts.^  Thus  the 
intention  to  defeat  an  execution  creditor  will  not  render 
the  sale  fraudulent  if  it  was  made  for  a  valuable  considera- 
tion, and  is  bo7ia  fide  and  absolute,^  So  a  confession  of 
judgment  with  intent  to  give  priority  is  valid. '^  The  trans- 
fers w^hich  we  have  instanced  as  objectionable  are  those 
which  are  merely  colorable,  or  in  which  some  secret  right, 
benefit,  favor,  or  interest  is  reserved  to  the  debtor,  or  some 
unusual  incident  attends  the  transaction,  stamping  it  as  be- 
ing out  of  the  ordinary  course  of  business,  and  as  having 
been  contrived  to  hinder,  delay,  or  defraud  creditors.  Pay- 
ment of  the  consideration  is  often  in  such  cases  a  part  of 
the  scheme  to  more  completely  cover  and  conceal  the  fraud. 
Hence  it  is  said  that  it  is  not  the  consideration,  but  the  in- 
tent with  which  a  conveyance  is  made,  that  makes  it  good 
or  bad  as  to  creditors.*^ 

In  Jones  v.  Simpson  "'  it  was  said  that  where  bad  faith,  in 
the  vendor  appeared  the  burden  was  cast  upon  the  vendee 
to  show  consideration,  and  this  being  established  the  cred- 


'  Stone  V.  Spencer,  'j']  Mo.  359.  19  Grant  (Ont.)  578  ;    Nimmo  v.  Kay- 

"  Bostwick  V.  Burnett,  74  N.Y.  319;  kendall,  85  111.  476;  Riches  v.  Evans, 

Hauselt  v.  Vilmar,  2  Abb.  N.  C,  (N.  9  C.  &  P.  640;  Frazer  v.  Thatcher,  49 

Y.)  222;   Gray  V.  McCallister,  50  Iowa  Texas  26;  Clark  v.  Morrell.  21  U.  C. 

497.  Q.  B.  6c»  ;  Darvill  v.  Terr)-.  6  H.  &  N. 

^  Hobbs  V.  Davis,  50  Ga.  214  ;   Hall  807. 

V,  Arnold,  15  Barb.  (N.  Y.)  599.  "^  Beards  v.  Wheeler.  1 1  Hun  (N.  Y.) 

*  Wood  V.  Dixie,  7  Q.  B.  892  ;  Storey  539 ;  Holbird  v.  Anderson.  5  T.  R.  235. 

V.  Agnew,  2  Bradw.  (HI.)  353  ;  Wilson  See  §  1 1. 

V,  Pearson,  20  111.  81;  Francis  v.  Ran-  «  Hunters   v.  Waite,  3  Gratt.  (Va.) 

kin,  84  111.  169;    Dudley  v.  Danforth,  26  ;  Lockhard  v.  Beckley,  10  W.  Va.96. 

61  N.  Y.  626;  Dalglish  v.  McCarthy,  '  116  U.  S.  610. 
19 


290  INTENTION    TO    DEFRAUD.  §   202 

iters  must  assume  the  burden  of  attacking  the  vendee's 
good  faith.  This  seems  to  state  the  rule  correctly,  but 
general  expressions  to  the  effect  that  proof  of  bad  faith  in 
the  vendor  throws  the  burden  of  establishing  both  consider- 
ation a7id  good  faith  upon  the  vendee  are  frequently  en- 
countered in  the  authorities. 

§  202.  Intention  to  defraud  subsequent  creditors. — We  have 
elsewhere  seen  that,  generally  speaking,  a  voluntary  aliena- 
tion is,  as  to  existing  creditors,  presumptively  fraudulent, 
but,  as  to  subsequent  creditors,  a  fraudulent  intent  must  be 
proved  or  established.^  While  a  conveyance  made  to  de- 
fraud a  subsequent  judgment-creditor  is  within  the  statute,' 
it  seems  to  be  laid  down  in  some  of  the  cases  that  subse- 
quent creditors  can  only  avail  themselves  of  the  fraud 
which  is  practiced  against  them.^  In  Simmons  v.  Ingram"* 
the  court  said  :  "  To  make  a  deed  void  as  to  subsequent 
creditors,  there  must  be  proof  of  an  intent  to  defraud 
them ;  it  is  not  sufficient  that  there  is  an  intent  to  defraud 
others  whose  debts  were  in  existence  at  the  time."  ^  In 
Florence  Sewing  Machine  Company  v.  Zeigler,^  it  was  held 
that  in  order  to  avoid  a  sale  founded  upon  an  adequate  new 
consideration — that  is,  not  in  payment  of  an  antecedent  debt 
— on  the  alleged  ground  that  it  was  made  to  hinder,  delay, 
and  defraud  creditors,  the  creditor  attacking  the  sale  must 
show  two  things  :  first,  that  the  vendor  made  the  sale  with 
such  intent,  and  second,  that  the  purchaser  participated  in 
such  intent,  or  knew  of  its  existence,  or  had  knowledge  of 


'  Rose  V.   Brown,  n  W.  Va.  134;  3  Harlan  v.  Maglaughlin,  90  Pa.  St. 

Shand  v.  Hanley,  71  N.  Y.  319-322  ;  293  ;  Snyder  v.  Christ,  39  Pa.  St.  499  ; 

Burdick  v.  Gill,  2  McCrary  488  ;  Flor-  Monroe  v.  Smith,  79  Pa.  St.  459 ;  Kim- 

ence  S.  M.  Co.  v.  Zeigler,  58  Ala.  224  ;  ble  v.  Smith,  95  Pa.  St.  69  ;   Haak's 

Harlan  v.  Maglaughlin,  90  Pa.  St.  293,  Appeal,  100  Pa.  St.  62. 

See  Mullen  v.  Wilson,  44  Pa.  St.  416  ;  ■'60  Miss.  898. 

Partridge  v.  Stokes,  66  Barb.  (N.  Y.)  '  Citing  Hilliard  v.  Cagle,  46  Miss. 

586  ;  Herring  v.  Richards,  I  McCrary  309 ;  Prestidge  v.  Cooper,  54  Miss.  74. 

574  ;  City  Nat.  Bank  v.  Hamilton,  34  Compare  Teed  v.  Valentine,  65  N.  Y. 

N.  J.  Eq.  160.     See  Chapters  V.,  VI.  474,  and  cases  cited. 

'^  Hoffman  v.  Junk,  51  Wis.  614.  '  58  Ala.  224. 


§§   203,   204  RES    ADJUDICATA.  29 1 

some  fact  calculated  to  put  him  on  inquiry,  and  which  if 
followed  up  would  have  led  to  the  discovery  that  the  vend- 
or's intent  was  fraudulent.^ 

§  203.  When  question  of  intent  res  adjudicata. — In  Stock- 
well  v.  Silloway*^  the  Supreme  Court  of  Massachusetts 
said  :  "  To  prove  the  intent  of  the  defendant  in  making 
the  conveyances  alleged  to  be  fraudulent  in  the  charges 
filed  by  the  plaintiff,  it  was  competent  to  show  other  fraud- 
ulent conveyances  made  about  the  same  time,  and  as  a  part  '  ~ 
of  the  same  scheme  of  fraud.  For  this  purpose  the  plain- 
tiff introduced  the  record  of  a  judgment  of  the  Superior 
Court  rendered  in  proceedings  between  the  same  parties, 
under  the  provisions  of  the  general  statutes  in  relation  to 
poor  debtors,  adjudging  the  defendant  guilty  of  the  charges 
therein  alleged  against  him.  The  plaintiff  asked  the  court 
to  rule  that  this  judgment  was  conclusive  evidence  that  the 
conveyances  set  forth  in  the  former  case  as  fraudulent,  and 
upon  which  the  defendant  was  then  convicted,  were  fraud- 
ulent, as  alleged.  We  are  of  opinion  that  the  court  erred 
in  refusing  this  ruling.  When  a  fact  has  once  been  put  in 
issue  and  determined  by  a  final  judgment  in  the  course  of 
a  judicial  proceeding,  such  judgment  is  conclusive  evidence 
of  the  existence  of  the  fact  in  all  controversies  between  the 
same  parties  in  which  it  is  material.  It  is  to  be  re  yarded 
as  a  fixed  fact  between  the  parties  for  all  purposes."  ^ 

§  204.  Intent  a  question  for  the  jury. — The  question  of 
fraudulent  intent  is  almost  uniformly  one  of  facf*  to  be  sub- 
mitted to  a  jury,^  and  it  is  regarded  as  error  for  the  court 
to  interfere  With  the  province  of  the  jury  in  this  particular," 


'  Crawford  v.  Kirksey,  55  Ala.  282.  ^  Weaver  v.  Owens,  16  Ore.  304. 

•  113  Mass.  385.  "  Peck  v.  Crouse,  46  Barb.  (N.  Y.) 

^  See  Burlen  v.  Shannon,  99  Mass.  151;    Montcith    v.   Bax,  4   Neb.    171; 

200,  and  cases  cited  ;  Commonwealth  Vance  v.  Phillips,  6  Hill  (N.  Y.)  433  ; 

V.  Evans,  loi  Mass.  25  ;  Dennis'  Case,  Hobbs  v.  Davis,  50  Ga.  214;  Murray 

no  Mass.  18.  v.  Burtis,  15  Wend.  (N.  Y.)  214  ;  Syra- 

^  Morgan  v.  Hecker,  74  Gal.  543.  cuse  Chilled  Plow  Co.  v.  Wing,  85  N. 


292         INTENT  A  QUESTION  FOR  THE  JURY.       §  204 

unless,  as  we  have  seen/  the  fraud  is  apparent  on  the  face 
of  the  instrument  from  a  legal  construction  of  it.*^  In 
determining  the  intent  great  latitude  is  allowed.^  The 
rule  as  to  submission  to  the  jury  is  not  departed  from  even 
in  strong  and  apparently  conclusive  cases.  If  the  jury  err 
the  verdict  may  be  set  aside.  Thus,  in  Vance  v.  Phillips,"* 
it  appeared  that  an  insolvent  merchant  sold  his  entire  stock 
of  goods  to  an  infant,  who  was  also  his  clerk  and  brother- 
in-law,  taking  the  infant's  note  in  payment,  and  then  ab- 
sconded. A  verdict  of  a  jury,  affirming  the  validity  of  the 
transaction,  was  promptly  set  aside  as  contrary  to  evidence.^ 
Especially  will  the  verdict  be  overturned  where  it  is  appar- 
ent that  the  jury  must  have  misapprehended  the  evidence.^ 
By  statute,  in  New  York  the  question  of  fraudulent  intent 
in  these  cases  "  shall  be  deemed  a  question  of  fact,  and  not 
of  law,'"^  and  it  was  strenuously  claimed  in  behalf  of  the 
vendee,  in  the  recent  and  well-considered  case  of  Coleman 
v.  Burr,^  that  there  was  no  finding  by  the  referee  of  a 
fraudulent  intent ;  but  that  on  the  contrary  he  had  found 
the  whole  transaction  to  be  fair  and  honest,  and  that  there- 
fore the  transaction  should  stand.  The  court  say,  however, 
that  the  referee  has  "  found  facts  from  which  the  inference 
of  fraud  is  inevitable,  and  although  he  has  characterized  the 
transactions  as  honest  and  fair,  that  does  not  make  them 
innocent,  nor  change  their  essential  character  in  the  eye  of 
the  law.  Mr.  Burr  [the  debtor]  must  be  deemed  to  have 
intended  the  natural  and  inevitable  consequences  of  his 
acts,  and  that  was  to  hinder,  delay,  and  defraud  his  credit- 


Y.  426  ;  Van  Bibber  v.  Mathis,  52  Tex.        ^  See  also  Dodd  v,  McCravv,  8  Ark. 

409;  Winchester  V.  Charter,  102  Mass.  83;    Potter  v.  Payne,   21  Conn.  362; 

272  ;  Peiser  v.  Peticolas,  50  Tex.  638.  Marston  v.  Vultee,  12  Abb.  Pr.  (N.  Y.) 

^  See  §§  8,  9,  10.  143. 

-  Van  Bibber  v.  Mathis,  52  Tex.  409.         ^  Edwards  v.  Currier,  43  Me.  474. 

'  Winchester  v.  Charter,  102  Mass.         '  2  N.  Y.  R.  S.  137,  §4. 
2^76.  ®  93  N.  Y.  31,     See  Neisler  v.  Harris, 

'6  HilKl  ".  115  Ind.  565. 


§  205  TESTIFYING    AS    TO    INTENT.  293 

ors."^  This  principle  has  already  been  discussed  in  the 
opening  chapter,^  but  in  view  of  the  peculiar  wording  of 
the  New  York  statute,  it  is  deemed  important  to  give  the 
construction  placed  upon  it  by  the  court  of  final  resort.'^ 

§  205.  Testifying  as  to  intent. — A  party  being  a  witness 
may  testify  as  to  his  intention  in  performing  an  act  where 
such  intention  becomes  material.'*  The  purchaser  may,  in 
answer  to  a  question,  testify  directly  that  he  did  not  have 
any  fraudulent  intent  and  that  the  purchase  was  made  in 
good  faith.  That  it  is  proper  to  put  such  a  question  to 
the  purchaser  was  directly  decided  in  the  case  of  Bedell  v. 
Chase,^  though  the  contrary  seems  to  be  held  in  Minne- 
sota.® In  Blaut  v.  Gabler '''  this  question  was  asked  :  "  Had 
anything  transpired  between  Blaut  and  yourself — conversa- 
tion or  otherwise — whereby  you  gave  him  to  understand, 
or  whereby  it  was  understood,  that  the  transaction  was  for 
an  improper  purpose,  or  the  purpose  of  defrauding  your 
creditors  ? "  The  court  decided  that  the  question  was  prop- 
erly excluded  upon  the  theory  that  it  did  not  call  for  a 
statement  of  the  witness  as  to  his  intent  to  defraud,  but 
went  far  beyond  this,  and  asked  for  a  conclusion  from  what 
had  transpired.  The  question  was  characterized  as  being 
indefinite  and  complicated,  and  as  not  coming  within  the 
rule  which  sanctions  an  inquiry  as  to  the  intent  of  a  party. 
As  a  general  rule,  it  is  proper  to  allow  the  parties  to  testify 
concerning  their  intentions,^  though  this  class  of  testimony 


'  Citing  Bump  on  Fraud.  Conv.  (3d  See   Hale   v.  Taylor.   45  N.  H.   406 ; 

ed.)  22,  24,  272,  278  ;  Cunningham  v.  Royce  v.  Gaian,  76  Ga.  79 ;  Sedgwiclc 

Freeborn,  11  Wend,  (N.  Y.)  241  ;  Ed-  v.  Tucker,  90  Ind.  281. 

gell    V.    Hart,  9  N.  Y.   213;    Ford  v.  '34  N.  Y.  386;  Starin  v.  Kelly,  88 

Williams,  24  N.  Y.  359 ;   Babcock  v.  N.  Y.  422. 

Eckler,  24  N.  Y.  623,  632.  '  Hathaway  v.  Brown,  18  Minn.  414. 

•■'  See  §§  9,  10.  '  77  N.  Y.  465. 

^  See,  as  to  intent  to  violate  usury  "  Bedell   v.   Chase,    34  N.  Y.    3S8  ; 

statutes,  Fiedler  v.  Darrin,  50  N.  Y.  Griffin   v.    Marquardt,  21    N.  Y.    121  ; 

4j8.  Snow  V.  Paine,  1 14  Mass.  520 ;  Thacher 

^  Graves  v.  Graves,  45  N.    H.    323.  v.  Phinney,  7  Allen  (Mass.)  146  ;  Sey- 


294  PROVING  INTENT.  §  206 

is  necessarily  subjected  to  close  scrutiny.  When  the  cir- 
cumstances present  conclusive  evidence  of  a  fraudulent  in- 
tent, no  proof  of  innocent  motives,  however  strong,  will 
overcome  the  presumption  ;  but  where  the  facts  do  not 
necessarily  prove  fraud,  but  only  tend  to  that  conclusion, 
the  evidence  of  the  party  who  made  the  conveyance,  when 
he  is  so  circumstanced  as  to  be  a  competent  witness,  should 
be  received  for  what  it  may  be  considered  worth. ^  It  is 
believed,  however,  not  to  be  proper  to  allow  a  witness 
to  testify  concerning  the  intent  or  motive  of  another  per- 
son.' 

§206.  Proving  intent. — In  King  v.  Poole  ^  the  court 
said:  "  In  investigating  an  alleged  fraud,  the  relevancy  of 
a  given  fact  does  not  depend  upon  its  force,  but  upon  its 
bearing.  Does  it  bear,  either  directly  or  indirectly,  with 
any  weight  whatever,  on  the  main  controversy  or  any 
material  part  of  it  ?  Not  only  is  fraud  subtle,  but  that  in- 
gredient of  a  transaction  which  renders  it  fraudulent  in 
fact,  namely  intention,  is  covered  up  in  the  breast,  hidden 
away  in  the  heart.  Outward  manifestations  of  it  may  be 
slow  in  appearing,  and  when  they  do  appear,  may  be  dim 
and  indistinct.  To  interpret  their  meaning,  or  the  full 
meaning  of  any  one  of  them,  it  may  be  necessary  to  bring 
them  together  and  contemplate  them  all  in  one  view.     To 


mour  V.  Wilson,  14  N.  Y.  567.     An  ac-  duct  of  another."     Riley  v.  Mayor,  etc. 

cused  person  may  testify  as  to  his  in-  of  N  Y.,  96  N.  Y.  337.     And  it  was 

tention  in  receiving  a  certain   sum  of  said  in  the  case  last  cited  that :  "  Evi- 

money.     People   v.   Baker,   96   N.  Y.  dence  of  a  secret  and  undisclosed  in- 

340.  tent,  entertained  by  one  party  at    the 

'  Seymour  v.  Wilson,  14  N.  Y.  569,  time  of  the  making  of  a  contract,  either 

570  ;  s.  P.  Edwards  v.  Currier,  43  Me.  express  or  implied,  is  not  admissible  to 

474 ;  Forbes  v.  Waller,  25  N.  Y.  430 ;  vary  the    legal    presumptions    arising 

Wheelden  v.  Wilson,  44  Me.  i  ;  Miner  from  the  acts  and  conduct  of  the  par- 

V.  Phillips,  42  111.  123.  ties."     Riley  v.  Mayor,  etc.  of  N.  Y.,  96 

5  See  Hathaway  V.  Brown,  22  Minn.  N.  Y.  339.     See   Talcott  v.  Hess,  31 

216  ;  Peake  v.  Stout,  8  Ala.  647.     "  It  Hun  (N.  Y.)  285. 

is   not   competent   for  one   person   to  '  61     Ga.    374.      See    Kempner    v. 

state  the  motives  influencing  the  con-  Churchill,  8  Wall.  369. 


§   206  PROVING  INTENT.  295 

do  this,  one  has  to  be  picked  up  here,  another  there,  and 
so  on  till  the  collection  is  complete."  ^  Great  latitude  is 
allowed.^  On  an  inquiry  as  to  the  state  of  mind,  senti- 
ments, or  disposition  of  a  person  at  a  particular  period,  his 
declarations  and  conversations  are  admissible.'  In  con- 
cluding this  chapter  we  may  recall  to  the  reader's  attention 
the  rule  that  if  a  transaction  is  entered  into  for  the  purpose 
of  defrauding  any  creditor  it  is  voidable  at  the  suit  of  all 
creditors.* 


»  Burdick  V,  Gill,  7  Fed.  Rep.  668.  Angevine,    15   Blatch.   537;   Baker  v. 

*  Winchester  v.  Charter,  102  Mass.  Kelly,  41  Miss.  703. 

276  ;  Rea  v.  Missouri,  17  Wall,  542.  •*  Allen  v.  Rundle,  50  Conn.  31.    See 

s  I    Greenleat's  Ev.  §  108  ;   Tyler  v.  Warner  v.  Percy,  22  Vt.  155. 


CHAPTER  XV. 


CONSIDERATION. 


§  207.  Concerning    consideration    and 
good  faith. 
Voluntary  conveyances. 

What  is  a  valuable  considera- 
tion } 
Love  and  affection. 
Transfer  for  grantor's  benefit. 

212.  Ante-nuptial    settlement — Mar- 

riage as  consideration. 

213.  Illicit  intercourse. 

214.  Illegal  consideration. 


208 
209 

210. 
211, 


§215.  Moral  obligations. 

216.  Individual     and     copartnership 

debts. 

217.  Future  advances. 

218.  Services  by  members  of  a  family. 

219.  Proof  of  consideration. 

220.  Recitals  of  consideration  as  evi- 

dence. 

221.  Explaining  recitals. 

222.  Sufficient  consideration. 

223.  Insufficient  consideration. 


§  207.  Concerning  consideration  and  good  faith. — Consid- 
eration has  been  said  to  consist  "  either  in  some  right,  in- 
terest, profit,  or  benefit  accruing  to  the  one  party,  or  some 
forbearance,  detriment,  loss,  or  responsibility,  given,  suf- 
fered, or  undertaken  by  the  other."  ^  The  subject  cannot 
be  here  considered  from  an  elementary  point  of  view  in  all 
its  ramifications,  but  its  general  bearing  upon  our  particular 
topic  will  be  briefly  noticed.  It  will  be  found  upon  inves- 
tigation that,  generally  speaking,  the  question  of  considera- 
tion becomes  important  in  the  class  of  litigation  under  dis- 
cussion only  in  bona  fide  transactions.  If  the  alienation  is 
effected  with  a  mutual  design  to  hinder,  delay,  or  defraud 
creditors,  the  presence  of  even  the  most  bounteous  or  ade- 
quate consideration  will  not  save  or  cure  it.^     Thus  a  mort- 


1  Currie  v.  Misa,  L.  R.  10  X.  162. 

5  See  Chap.  XIV.  Billings  v.  Rus- 
sell, loi  N.  Y.  232  ;  Boyd  v.  Turpin, 
94  N.  C.  137.  In  Bradley  v.  Ragsdale, 
64  Ala.  559,  the  court  say  :  "  If  the 
conveyance  be  upon  a  valuable  consid- 


eration, then  the  question  of  intent  be- 
comes prominently  material.  The  con- 
sideration may  be  paid  in  money — may 
be  valuable  and  fully  adequate,  yet  if  it 
was  made  '  with  intent  to  hinder,  delay, 
or   defraud    creditors,   purchasers,   or 


§  207  CONSIDERATION    AND    GOOD    FAITH.  297 

gage  though  given  for  a  just  debt  may  be  assailed  as  fraud- 
ulent.^ Unilateral  evil  intent  will  not,  of  course,  suffice  to 
overturn  the  transaction.^  '' Mala  fides''  s-^ys  Mr.  May, 
"  supersedes  all  inquiry  into  the  consideration,  but  bona  fides 
alone  is  not  always  sufficient  to  support  a  transaction  not 
founded  on  any  valuable  consideration."^  The  inadequacy 
of  the  consideration,  as  is  elsewhere  shown,  is  not  a  matter 
which  the  court  will  go  into,  except  in  so  far  as  it  may 
constitute  evidence  tending  to  show  that  the  transaction 
was  a  sham  ;^  and  the  law  will  not  "  weigh  considerations 
in  diamond  scales."^  Though  grossly  inadequate  consider- 
ation will  render  a  conveyance  fraudulent,*'  the  avoidance 
may  be  only  to  the  extent  of  the  inadequacy.''  Generally 
speaking,  as  we  have  already  seen,  the  question  whether  a 
conveyance  is  fraudulent  or  not  depends  upon  its  being 
made  upon  good  consideration  arid  bona  fide.  It  is  not 
sufficient  that  it  be  upon  good  consideration  or  bojia  fide  ; 
it  must  be  both.^  The  separation  of  these  elements  is  fatal 
to  the  transaction  as  against  creditors.^  This  rule  is  con- 
cisely stated  in  a  recent  case  of  much  importance  in  the 
United  States  Supreme  Court.  "  It  is  not  enough,"  says 
Woods,  J.,  "  in  order  to  support  a  settlement  against  cred- 


other   persons,    of   their   lawful   suits,  '  May   on    Fraud.    Conveyances,   p. 

damages,    forfeitures,    debts,    or    de-  233. 

mands,'  it  is  void,  and  stands  for  noth-  ^  Per  Sir  W.  M.  James  in  Bayspoole 

ing."     Citing   Code   of  1876,  §2124;  v.  Collins,  18  W.  R.  730. 

Planters'  &  M.  Bank  v.  Borland,  5  Ala.  *  Per  Lord  Talbot,  as  quoted  by  Wil- 

531 ;  Cummings  v.  McCullough,  5  Ala.  mot,  C.  J.,  in  Roe  v.  Mitton,  2  Wils. 

324;  Hubbard  v.  Allen,  59  Ala.  283;  358  n. 

Howell  V.  Mitchell,  in  manuscript.  '  Singree   v.  Welch,   32   O.  S.   320. 

'  Billings  V.  Russell,  loi  N.  Y.  233  ;  See  Rooker  v.  Rooker,  29  O.  S.  i. 

Syracuse  Chilled  Plow  Co.  v.  Wing,  85  '  Jamison  v.  McNally.  21  O.  S.  295. 

N.  Y.  421,  426  ;  Schmidt  v.  Opie,  33  See  Black  v.  Kuhlman,  30  O.  S.  196. 

N.  J.  Eq.  141  ;  Blennerhassett  v.  Sher-  "  Sayre  v.  Fredericks,  16  N.  J.  Eq. 

man,  105  U.  S.  117.  209;   Schmidt   v.  Opie,  33  N.  J.  Eq. 

'  Prewit   v.  Wilson,   103   U.  S.  24  ;  141  ;  Billings  v.  Russell,  loi  N.  Y.  232. 

Wood  v.  Stark,  i  Hawaiian  Rep.  10;  citing  the  text. 

Herring  v.  Wickham,  29  Gratt.  (Va.)  '  See  §  i  5. 
628.     See  Chap.  XIV. 


298      -       VOLUNTARY  CONVEYANCES.  §  208 

itors,  that  it  be  made  for  a  valuable  consideration.  It  must 
be  also  bona  fide.  If  it  be  made  with  intent  to  hinder, 
delay,  or  defraud  them,  it  is  void  as  against  them,  although 
there  may  be  in  the  strictest  sense  a  valuable  or  even  an 
adequate  consideration."^  "Forms,"  said  Elliott,  J.,  in  a 
very  recent  case,  "  are  of  little  moment,  for  where  fraud 
appears  courts  will  drive  through  all  matters  of  form  and 
expose  and  punish  the  corrupt  act.  A  conveyance  is  not 
protected,  although  full  consideration  is  paid,  where  grantor 
and  grantee  unite  in  a  fraudulent  design  to  defraud  cred- 
itors."^ 

§  208.  Voluntary  conveyances. — It  is  perhaps  unnecessary 
to  observe  that  a  voluntary  conveyance  "  implies  the  total 
want  of  a  substantial  consideration,"^  or  "  is  a  deed  without 
any  valuable  consideration."  ^  Such  a  transfer  is  more  easily 
susceptible  to  attack  than  a  conveyance  founded  upon  an 
adequate  consideration  ;  for  a  transfer  by  a  debtor  without 
consideration,  made  for  the  purpose  of  defrauding  his  cred- 
itors, can  be  impeached  by  the  creditors  for  fraud,  even 
though  the  grantee  was  ignorant  of  the  fraudulent  purpose 
for  which  the  covinous  conveyance  was  given. ^  The  onus 
of  establishing  a  fraudulent  intent  is  avoided.  In  Lee  v. 
Figg"  the  court  observed  that  whether  the  voluntary  alienee 
participated  in  and  aided  the  covinous  intent  or  not  was 
immaterial ;  "  he  was  not  a  purchaser  in  good  faith."     The 


'  Blennerhassett  v.  Sherman,  105  U.  '  Buck  v.  Voreis,  89  Ind.  117;  Bill- 

S.  117.     See  Twyne's  Case,  3  Rep.  80  ings  v.  Russell,  loi  N,  Y.  226. 

(2  Coke  212)  ;    Holmes  v.  Penney,  3  '  Washband  v.  Washband,  27  Conn. 

Kay  &  J.  90 ;    Gragg  v.   Martin,  12  431. 

Allen  (Mass.)  498 ;  Brady  v.  Briscoe,  *  Seward  v.  Jackson,  8  Cow.  (N.  Y.) 

2  J.  J.  Mar.  (Ky.)  212  ;    Bozman   v.  430. 

Draughan,  3  Stew.  (Ala.)  243  ;  Farm-  ^  Lee  v.  Figg,  37  Cal.  328  ;  Beecher 

ers'  Bank  v.  Douglass,  19  Miss.  469;  v.  Clark,  12  Blatchf.  256  ;  Laughton  v. 

Bunn  V.  Ahl,  29  Pa.  St.  387  ;  Root  v.  Harden,  68  Me.  213  ;  Mohawk  Bank  v. 

Reynolds,   32   Vt.    139  ;    Kempner  v.  At  water,  2  Paige  (N.Y.)  54  ;  Hitchcock 

Churchill,  8  Wall.  362  ;  Kerr  on  Fraud  v.  Kiely,  41  Conn.  611;  Carter  v.  Grim- 

&  Mistake,  p.  200.  shaw,  49  N.  H.  100.     See  Chap.  XIV. 

*  37  Cal.  336. 


§   209  VALUABLE    CONSIDERATION.  299 

distinction  may  be  restated  as  follows  :  A  voluntary  gift  or 
settlement  is  voidable  if  it  was  the  intent  of  the  maker  to 
hinder,  delay,  or  defraud  creditors,  whether  the  party  who 
received  the  gift  participated  in  the  fraudulent  intent  or 
not ;  an  absolute  conveyance  for  a  valual)le  consideration 
is  good,  notwithstanding  the  intent  of  the  maker  to  de- 
fraud, unless  the  other  party  participated  in  the  fraud.^ 
We  have  elsewhere  shown  that,  in  the  majority  of  the  cases, 
a  voluntary  alienation  is  regarded  as  presumptively  fraudu- 
lent as  to  existing  creditors,^  while  in  other  cases  this  pre- 
sumption is  conclusive.^  Where,  however,  a  corporation, 
or  individual,  perfectly  solvent  at  the  time,  and  having  no 
actual  intent  to  defraud  creditors,  disposes  of  lands  or  prop- 
erty for  an  inadequate  consideration,  or  by  a  voluntary  con- 
veyance, subsequent  creditors  of  the  corporation  cannot 
question  the  transaction.*  If,  as  we  have  seen,  it  was  made 
with  the  design  to  defraud  subsequent  creditors,  this  will 
render  it  fraudulent.  It  must  be  remembered,  however, 
that  in  New  York  the  question  of  fraudulent  intent  is  in 
all  cases  to  be  deemed  a  question  of  fact,  and  not  of  law, 
and  it  is  declared  that  no  conveyance  or  charge  shall  be 
adjudged  fraudulent  as  against  creditors  or  purchasers 
solely  on  the  ground  that  it  was  not  founded  on  a  valuable 
consideration.^  It  is  not  per  se  void  even  as  to  existing 
creditors.^ 

§  209.  What  is  a  valuable  consideration  ? — Mucii  has  been 
said  concerning  the  true  import  of  the  expression  "  a  valu- 


'  Lassiter  v.  Davis,  64  N.  C.  498.  '  Babcock  v.  Eckler,  24  N.  Y.  629 ; 

'  Lloyd    V.   Fulton,   91    U.   S.   485 ;  Dunlap    v.    Hawkins,   59   N.   Y.  345  ; 

Holden    v.    Burnham,   63   N.  Y.   74 ;  Dygert   v.    Remerschnider,  32    N,   Y. 

Dunlap   V.    Hawkins,    59   N.   Y,   342  ;  629.     Compare  Coleman    v.   Burr,  93 

Donnebaum  v.  Tinsley,  54  Tex.  365.  N.  Y.  31  ;  Genesee  River  Nat.  Bank  v. 

*  City  Nat.  Bank  v.  Hamilton,  34  N.  Mead,  92  N.  Y.  637  ;  Emmerich  v. 
J.  Eq.  160.  Compare  McCanless  v.  Hefferan,  21  J.  &  S.  (N.  Y.)  loi :  Jack- 
Flinchum,  89  N.  C.  373.  son  v.  Badger,  109  N.  Y.  632. 

*  Graham  v.  Railroad  Company,  102  "  Dygert  v.  Remerschnider,  32  N.  Y. 
U.  S.  148.     See  Chap.  VI.  629. 


300  VALUABLE    CONSIDERATION.  §   2O9 

able  consideration."  Certainly  a  moneyed  consideration 
for  an  assignment  of  goods  greatly  disproportionate  to  the 
value  of  the  property  transferred  would  not  take  a  convey- 
ance out  of  the  statute  against  covinous  alienations.  The 
consideration  must  be  adequate  ;  not  that  the  courts  will 
weigh  the  value  of  the  goods  sold  and  the  price  received, 
in  very  nice  scales,  but  after  considering  all  the  circum- 
stances they  will  hold  that  there  should  be  a  reasonable  and 
fair  proportion  between  the  price  and  the  value.  Cases  in 
which  the  question  of  inadequacy  of  consideration  arises 
between  the  grantor  and  grantee  of  a  deed,  where  suit  is 
instituted  for  the  purpose  of  setting  aside  the  grant  on  the 
ground  of  imposition,  are  not  applicable  in  determining  a 
question  of  the  fairness  of  a  consideration  between  a  vendee 
and  creditor  under  the  statute  concerning  fraudulent  con- 
veyances. Such  inadequacy  of  consideration  as  would  in- 
duce a  court  to  set  aside  a  conveyance  at  the  instance  of 
the  grantor  on  the  ground  of  imposition,  presents  an  en- 
tirely different  question  from  that  degree  of  inadequacy 
which  would  avoid  an  assignment  on  the  ground  of  fraud, 
in  a  suit  instituted  by  a  creditor  or  purchaser  against  the 
alleged  fraudulent  assignee.  A  grantor  must  of  necessity 
make  out  a  stronger  case,  calling  for  the  interference  of  the 
courts,  than  a  creditor,  because  the  latter  is  not  a  partici- 
pant in  the  transaction,  is  guilty  of  no  negligence  or  fraud, 
and  belongs  to  a  favored  class.  Unreasonable  inadequacy 
of  price  is  evidence  of  a  secret  trust,  and  it  is  said  to  be 
prima  facie  evidence  that  a  conveyance  is  not  bona  fide  if 
it  is  accompanied  with  any  trust.^  In  Cook  v.  Tullis^  the 
court  observed  that  "  a  fair  exchange  of  values  may  be 
made  at  any  time,  even  if  one  of  the  parties  to  the  transac- 
tion be  insolvent."" 

It  is  said  in  the  New  York  Court  of  Appeals  that  a 


'  Kuykendall  v.  McDonald,  15  Mo.         '^  18  Wall.  340. 
420.  »  See  Stewart  v.  Piatt,  loi  U.  S.  738. 


§   2IO  LOVE    AND    AFFECTION.  3OI 

valuable  consideration  is  something  mutually  interchanged 
between  the  parties,  and  that  it  is  not  necessary  that  the 
subject-matters  should  be  of  equal  values.^  It  is  also  es- 
tablished that  a  gratuity  cannot  be  subsequently  con- 
verted into  a  debt  so  as  to  become  the  consideration  of  a 
conveyance  made  by  the  grantor  to  the  injury  of  his  cred- 
itors.* 

§  210.  Love  and  affection. — In  Mathews  v.  Feaver  ^  Sir 
Lloyd  Kenyon  said:  "This  is  a  transaction  between  the 
father  and  the  son,  and  natural  love  and  affection  is  men- 
tioned as  part  of  the  consideration,  upon  which,  as  against 
creditors,  I  cannot  rest  at  all.  It  is  true  it  is  a  considera- 
tion which,  though  not  valuable,  is  yet  called  meritorious, 
and  which  in  many  instances  the  court  will  maintain,  but 
not  against  creditors."  Natural  love  and  affection  is  a 
sufficient  consideration  for  a  gift  or  voluntary  transfer  be- 
tween a  brother  and  a  sister,'*  but  as  a  general  rule  a  con- 
veyance for  such  a  consideration  cannot  be  supported 
against  the  rights  of  existing  creditors.^  It  was  said  in 
Hinde's  Lessee  v.  Longworth,*'  and  the  rule  is  still  good, 
that  "  a  deed  from  a  parent  to  a  child,  for  the  consideration 
of  love  and  affection,  is  not  absolutely  void  as  against  cred- 
itors. It  may  be  so  under  certain  circumstances  ;  but  the 
mere  fact  of  being  in  debt  to  a  small  amount  would  not 
make  the  deed  fraudulent,  if  it  could  be  shown  that  the 
grantor  was  in  prosperous  circumstances,  and  unembarras- 
sed, and  that  the  gift  to  the  child  was  a  reasonable  pro- 
vision according  to  his  state  and  condition  in  life,  and  leav- 
ing enough  for  the  payment  of  the  debts  of  the  grantor." 
The  same  principle  appertains  generally  to  conveyances 
founded  upon  such  consideration.'^ 

'  Dygert  v.  Remerschnider,  32  N.  Y.  '  Moreland  v.  Atchison,  34  Tex.  351. 

642.  **  1 1  Wheat.  213. 

'^  Clay  V.  McCally,  4  Woods  605.  '  Good  and  valuable  consideration. — 

^  I  Cox  Eq.  Cas.  278,  280.  Judge   Stor)-   observes,    i   Story's  Eq. 

*  Arderson  V.  Dunn,  19  Ark.  658.  Jur.  §354:  "A  good  consideration  is 


302  TRANSFER    FOR    GRANTOR's    BENEFIT.       §§2  11,212 

§  211.  Transfer  for  grantor's  benefit. — As  was  observed 
by  Peck,  J.,  in  Stanley  v.  Robbins,^  one  cannot  transfer 
his  property  "  in  consideration  of  an  obligation  for  support 
for  life,  or  perhaps  for  support  for  any  considerable  length 
of  time,  unless  he  retains  so  much  as  is  necessary  to  satisfy 
existing  debis."^  In  Crane  v.  Stickles^  the  court  said :  "  It 
seems,  that  one  week  before  the  plaintiff's  note  fell  due, 
they  i.ook  a  sweeping  sale  of  all  the  property  of  which  the 
defendant  was  possessed,  real  and  personal,  and  obligated 
themselves  that  they  would  support  her  for  the  same,  as  the 
only  consideration,  paying  nothing  and  agreeing  to  pay 
nothing,  only  by  way  of  support — and  leaving  nothing  for 
the  payment  of  debts.  Now  if  the  law  would  tolerate  a 
proceeding  like  this,  any  person,  having  the  means,  may  make 
ample  provision  for  himself  and  family  during  life,  at  the 
expense  of  his  creditors.     But  that  would  not  be  permitted." 

§  212.  Ante-nuptial  settlement — Marriage  as  consideration. 
— An   ante-nuplial   settlement,  though    made   by  the    in- 


sometimes  used  in  the  sense  of  a  con-  tice.  2  Black.  Com.  297  ;  i  Fonbl.  Eq. 
sideration  which  is  valid  in  point  of  B.  i,  c.  4,  §  12,  note.  Deeds  made 
law;  and  then  it  includes  a  meritorious  upon  a  good  consideration  only,  are 
as  well  as  a  valuable  consideration,  considered  as  merely  voluntarj' ;  those 
Hodgson  V.  Butts,  3  Cranch  140 ;  Copis  made  upon  a  valuable  consideration  are 
V.  Middleto  ■ ,  2  Madd.  430  ;  Twyne's  treated  as  compensatory.  The  words 
Case,  3  Rep.  8 1  (2  Coke  212);  Taylor  'good  consideration'  in  the  statute, 
V.  Jones,  2  Atk.  601 ;  Newland  on  Con-  may  be  properly  construed  to  include 
tracts,  c.  23,  p.  386  ;  Partridge  v.  Gopp,  both  descriptions  ;  for  it  cannot  be 
Ambler  598,  599;  s.  C.  i  Eden  167,  doubted  that  it  meant  to  protect  con- 
168;  Atherley  on  Mar.  Sett.  c.  13,  pp.  veyances  made  bona  fide  and  for  a 
191,  192.  But  it  is  more  frequently  valuable  consideration,  as  well  as  those 
used  in  a  sense  contradistinguished  made  bona  fide  upon  the  consideration 
from  valuable  ;  and  then  it  imports  a  of  blood  or  affection.  Doe  v.  Rout- 
consideration  of  blood  or  natural  affec-  ledge,  Cowp.  708,  710,  711.  712  ;  Copis 
tion,  as  when  a  man  grants  an  estate  v.  Middleton,  2  Madd.  430 ;  Hodgson 
to  a  near  relation,  merely  founded  upon  v.  Butts,  3  Cranch  140 ;  Twyne's  Case, 
motives  of  generosity,  prudence,  and  3  Rep.  81  (2  Coke  212)." 
natural  duty.     A   valuable  considera-  '  36  Vt.  432. 

tion  is  such  as  money,  marriage,  or  the  -  See  Crane  v.  Stickles,  15  Vt.  252  ; 

like  which  the  law  esteems  as  an  equiv-  Briggs  v.  Beach,  18  Vt.  115;   Wood- 

alent   given    for  the   grant,   and  it  is  ward  v.  Wyman,  53  Vt.  647. 

therefore  founded  upon  motives  of  jus-  '  15  Vt.  257. 


§212  ANTE-NUPTIAL    SETTLEMENT. 


303 


tended  husband  with  the  design  of  defrauding  his  credit- 
ors, will  not  be  set  aside  in  the  absence  of  the  clearest 
proof  of  the  wife's  participation  in  the  fraud.*  In  Magniac 
V.  Thompson  the  court  said  :  "  Nothing  can  be  clearer, 
both  upon  principle  and  authority,  than  the  doctrine  that 
to  make  an  ante-nuptial  settlement  void,  as  a  fraud  upon 
creditors,  it  is  necessary  that  both  parties  should  concur  in, 
or  have  cognizance  of,  the  intended  fraud.  If  the  settler 
alone  intended  a  fraud,  and  the  other  party  have  no  notice 
of  it,  but  is  innocent  of  it,  she  is  not  and  cannot  be  affected 
by  it.  Marriage,  in  contemplation  of  the  law,  is  not  only 
a  valuable  consideration  to  support  such  a  settlement,  but 
is  a  consideration  of  the  highest  value,  and  from  motives 
of  the  soundest  policy  is  upheld  with  a  steady  resolution."^ 
The  courts  are  averse  to  annulling  such  a  settlement,  be- 
cause there  can  follow  no  dissolution  of  the  marriage  which 
was  the  consideration  for  it.^  The  marriage  subsists  in  full 
force  even  though  one  of  the  parties  should  forever  be 
rendered  incapable  of  performing  his  or  her  part  of  the 
marital  contract.^ 

Marriage  is  not  only  a  valuable  consideration,  but,  as 
Coke  says,  there  is  no  other  consideration  so  much  re- 
spected in  the  law.^  The  wife  is  deemed  to  be  a  pur- 
chaser of  the  property  settled  upon  her  in  consideration  of 
the  marriage,  and  she  is  entitled  to  hold  it  against  all  claim- 
ants.^    In  Sterry  v.  Arden  ''  Chancellor    Kent    observed  : 

'  Prewit  V.  Wilson,    103  U.  S.  22.  Wickham,  29  Gratt.  (Va.)  62S  ;    An- 

See  §  199.  drews  v.  Jones,  10  Ala.  400. 

'7    Pet.    348,    393;    approved    and  ^Herring    v.    Wickham,    29   Gratt. 

adopted  in  Prewit  v.  Wilson,  103  U.  S.  (Va.)  635. 

22,  24;  Frank's  Appeal,  59  Pa.  St.  194 ;  "'  See  Bishop's  Law  of  Married  Wotn- 

Wright  V.  Wright,    59  Barb.  (N.  Y.)  en,  775,  776  ;  Magniac  v.  Thompson, 

505,   affi'd    54   N.   Y.  437  ;  Comer   v.  7  Peters  348. 

Allen,  72  Ga.  12.  '"'  Herring   v.    Wickham,    29    Gratt. 

»  Prewit  V.   Wilson,    103  U.   S.  22  ;  (Va.)  628. 

Barrow  v.  Barrow,  2  Dick.  504  ;  Nairn  '  i    Johns.    Ch.    (N.    Y.)    260-271  ; 

V.  Prowse,   6  Ves.  752;    Campion   v.  affirmed  Verplank  v.  Sterry,  12  Johns. 

Cotton,  17  Ves.  264;  Sterry  v.  Arden,  (N.  Y.)  536. 
1  Johns.  Ch.  (N.  Y.)  261  ;  Herring  v. 


304  ANTE-NUPTIAL    SETTLEMENT.  §  212 

"  The  marriage  was  a  valuable  consideration,  which  fixed 
the  interest  in  the  grantee  against  all  the  world  ;  she  is  re- 
garded from  that  time  as  a  purchaser,  and  as  much  so  as  if 
she  had  then  paid  an  adequate  pecuniary  consideration. 
....  It  is  the  constant  language  of  the  books,  and  of  the 
courts,  that  a  voluntary  deed  is  made  good  by  a  subsequent 
marriage,  and  a  marriage  has  always  been  held  to  be  the 
highest  consideration  in  law."  ^  It  is  unnecessary  to  dilate 
upon  this  branch  of  the  subject.  Where  the  wife  partici- 
pated in  the  fraudulent  intent  and  scheme  the  transaction 
may  of  course  be  annulled.^  The  difficulties  of  implicating 
the  wife  in  the  fraudulent  scheme  are  from  the  very  nature 
of  things  often  insuperable.  Our  meaning  is  illustrated  by 
the  language  of  Mr.  Justice  Field  in  a  recent  case  which 
we  have  frequently  cited  :  "  It  is  not  at  all  likely,  judging 
from  the  ordinary  motives  governing  men,  that,  whilst 
pressing  his  suit  with  her,  and  ofTering  to  settle  property 
upon  her  to  obtain  her  consent  to  the  marriage,  he  informed 
her  that  he  was  insolvent,  and  would,  by  the  deed  he  pro- 
posed to  execute,  defraud  his  creditors.  If  he  intended  to 
commit  the  fraud  imputed  to  him,  it  is  unreasonable  to 
suppose  that  he  would,  by  unfolding  his  scheme,  expose 
his  true  character  to  one  whose  good  opinion  he  was  at  that 
time  anxious  to  secure.  If  capable  of  the  fraud  charged, 
he  was  capable  of  deceiving  Mrs.  Prewit  as  to  his  pecuniary 
condition.  She  states  in  her  answer  that  she  knew  he  was 
embarrassed  and  in  debt,  but  to  what  extent,  or  to  whom, 
she  did  not  know,  and  that  it  was  because  of  the  knowl- 
edge that  he  w^as  embarrassed  that  she  insisted  upon  his 
making  a  settlement  upon  her."  ^  This  is  perhaps  an  ex- 
treme  case,  but   it   illustrates   the   statement   already  ad- 


'  Jones'   Appeal,   62    Pa.    St.    324 ;  '  Ex  parte  McBurnie,  i  De  G.,  M. 

Armfield    v.    Armfield,     Freem.    Ch,  &  G.  441  ;  Fraser  v.  Thompson,  4  De 

(Miss.)  311  ;  Smith  v.  Allen,  5  Allen  G.  &  J.  659. 

(Mass.)  454  ;  Andrews  v.  Jones,  10  Ala.  ^  Prewit  v.  Wilson,  103  U.  S.  23. 
400 ;  Barrow  v,  Barrow,  2  Dick.  504. 


§2  13  ILLICIT    INTERCOURSE.  3O5 

vanced,  that  the  creditor  will  be  forced  to  travel  a  thorny 
pathway  to  annul  an  ante-nuptial  settlement.  It  is  some- 
times urged  that  the  courts  should  not  encourage  a  prac- 
tice the  result  of  which  is,  so  to  speak,  to  allow  a  man  to 
barter  for  a  wife  for  a  pecuniary  consideration.^  This  is 
scarcely  a  fair  view  of  the  transaction.  By  marriage  the 
woman  assumes  new  duties  and  responsibilities ;  forsakes 
a  home  to  which  the  marriage  will  ordinarily  unfit  her  to 
return  ;  promises  to  live  with  her  husband,  and  to  bear  her 
share  of  the  burdens  and  cares  of  the  family.  Surely  in 
assuming  these  responsibilities  she  is  entitled  to  guard 
against  poverty  and  distress. 

§  213.  Illicit  intercourse. — A  contract  the  consideration  of 
which  is  future  illicit  cohabitation  is  said  to  be  utterly 
void.'^  But  a  conveyance  in  consideration  of  past  cohabi- 
tation, intended  or  regarded  as  reparation  or  indemnity  for 
the  wrong  done,  is  treated  at  common  law  as  founded  on  a 
good  consideration,  and  may  be  upheld.^  A  transfer,  how- 
ever, to  a  mistress  or  her  children,  by  way  of  gift  or  ad- 
vancement, although  not  looking  to  future  cohabitation, 
and  intended  merely  as  a  provision  for  maintenance,  is  in- 
valid as  against  existing  creditors.*  This  distinction  is 
manifestly  important.  In  Wait  v.  Day'^  the  court  said, 
that  although  the  debtor  "  may  have  been  under  no  legal 
liability  to  the  defendant,  yet  if  he  paid  the  money  in  dis- 
charge of  what  he  deemed  a  moral  obligation  to  indemnify 
the  defendant  against  the  consequences  which  iiad  already 
resulted  from  their  illicit  intercourse,  I  think  the  case  would 
not  be  within  the  statute.      He  had  made  her  the  mother 


1  "  There  is  certainly  something  very        '  Potter  v.  Gracie,  58  Ala.  305  ;  Jack- 
repulsive  in  the  idea  of  a  parent  bar-     son  v.  Miner,  loi  III.  559. 
tering  off  an  amiable  and  accomplished         '  Ibid. 

daughter  for  lands  and  negroes,  as  he        '  Potter  v.  Gracie,  58  Ala.  305. 
would  sell  a  lamb  for  the  shambles."        »  4  I^en.  (N.  Y.)  439,  444. 
Davidson  v.  Graves,  Riley's  (S.  C.)  Eq. 
236. 

20 


306  ILLEGAL    CONSIDERATION.  §  21 4 

of  two  illegitimate  children,  and  was  at  liberty  to  refund 
the  money  which  she  had  already  expended  for  the  neces- 
sary support  and  education  of  those  children.  Where  there 
is  an  existing  obligation,  either  legal  or  moral,  to  pay  so 
much  money,  and  the  payment  is  not  made  with  any  refer- 
ence to  the  future,  nor  by  way  of  mere  gratuity,  the  case  is 
not  within  the  mischief  against  which  the  legislature  in- 
tended to  provide."  The  same  principle  was  applied  in 
Fellows  V.  Emperor.^  In  that  case  the  grantee  had  been 
deceived  into  a  marriage  with  the  grantor,  and  had  inno- 
cently lived  with  him  for  years,  supposing  she  was  his  law- 
ful wife.  It  subsequently  transpired  that  he  had  another 
wife  living,  whereupon  she  left  him.  The  court,  in  sus- 
taining the  conveyance,  held  that  the  grantor  was  under 
the  strongest  moral,  if  not  legal  obligation,  to  compensate 
the  grantee  for  her  services,  arid  to  indemnify  her  as  far  as 
he  could  in  a  pecuniary  point  of  view,  against  the  conse- 
quences of  his  fraudulent  and  illegal  acts.  The  conveyance 
was  upheld  against  creditors.^ 

§  214.  Illegal  consideration. — One  who  has  freely  paid  his 
money  upon  an  illegal  contract  is  particeps  crimmis,  and 
no  cause  of  action  arises  in  his  favor  upon  an  implied 
promise  to  repay  it.  But  when  an  insolvent  debtor,  or  one 
in  embarrassed  circumstances,  pays  his  money  upon  such 
illegal  consideration,  he  stands,  in  relation  to  his  creditors, 
in  the  same  position  as  if  he  had  made  a  voluntary  convey- 
ance of  his  property.  In  contemplation  of  law  he  has  in 
ifact  parted  with  his  money  for  no  consideration,^  because 


'  13  Barb.  (N.  Y.)  97.  also  Leighton   v.  Orr,  44  Iowa  679  ; 

"^  Improper  influences. — Conveyances  Dean  v.  Negley,  41  Pa.  St.  312;  Kes- 

made  by  a  dissolute  man  to  a  prosti-  singer  v.  Kessinger,  37  Ind.  341.     See 

tute,  who  had  a  strong  influence  over  §  13  and  note  on  "Undue  Influence," 

him,  may   be   annulled.     Shipman   v.  giving  the  substance  of  the  opinion  in 

Furniss,  69  Ala.  555,  and  cases  cited  ;  Shipman  v.  Furniss,  69  Ala.  555. 

S.  C.  44  Am.  Rep.  528,  and  the  learned  ^  i  Story's  Eq.  §§  353,  354;  Clark  v. 

note  of  Irving  Browne,  Esq.,  at  p.  537  ;  Gibson,  12  N.  H.  386. 


§§   215,   2l6  COPARTNERSHIP    DEBTS.  3O7 

it  is  no  consideration  which  can  be  set  up  in  a  court  of 
law.^ 

§  215.  Moral  obligations. — A  debtor  may  acknowledge 
and  prefer  a  claim  barred  by  the  statute  of  limitations,  and 
such  conduct  is  not  conclusive  evidence  of  a  want  of  good 
faith  ;^  and  he  is  not  bound  to  set  up  the  statute  of  frauds  ;' 
and  an  agreement  by  a  husband  to  convey  certain  lands  to 
his  wife  in  consideration  of  her  relinquishing  an  inchoate 
interest  in  his  lands,  which  she  carried  out.  is  founded  upon 
a  valid  consideration  which  the  husband  had  a  right  to  dis- 
charge.* So  it  is  not  absolutely  necessary  to  the  bo)ia  fides 
of  a  charge  of  interest  in  an  account,  that  it  should  be  of 
such  a  character  that  it  might  be  recovered  in  a  suit  at  law 
brought  by  a  creditor  against  his  debtor.  There  are  many 
dealings  amongst  men  in  which  interest  is  habitually 
charged  and  paid,  when  it  could  not  be  claimed  on  the 
ground  of  strict  legal  right.  These  transactions  are  re- 
garded as  fair  and  just  as  between  the  parties,  and  they 
cannot  be  considered  fraudulent  as  to  others.^ 

§216.  Individual  and  copartnership  debts.  —  One  partner, 
it  is  asserted,  cannot  usually  make  a  valid  transfer  of  firm 
property  in  payment  of  his  individual  debt  without  the 
consent  of  his  copartner.^  It  is  said  that  every  one  is 
bound  to  know  that  a  partner  has  no  right  to  appropriate 
the  partnership  property  to  the  payment  of  his  individual 
debts,  and  if  one  so  deals  with  him  he  must  run  the  risk  of 
the  interposition  of  partnership  rights.'  This  broad  propo- 
sition is  disputed    in   Schmidlapp  v.   Currie.^     Tlic  court 


'  Weeks  v.  Hill,  38  N.  H.  205.     See  But  compare  Collinson  v.  Jackson,  S 

infra.  Void  and  Voidable  Acts.  Sawyer  357. 

'French  v.    Motley,   63    Me.    326;         ■*  Spencer  v.  Ayrault,  10  N.  V.  205. 
Keen  v.  Kleckner,  42  Pa.  St.  529.  '  Hartley  v.  White.  94   Pa.   St.  36  ; 

»  Cresswell  v.  McCaig,  11  Neb.  227  ;  Todd  v.  Lorah,  75  Pa.  St.  155.   But  see 

Cahill    V.   Bigelow,    18   Pick.   (Mass.)  Crook  v.  Rindskopf.  105  N.  V.  482. 
369.  •'  Todd  V.  Lorah,  75  Pa.  St.  156. 

*  Brown  v.  Rawlings,  72   Ind.   505.        '  55  Miss.  600.     See  Crook  v.  Rinds- 
kopf, 105  N.  Y.  4S2. 


308  COPARTNERSHIP    DEBTS.  §   2l6 

said  :  "The  firm  creditors  at  large  of  a  partnership  have  no 
lien  on  its  assets,  any  more  than  ordinary  creditors  have 
upon  the  property  of  an  individual  debtor.  The  power  of 
disposition  over  their  property,  inherent  in  every  partner- 
ship, is  as  unlimited  as  that  of  an  individual,  and  the  jus 
disponendi  in  the  firm,  all  the  members  co-operating,  can 
only  be  controlled  by  the  same  considerations  that  impose 
a  limit  upon  the  acts  of  an  individual  owner,  namely,  that 
it  shall  not  be  used  for  fraudulent  purposes.  So  long  as 
the  firm  exists,  therefore,  its  members  must  be  at  liberty  to 
do  as  they  choose  with  their  own,  and  even  in  the  act  of 
dissolution  they  may  impress  upon  its  assets  such  character 
as  they  please.  The  doctrine  that  firm  assets  must  first  be 
applied  to  the  payment  of  firm  debts,  and  individual  prop- 
erty to  individual  debts,  is  only  a  principle  of  administra- 
tion adopted  by  the  courts,  where  from  any  cause  they  are 
called  upon  to  wind  up  the  firm  business,  and  find  that  the 
members  have  made  no  valid  disposition  of,  or  charges 
upon,  its  assets."^  A  transfer  by  one  of  the  partners,  or  a 
lien  created  by  him  on  the  corpus  of  the  partnership  prop- 
erty to  pay  an  individual  debt  has  been  in  effect  declared  in 
New  York  to  be  fraudulent  and  void  as  to  the  creditors  of 
the  firm,  unless  the  firm  was  solvent  at  the  time.^  But 
Chief-Justice  Ruger  said  in  Crook  v.  Rindskopf  :^  "It  is 
lawful  for  an  insolvent  member  of  a  firm,  to  devote  his  in- 
dividual property  to  the  payment  of  firm  debts,  to  the  ex- 
clusion of  his  individual  creditors."'*  The  authorities  as  to 
what  dispositions  of  individual  or  of  copartnership  assets 
will  be  upheld  as  against  the  respective  classes  of  creditors 


'  See    Roach   v.  Brannon,  57    Miss.  Shanks  v.  Klein,  104  U.  S.  18;   Crook 

490.    Distinguished  in  Goodbar  V.  Gary,  v.  Rindskopf,  105  N.  Y.  482. 

4  Woods  668.  3 105  N.  Y.  482. 

-  Menagh  v.  Whitwell,  52  N.  Y.  146;  •*  Citing  Dimon  v.  Hazard,  32  N.  Y. 

Goodbar  v.  Gary,  4  Woods  668.     See  65  ;  Saunders  v.  Reilly,  105  N.  Y.  12  ; 

Wilson  V.  Robertson,   21    N.  Y.  587;  Royer  Wheel  Co.  v.  Fielding,  loi  N. 

Keith   V.  Fink,  47  111.  272.     Compare  Y.  504;  Kirby  v.  Schoonmaker,  3  Barb. 

Case   V.    Beauregard,   99   U.    S.    119;  Ch.  (N.  Y.)  46. 


§§  2  17,  2l8         FUTURE  ADVANCES.  3O9 

are  not  in  very  satisfactory  shape.  It  seems  perfectly  clear, 
however,  that  where  the  courts  get  possession  of  the  funds 
for  distribution,  the  distinction  between  the  rights  of  the 
tvv^o  classes  of  creditors  will  be  respected  and  preserved. 

§  217.  Future  advances. — A  judgment  or  mortgage  may 
be  taken  and  held  as  security  for  future  advances  and  re- 
sponsibilities to  the  extent  of  the  security,  when  that  forms 
a  part  of  the  original  agreement  between  the  parties.^  "  It 
is  frequent,"  says  Chief-Justice  Marshall,  "  for  a  person 
who  expects  to  become  more  considerably  indei)ted,  to 
mortgage  property  to  his  creditor,  as  a  security  for  debts 
to  be  contracted,  as  well  as  for  that  which  is  already  due."* 
But  in  order  to  secure  good  faith  and  prevent  error  and 
imposition  in  dealing,  it  is  necessary  that  the  agreement,  as 
contained  in  the  record  of  the  lien,  whether  by  mortgage 
or  judgment,  should  give  all  the  requisite  information  as 
to  the  extent  and  character  of  the  contract.^ 

§  218.  Services  by  members  of  a  family, —  In  the  absence 
of  an  express  agreement  the  law  will  not  imply  a  promise 
to  pay  a  daughter  for  services  rendered  in  the  debtor's 
family,*  and  a  mortgage  given  to  a  daughter  under  such 
circumstances,  will  be  held  to  be  without  consideration, 
and  fraudulent  as  against  creditors.*^  A  conveyance  by  an 
insolvent  husband  to  his  wife,  in  pursuance  of  a  contract 
to  compensate  her  for  services  in  taking  care  of  his  aged 
mother,  who  resided  with  him,  has  been  held  in  New  York 
to  be  invalid  and  voidable  as  against  creditors.     The  Court 


»  Truscott  V.  King,  6  N.  Y.  1 57,  and  *  MiHer  v.  Sauerbier,  30  N.  J.  Eq.  74  ; 

cases  cited  ;  Robinson  v,  Williams,  22  Irish  v.  Bradford,  64  Iowa  303. 

N.  Y.  380.      See  Ackerman  v.   Hun-  '  Gardner's    Admr.  v.   Schooley.  25 

sicker,  85  N.  Y.  50.  N.  J.  Eq.  150.     See  Ridgway  v.  Eng- 

«  United  States    v.  Hooe,  3  Cranch  Hsh.  22    N.  J.  Law  409 ;    Updike   v. 

89.     See  Lawrence  v.  Tucker,  23  How.  Titus,  13  N.  J.  Eq.  1 51 ;  Coley  v.  Coley, 

14;  Leeds  V.  Cameron.  3  Sumner  492,  14  N.  J.    Eq.   350;    Updike    v.    Ten 

per  Story,  J.;    Conard  v.  Atlantic   Ins,  Broeck,  32  N.  J.  Law  105;  I'rickctt  v. 

Co.,  I  Pet.  448,  Prickett,  20  N.  J.  Eq.  478. 

^  Hart  V.  Chalker,  14  Conn.  77. 


3IO  PROOF    OF    CONSIDERATION.  §219 

of  Appeals  of  that  State  decided  that  the  wife,  by  render- 
ing service  to  her  husband's  mother,  was  simply  perform- 
ing a  marital  duty  which  she  owed  to  her  husband  ;  that 
where  she  received  no  payment  for  the  discharge  of  this 
duty  from  the  person  to  whom  the  service  was  ren- 
dered, and  was  entitled  to  none,  and  brought  no  money  or 
property  to  the  husband  by  her  service,  she  could  not 
stipulate  for  compensation.^  Earl,  J.,  said  :  "  It  would 
operate  disastrously  upon  domestic  life,  and  breed  discord 
and  mischief  if  the  wife  could  contract  with  her  husband 
for  the  payment  of  services  to  be  rendered  for  him  in  his 
home  ;  if  she  could  exact  compensation  for  services,  dis- 
agreeable or  otherwise,  rendered  to  members  of  his  family  ; 
if  she  could  sue  him  upon  such  contracts,  and  establish 
them  upon  the  disputed  and  conflicting  testimony  of  the 
members  of  the  household.  To  allow  such  contracts  would 
degrade  the  wife  by  making  her  a  menial  and  a  servant  in 
tne  home  where  she  should  discharge  marital  duties  in  lov- 
ing and  devoted  ministrations,  and  frauds  upon  creditors 
would  be  greatly  facilitated,  as  the  wife  could  frequently 
absorb  all  her  husband's  property  in  the  payment  of  her 
services,  rendered  under  such  secret,  unknown  contracts."^ 

§  219.  Proof  of  consideration. — In  Hanford  v.  Artcher,-^ 
in  speaking  of  the  presumption  of  fraud  arising  from  a 
failure  to  change  possession,  the  court  said  that,  to  rebut 
this  presumption,  the  statute  imposed  upon  the  party  claim- 
ing under  a  sale  or  a  mortgage,  the  burden  of  proving 
good  faith  and  an  absence  of  any  intent  to  defraud  cred- 
itors. "  Proof  of  a  valuable  consideration,"  said  Senator 
Hopkins,  "  or  an  honest  debt,  is  essential  to  show  good 
faith  ;    and,  if  there  be  no  such  proof,  I   take   it   that  the 


'  Coleman  v.  Burr,  93  N.  Y.  17,  25  ;  Y.  344;  Birkbeck  v.  Ackroyd,  74  N.  Y. 

S.  C.  17  Weekly  Dig.  (N.  Y.)  233.  Com-  356;  Reynolds  v.  Robinson,  64  N.Y.589. 

pare  Filer  v.  N.  Y.  Central  R.R.  Co.,  ^  See  Grant  v.  Green,  41   Iowa  88; 

49  N.  Y.  47  ;  Whitaker  v.  Whitaker,  52  Dovvell  v.  Applegate,  8  Sawyer  427. 

N.  Y.  368  ;  Brooks  v.  Schwerin,  54  N.  ^  4  Hill  (N.  Y.)  295. 


^§   2  20,   221  EXPLAINING    RECITALS.  3 II 

requirement  of  the  statute  in  this  respect  is  not  complied 

with,   and    that    the    court   may    order    a    nonsuit 

Such  proof  of  consideration,  too,  must  go  beyond  a  mere 
paper  acknowledgment  of  it,  that  might  be  binding  be- 
tween the  paities."  It  is  said  by  Chief-Justice  Elliott,  in 
Rose  V.  Colter,^  that  "if  it  be  shown  that  a  valuable  con- 
sideration was  paid  for  the  property,  and  that  when  the 
sale  was  made  the  seller  was  possessed  of  property  far  more 
than  sufficient  to  pay  all  his  debts,  the  presumption  arising 
from  the  retention  of  possession  is  plainly  overcome."  As 
we  have  already  said,  there  ought  to  be  a  fair  and  reason- 
able consideration  corresponding  to  the  value  of  the  article 
sold.=^ 

§  220.  Recitals  of  consideration  as  evidence. — It  is  said  in 
Hubbard  v.  Allen, ^  that  when  a  controversy  arises  between 
the  grantee  and  an  existing  creditor  as  to  the  validity  of  a 
conveyance,  it  is  a  settled  rule  to  regard  the  recital  of  a 
consideration  as  a  mere  declaration  or  admission  of  the 
grantor,  and  not  as  evidence  against  the  creditor.^ 

§  221.  Explaining  recitals. — A  conveyance  of  land  made 
by  a  husband  to  his  wife  purported  to  be  executed  in  con- 
sideration of  love  and  affection,  "  and  for  the  sum  of  one 
dollar  cash  in  hand  paid,  the  receipt  whereof  is  hereby 
acknowledged,"  The  court  held  that,  the  money  consider- 
ation being-  manifestly  nominal,  parol  evidence  was  inad- 
missible, in  an  action  brought  to  set  aside  the  deed  as  in 
fraud  of  creditors,  to  show  that  there  was  in  fact  an  ade- 
quate pecuniary  consideration.^  But,  in  another  case,  where 
the  consideration  expressed  in  the  deed  was  "  five  hundred 


'  76  Ind.  593.  Ala.  137  ;   McCaskle   v.  Amarine,  12 

^  State   V.  Evans,  38    Mo.    150-154.  Ala.  17;  Falkner  v.  Leith,  15  Ala.  9; 

See  §  209.  Dolin   v.  Gardner,  15  Ala.  758.     See 

^  59  Ala.  296.  Kimball  v.  Fenner,  12  N.  H.  248. 

■•  Citing   McCain   v.   Wood,  4   Ala.  '  Houston  v.  Blackman,  66  Ala.  559, 

258;  Branch  Bank  of  Decatur  v.  Kin-  564;  Galbreath  v.  Cook,  30  Ark.  417, 

sey,  5  Ala.  9 ;  McGintry  v.  Reeves,  10  See  Potter  v.  Gracie,  58  Ala.  308. 


312  EXPLAINING    RECITALS.  §   221 

dollars  and  other  good  causes  and  considerations,"  it  was 
held  competent  to  prove  the  consideration  of  blood. -^  This 
general  subject  is  referred  to  in  Hinde's  Lessee  v.  Long- 
worth,^  where  it  was  said,  that  if  the  evidence  had  been 
offered  for  the  purpose  of  showing  that  the  deed  was  given 
for  a  valuable  consideration,  and  in  satisfaction  of  a  debt, 
and  not  for  the  consideration  of  love  and  affection  as  ex- 
pressed in  the  deed,  it  might  well  be  considered  as  contra- 
dicting the  deed.  It  would  then  be  substituting  -aivaluable 
for  a  good  consideration,  and  a  violation  of  the  well-settled 
rule  of  law%  that  parol  evidence  is  inadmissible  to  annul  or 
substantially  vary  a  written  agreement.^  The  subject  was 
further  considered  in  Betts  v.  Union  Bank  of  Maryland,'* 
a  case  argued  by  Reverdy  Johnson  on  one  side,  and  by 
Roger  B.  Taney,  afterward  Chief -Justice  of  the  United 
States,  on  the  other,  and  the  conclusion  of  the  court  was 
that  marriage  cannot  be  o-iven  in  evidence  as  the  consider- 
ation  of  a  deed  of  bargain  and  sale  expressed  to  be  made 
for  a  money  consideration  only.^  A  mortgage,  the  ex- 
pressed consideration  for  which  was  $i,ooo,  may  be  ex- 
plained by  showing  that  it  was  in  fact  given  to  secure  the 
mortgagee  against  liability  on  two  accommodation  notes  of 
$500  each.^  The  recital  that  the  consideration  has  been 
paid  may  generally  be  contradicted  by  parol  evidence  \'^  and 


'  Pomeroy  V.  Bailey,  43  N.  H.  118.  shown    that   the  consideration   was  a 
'^  II  Wheat.  214.  moneyed  one.     This  would  be  proving 
2  See  Cunningham  v.  Dwyer,  23  Md.  by  parol   that   the   consideration  was 
219.  different  m  kzttd  from  that  expressed 
*  I  Harr.  &  G.  (Md.)  175.  in  the  deed,  and  upon  well-considered 
5  Galbreath   v.  Cook,   30  Ark.  425  ;  authority,  is  not  allowable." 
Davidson   v.  Jones,   26  Miss.  63.     In  "  McKinster  v.  Babcock,  26  N.  Y. 
Scoggin  V.  Schloath,  15  Ore.  383,  the  378.     See  Truscott  v.  King,  6  N.  Y. 
court  said  :  "  The  better  rule  appears  147  ;  Lawrence  v.  Tucker,  23  How.  14. 
to  be  that  if  the  consideration  expressed  'Bingham   v.  Weiderwax,   i  N.  Y. 
in  the  deed  is  natural  love  and  affec-  514;  Baker  v.  Connell,  i  Daly  (N.  Y.) 
tion,  it  cannot  be  shown  to  have  been  470;    Altringer   v.   Capeheart,  68  Mo. 
executed  for  a  valuable  consideration;  441;    Miller  v.  McCoy,   50  Mo.  214; 
or  if  voluntary,  or  on  consideration  of  Rhine  v.  Ellen,  36  Cal.  362,  370;  San- 
marriage   and  the  like,  it  cannot  be  ford  v.  Sanford,  61  Barb.  (N.  Y.)  302 ; 


§§   2  2  2,   2  23  SUFFICIENT    CONSIDERATION.  3I3 

indeed  there  seems  to  be  a  prevalent  tendency  in  the  courts 
to  admit  parol  proof  of  the  true  consideration  of  a  deed  in 
almost  every  case,  though  the  fight  is  kept  up  to  exclude 
evidence  of  consideration  different  in  kind  from  that  set 
forth  in  the  instrument.  Manifestly  the  recitals  are  not 
binding  upon  creditors  in  any  event. 

§222.  Sufficient  consideration. — A  bond  given  by  a  minor 
son  to  his  father  in  consideration  of  permission  to  leave 
home  and  work  for  himself,  or  for  his  board  while  he  re- 
mains at  home  and  works  on  his  own  account,  if  bona  fide, 
is  neither  against  the  policy  of  the  law  nor  fraudulent  as  to 
creditors.^  And  where  a  wife  advances  to  her  husband 
money  to  purchase  land,  under  an  agreement  that  the 
money  shall  be  repaid  to  her  children  and  its  payment 
secured  by  mortgage,  the  contract  is  valid  and  may  be  set 
up  as  a  defense  to  a  suit  charging  the  husband  with  mort- 
gaging the  lands  to  his  children  in  fraud  of  creditors.^ 

§  223.  Insufficient  consideration. — A  deed  from  a  debtor 
to  his  creditor  is  voluntary  and  not  founded  on  a  sufficient 
consideration  if  it  is  given  for  a  pre-existing  debt  which 
was  afterward  treated  by  the  parties  as  still  due.^  And,  as 
against  creditors  of  an  insolvent,  a  party  cannot  make  title 
to  his  property  as  a  purchaser  for  a  valuable  consideration, 
where  what  purports  to  be  the  consideration  is  a  debt 
against  a  third  person  which  is  found  as  matter  of  fact  to 
be  worthless  ;  and  this  is  true  even  though  the  transaction 
was  in  good  faith  on  the  part  of  the  vendee.* 


Arnot  V.  Erie  Railway  Co.,  67  N.  Y.  Adams  v.  Hull,  2  Denio  (N.  V.)  306  ; 

321;  Baker  V.  Union  Mutual  Life  Ins.  Miller  v.    jMcKenzie,  95    N.    Y.    578: 

Co.,  43  N.  Y.  287  ;  Harper  v.  Perry,  28  Scogs^in  v.  Schloath,  15  Ore.  383. 

Iowa  63;  Lawton  v.  Buckingham,  15  '  Geist  v.  Geist,  2  Pa.  St.  441. 

Iowa  22;  Pierce  v.  Brew,  43  Vt.  295;  -  Goff,  Assignee,  v.  Rogers,  71  Ind, 

Anthony  v.  Harrison,   14  Hun  (N.  Y.)  459. 

2rC);    Morris   v,    Tillson,    81   Tli.  616;  'Oliver  v.  Moore,  23  Ohio  .St.  479  ; 

Taggart  v.  Stanbery,  2  McLean  54.6;  Starr  v.  Starr,  i  Ohio  321. 

Wheeler    v.    Billings,  38    N.  Y.    264;  ^  Sevmour  v.  Wilson,  19  N.  Y.  417. 


CHAPTER   XVI. 


INDICIA    OR    BADGES    OF    FRAUD. 


!  224.  The  creditor's  embarrassments 
— rProof  of  fraud. 

225.  Badges  of  fraud  defined. 

226.  Question  for  the  jury. 

227.  Circumstantial  and   direct   evi- 

dence. 

228.  Recital   of  fictitious   considera- 

tion. 

229.  Antedating  instrument. 

230.  Description  of  the  property. 

231.  Conveyance  of  whole  estate. 

232.  Inadequacy  of  purchase  price. 

233.  Transfer  pending  suit. 

234.  Evidence  of  secrecy. 


§  235.  Suppression    or   concealment — 
Subsequent  fraud. 

236.  Evidence  aliunde. 

237.  Concealment  in  fraud  of  bank- 

rupt act. 

238.  Absolute  conveyance  by  way  of 

security. 

239.  Insolvency. 

240.  Sales  upon  credit. 

241.  Unusual  acts  and  transactions. 

242.  Effect  of  relationship  upon  debt- 

or's transactions. 

243.  /*r/;«^/i2«V  cases  of  fraud. 

244.  Comments. 


§  224.  The  creditor's  embarrassments — Proof  of  fraud. — 
The  practical  difficulties  which  a  creditor  encounters  in 
seeking  to  discover  equitable  assets,  or  to  reach  property 
fraudulently  alienated  by  the  debtor,  have  already  been  the 
subject  of  comment.^  A  transaction  or  conveyance  having 
every  appearance  of  fairness  and  legality,  and  to  which  the 
ordinary  presumptions  of  good  faith  attach,^  is  usually  pre- 
sented at  the  threshold  of  the  litigation.  The  debtor,  and 
the  fraudulent  alienees  acting  in  collusion  with  him,  will  be 
found,  in  most  instances,  to  have  taken  every  precaution 
to  hide  the  evidences  and  traces  of  their  frauds,^  and,  ordi- 
narily, the  guilty  participants  develop  into  witnesses  pro- 
lific of  plausible  statements  and  ingenious  subterfuges  de- 
vised to  uphold  the  colorable  transactions.  An  intent  to 
defraud  is  not  published  to  the  world,  but,  on  the  contrary. 


'  See  §§  5,  6,  13. 
=  See  §  6. 


3  Cowling  V.  Estes,  1 5  Bradw.  (111.) 
j6i. 


§  224  creditor's  embarrassments.  315 

the  usual  course  of  the  participants  is  to  give  to  the  con- 
tract the  appearance  of  an  honest  transaction,  and  to  have 
the  conduct  of  the  interested  parties  correspond,  as  far  as 
possible,  with  a  bona  fide  act.^  Parties  practicing  fraud 
almost  uniformly  resort  to  expedients  to  conceal  the  evi- 
dence of  it.^  Fraud  always  takes  a  tortuous  course,  and 
endeavors  to  cover  and  conceal  its  tracks.^  Lord  Mans- 
field said  :.  "  Hardly  any  deed  is  fraudulent  upon  the  mere 
face  of  it."*  Chief-Justice  Bricknell  observed  :  "  Where  a 
fraud  is  contemplated  and  committed  upon  creditors,  con 
cealment  of  it  is  the  first,  and  generally  the  most  persistent, 
effort  of  those  who  are  engaged  in  it.  Publicity  would 
render  their  acts  vain  and  useless.  Leaving  direct  and 
positive  evidence  accessible  to  those  injured  by  it  would 
be  the  equivalent  of  a  confession  of  the  culpable  intent, 
and  of  the  defeasible  character  of  the  transaction.  There 
are  numerous  circumstances,  so  frequently  attending  sales, 
conveyances,  and  transfers  intended  to  hinder,  delay,  and 
defraud  creditors,  that  they  are  known  and  denominated 
badges  of  fraud.  They  do  not  constitute — are  not  ele- 
ments of  fraud,  but  merely  circumstances  from  which  it 
may  be  inferred."^ 

The  question  presents  itself,  how  can  a  creditor  most 
effectually  thwart  the  deep-laid  schemes  of  the  debtor  and 
his  fraudulent  alienees,  and  overcome  the  usual  jircsump- 
tions  of  honesty  and  good  faith  which  the  parties  will  in- 
voke ?  No  witness  can  look  into  the  minds  of  the  parties 
and  thus  be  able  to  swear  positively  that  they  intended  to 
defraud  the  creditors  of  the  vendor  ;  and,  hence,  as  we 
have  already  shown  in  this  discussion,*'  fraud  can  generally 


'  Tognini  V.  Kyle,  15  Nev.  468.  MVorseley   v.    De    Mattos,    i    Burr. 

"■  Sarle  v.  Arnold.  7  R.  I.  585  ;  Cowl-     467.  484. 
ing  V.  Estes,  15  Bradw.  (111.)  261.  '  Thames  v.  Rembert,  63  Ala.  567  ; 

3  Marshall   v.    Green,   24  Ark.  418.     Weaver  v.  Owens,  16  Ore.  304;  Hick- 
See  §  13.  man  v.  Trout,  83  V'a.  491. 

'  See  §  13. 


o 


1 6  PROOF    OF    FRAUD.  §  224 


be  established  only  by  facts  and  circumstances  which  tend 
directly  or  indirectly  to  indicate  its  existence.^  Experience 
shows  that  positive  proof  of  fraudulent  acts  is  not  gener- 
ally to  be  expected,  and  for  that  reason,  among  others,  the 
law  allows  a  resort  to  circumstances  as  the  means  of  ascer- 
taining the  truth. '^  "A  deduction  of  fraud,"  says  Kent, 
"  may  be  made  not  only  from  deceptive  assertions  and 
false  representations,  but  from  facts,  incidents,  and  circum- 
stances which  may  be  trivial  in  themselves,  but  decisive 
evidence  in  the  given  case  of  a  fraudulent  design."  ^  "  Cir- 
cumstances altogether  inconclusive,"  says  Clifford,  J.,^  "  if 
separately  considered,  may,  by  their  number  and  joint  oper- 
ation, especially  when  corroborated  by  moral  coincidences, 
be  sufficient  to  constitute  conclusive  proof."  Or  they  may 
be  "a  link  in  a  chain,  which,  altogether,  is  very  strong."^ 
Wills  says:*^  "Although  neither  the  combined  effect  of 
the  evidence,  nor  any  of  its  constituent  elements,  admits  of 
numerical  computation,  it  is  indubitable,  that  the  proving 
power  increases  with  the  number  of  the  independent  cir- 
cumstances and  witnesses,  according  to  a  geometrical  pro- 
gression. '  Such  evidence,'  in  the  words  of  Dr.  Reid,  '  may 
be  compared  to  a  rope  made  up  of  many  slender  filaments 
twisted  together.  The  rope  has  strength  more  than  suffi- 
cient to  bear  the  stress  laid  upon  it,  though  no  one  of  the 
filaments  of  which  it  is  composed  would  be  sufficient  for 
that  purpose.'  "  '''  It  can  seldom  be  the  duty  of  the  court  to 
instruct  the  jury  that  a  single  fact  will  warrant  the  jury  in 
finding  fraud.  All  the  facts  surrounding  the  transaction 
must  be  taken  into  account  collectively.^  The  judgment 
must  be  based  "  upon  all  the  circumstances  of  the  particular 


'  Thomas  v.  Sullivan,  13  Nev.  249;  ^  Engraham  v.  Pate,  51  Ga.  537. 

Wheelden  v.  Wilson,  44  Me.  18.  "  Wills   on  Circumstantial     Ev.,    p. 

*  Castle   V.    Bullard,    23    How.    172,  273. 

187;  Goshorn  v.  Snodgrass,  17  W.  Va.  ■>  Citing  Reid's  Essay  on  the  Intel- 

717.  lectual  Powers,  Chap.  III. 

^  2  Kent's  Com.,  p.  484.  "Sleeper    v.    Chapman,    121    Mass. 

■*  Castle  V.  Bullard,  23  How.  187.  404-409. 


§  225  BADGES  OF  FRAUD.  317 

case."^  The  frequency  with  which  fraud  is  practiced  upon 
creditors ;  the  difficulties  of  its  detection  ;  the  powerful 
motives  which  tempt  an  insolvent  debtor  to  commit  it;^ 
the  plausible  casuistry  by  means  of  which  it  is  sometimes 
reconciled  to  the  consciences  even  of  persons  whose  pre- 
vious lives  have  been  without  reproach  ;  these  are  the  con- 
siderations which  prevent  the  court  from  classinjr  it  among 
the  grossly  improbable  violations  of  moral  dutv  ;  and  there- 
fore judges  often  presume  it  from  facts  which  may  seem 
slight.^  "  Fraud,"  says  the  Supreme  Court  of  Iowa.  "  can- 
not always  be  shown  by  direct  evidence,  but  is  usually 
proved  by  circumstances.  Neither  can  the  knowledge  of 
or  participation  in  fraudulent  designs  and  transactions  be 
proved  in  many  cases  except  by  circumstances."'*  The 
very  charge  of  fraud  "  implies  color  and  disguise,  to  be 
dissipated  by  indicia  alone."  ^  The  signs  or  earmarks 
of  fraud  instanced  in  Twyne's  Case*^  have  already  been 
given,'''  and  should  be  kept  fresh  in  the  memory  of  parties 
interested  in  this  class  of  litigation.  Mr.  Roberts  says,  that 
the  general  conclusion  to  be  derived  from  this  remarkable 
case  is  "  that  evidence  of  the  fraudulent  intent  supersedes 
the  whole  inquiry  into  the  consideration,  for  no  merit  in 
any  of  the  parties  to  a  transaction  can  save  it  if  it  carries 
intrinsically  or  extrinsically  the  plain  characters  of  fraud."** 
It  may  be  observed  that  extrinsic  proof  of  fraud  can  rarely 
be  found  unless  it  be  in  cases  where  the  possession  of  the 
debtor  contradicts  "  the  visible  purport  of  an  absolute  con- 
veyance." 

§  225.    Badges  of  fraud  defined.  —  The    possible    indicia 
of  fraud  are  so  numerous  that  no  court  could  i)rctcn(l  to 


'  Wait  V.  Bull's  Head  Bank.  19  N.  (N.  Y.)  353,  362,  per  Coueii,  J.  ;  King 

B.  R.  501.  V.  Moon,  42  Mo.  555. 

>  See  §  2.  "3  Rep.  80. 

*  Goshorn  v.Sno(lgrass,i7  W.Va.767.  '  See  §  22. 

'  Craig  V.  Fowler,  59  Iowa  203.  "  Roberts    on    Fraudulent    Convcy- 

'  Waterbury  v.  Sturtevant,  18  Wend,  ances,  546. 


n 


(t. 


0.(^.0]  f^ 


BADGES    OF    FRAUD. 


§   225 


anticipate  and  catalogue  thcm.^  "  They  are  as  infinite  in 
number  and  form  as  are  the  resources  and  versatihty  of 
human  artifice."^  The  statutes  of  Elizabeth  produce  the 
most  beneficial  effects,  by  placing  parties  under  a  disability 
to  commit  fraud  in  requiring  for  the  characteristics  of  an 
honest  act  such  circumstances  as  none  but  an  honest  inten- 
tion can  assume.^  A  badge  of  fraud  was  said  by  Chief- 
Justice  Pearson,  in  Peebles  v.  Horton,*to  be  "a  fact  calcu- 
lated to  throw  suspicion  on  the  transaction,"  and  which 
"calls  for  explanation."^  Substantially  the  same  language 
is  used  by  Elliott,  J.,  in  Sherman  v.  Hogland.^  So  in  Pil- 
ling V.  Otis,"^  the  court  in  construing  the  meaning  of  the 
expression  "  badge  of  fraud "  as  used  in  the  charge  of  a 
judge,  said:  "It  does  not  mean  that  the  evidence  must  be 
conclusive,  nor  that  it  must  require  the  jury  to  find  fraud, 
but  only  that  it  is  one  of  the  signs  or  marks  of  fraud,  and 
has  a  tendency  to  show  it.     There  may  be  great  difference 


1  Phinizy  v.  Clark,  62  Ga.  623-627 ; 
Hickman  v.  Trout,  83  Va,  491. 

"^  Shealy  v.  Edwards,  75  Ala.  411, 
417. 

3  McKibbin  v.  Martin,  64  Pa.  St.  356; 
Avery  v.  Street,  6  Watts  (Pa.)  274. 

■*  64  N.  C.  376  ;  Shealy  v.  Edwards, 
75  Ala.  417;  Terrell  v.  Green,  11  Ala. 
213;  Hickman  v.  Trout,  83  Va.  491. 

*  In  Hickman  v.  Trout,  83  Va.  491, 
the  court  say  :  "  Certain  circumstances 
are  often  referred  to  as  indicia  of 
fraud,  because  they  are  usually  found 
in  cases  where  fraud  exists.  Even  a 
single  one  of  them  may  be  sufficient 
to  stamp  the  transaction  as  fraudu- 
lent. When  several  are  found  in  the 
same  transaction,  strong  and  clear 
evidence  will  be  required  of  the  up- 
holder of  the  transaction  to  repel  the 
conclusion  of  fraudulent  intent.  In  the 
case  here,  ....  quite  a  number  of  the 
usual  badges  of  fraud  are  found  grouped 
together  and  left  unexplained.  These 
are :   gross    inadequacy   of  price ;    no 


security  taken  for  the  purchase-money; 
unusual  length  of  credit  for  the  deferred 
instalments  ;  bonds  taken  payable  at 
long  periods,  when  the  pretence  is  that 
the  deferred  instalments  evidenced  by 
them  had  already  been  satisfied  in  the 
main  by  antecedent  debts  due  by  the 
obligee  to  the  obligor;  the  conveyance 
made  in  payment  of  alleged  indebted- 
ness of  father  to  son,  residing  together 
as  members  of  one  family  ;  the  indebt- 
edness and  insolvency  of  the  grantor, 
and  well  known  to  the  grantee ;  the 
threats  and  pendency  of  suits ;  the 
secrecy  and  concealment  of  the  trans- 
action ;  keeping  the  deed  unacknowl- 
edged and  unrecorded  for  over  a  year  ; 
grantor  remaining  in  possession  as  be- 
fore the  conveyance,  and  cautioning  the 
kinsman  justice,  who  took  the  acknowl- 
edgment, to  keep  the  matter  private, 
and  the  relation  between  grantor  and 
grantee." 

« 73  Ind.  473. 

^  13  Wis.  495. 


a 


^\JL^ 


§   226  QUESTION    FOR    THE    JURY.  3I9 

in  the  weight  to  which  different  facts,  constituting  badges 
of  fraud,  are  entitled  as  evidence.  One  may  be  almost 
conclusive,  another  furnish  merely  a  reasonable  inference 
of  fraud.  Yet  both  would  be  badges  of  fraud,  and  either 
might  be  so  explained  by  other  evidence  as  to  destroy  its 
effect.  The  books  accordingly  speak  of  strong  badges  and 
slight  badges  of  fraud,  of  conclusive  badges,  and  badges 
not  conclusive,  meaning  by  the  word  '  badge'  nothing  more 
than  that  the  fact  relied  on  has  a  tendencv  to  show  fraud, 
but  leaving  its  greater  or  less  effect  to  depend  on  its  intrinsic 
character."  The  expression  is  used  "  to  distinguish  the 
lighter  grounds  on  which  fraud  may  be  established  "  as  dis- 
tinguished from  the  cases  where  the  fraud  is  apparent  upon 
the  face  of  the  instrument  and  necessarily  involves  its 
invalidity.^  The  circumstances  which  the  law  considers 
badges  of  fraud,  and  not  fraud  per  se,  should,  as  we  shall 
see,  be  submitted  to  the  jury,  so  that  they  may  draw  their 
own  conclusions.'^  Where,  then,  a  creditor  shows  indicia, 
or  badges  of  fraud,  the  burden  rests  on  the  grantee  to  repel 
the  presumptions  which  the  facts  so  shown  generate.^  It 
may  here  be  observed  that  when  the  consideration  for  the 
transfer  is  clearly  established,  and  the  transaction  is  in  effect 
a  preference,  it  will  not  be  affected  by  any  weak,  foolish, 
or  even  criminal  conduct  in  the  way  of  an  attempt  to  sus- 
tain the  case  by  manufactured  evidence."* 

§  226.  Question  for  the  jury. — The  question  of  fraud  in  a 
transfer  must  usually  be  submitted  to  a  jury,^  save  in  a  few 
cases  where  the  transaction  is  manifestly  fraudulent  upon 
its  face.  The  distinction  between  legal  and  equitable  juris- 
diction as  to  this  has  already  been  pointed  out ; ''  and  where 
the  suit  is  in  its  nature  purely  equitable,  the  judge  or  clian- 


'  Burrill   on   Assignments,   4th    ed.,  ■»  Hill  v.  Bowman,  35  Mich.  191,  per 

§  346,  p.  518.  Cooiey,  C.  J. 

*  King  V.  Russell,  40  Tex.  133.  'Weaver  v.  Owens,  16  Ore.  304. 

*  Harrell  v.  Mitchell,  6i  Ala.  270.  *  See  §  51. 


p9  Ct  cif  ^.  1^ 

320  CIRCUMSTANTIAL    EVIDENCE.  §§   227,  228 

ccllor  is  responsible  for  the  decision,  though,  of.  course,  he 
may  secure  the  aid  of  a  jury  to  pass  upon  framed  issues.^ 
Otherwise  the  jury  must  be  permitted  to  consider  and  draw 
their  own  inferences  from  badges  of  fraud,  and  the  court 
should  not  interfere  to  formulate  conclusions  for  them.^ 
To  say  that  badges  of  fraud  "  constitute  fraud  in  them- 
selves, would  be  to  carry  the  doctrine  beyond  the  limits  of 
reason  or  authority,  and  to  shut  out  the  light  of  wisdom 
and  truth."  ^  Where  the  entire  suit  is  tried  by  and  sub- 
mitted to  the  court,  without  the  aid  of  a  jury,  as  is  fre- 
quently the  case  in  equity,  the  same  consideration  and 
effect  should  be  given  by  the  court  to  badges  of  fraud  as 
though  a  jury  had  been  summoned. 

§  227.  Circumstantial  and  direct  evidence.  —  In  Kempner 
V.  Churchill^  it  appeared  that  the  purchaser  said  to  the 
debtor  :  "  You  had  better  not  delay  this  matter.  You  had 
better  let  me  have  the  goods  and  put  the  money  in  your 
pocket,  and  let  the  creditors  go  to  the  devil."  The  cir- 
cumstantial evidence  which  was  held  ample  to  confirm  this 
direct  evidence  of  fraud,  was  as  follow^s  :  First,  false  re- 
ceipts given  for  full  value  on  Saturday ;  second,  account  of 
stock  made  out  on  Sunday  ;  third,  removal  of  the  goods  into 
a  cellar  on  Monday.  "  It  is  true  the  fraud  must  be  in  the 
inception  of  the  transaction,  but  the  subsequent  acts  of  the 
parties  are  calculated  to  explain  the  motives  which  actuated 
them  in  the  beginning,  and  give  tone  to  the  then  original 
purpose."^ 

g  228.  Recital  of  fictitious  consideration. — Let  us  now  pro- 
ceed to  consider  more  minutely  the  particular  circum- 
stances and  surroundino^s  of  a  transaction  which  constitute 


'  Dunphyv.  Kleinsmith,  II  Wall.  615.         °  Adler  v.  Apt,  31  Minn.  348,   350 

Leasure   v,   Coburn,   57   Ind.  274;  See  Hungerford  v.  Earle,  2  Vem.  261 

Herkelrath   v.    Stookey,   63    111.    486 ;  Blennerhassett  v.  Sherman,  105  U.  S 

King-  V.  Russell,  40  Tex.  133.  100;  Blackman  v.  Preston,  24  111.  App 

^  Wilson  V.  Lott,  5  Fla.  316.  240;    Coates   v.    Gerlach,   44    Pa.   St 

*  8  Wall.  369.  43. 


fho.d^'L 


§  228 


FICTITIOUS    CONSIDERATION. 


321 


badges  of  fraud,  or  awaken  suspicions  or  create  presump- 
tions of  the  existence  of  fraud. 

A  false  statement  of  the  consideration  of  a  mortgage,^  or 
of  a  conveyance  or  transfer,-  or  the  creation  of  a  fictitious 
indebtedness,^  is  a  badge  of  fraud,  and  is  a  proper  clement 
for  the  consideration  of  the  jury  in  determining  the  dona 
fides  of  the  transaction.^  Such  a  recital  does  not  usually 
render  the  instrument  void  per  se^  and  in  some  instances 
the  transaction  will  be  allowed  to  stand  for  the  amount  of 
the  consideration  given,*^  and  will  be  void  onlv  for  the  ex- 
cess.'^  So  the  issuing  of  an  execution  for  an  excessive 
amount  will,  in  the  absence  of  bad  faith,  avail  the  plaintiff 
to  the  extent  of  the  debt  remaining  due.^  It  may  be  ob- 
served here  that  the  recital  of  the  excessive  consideration 
must  be  intentional,  and  not  the  result  of  a  mere  mistake 
in  computation,^  and  both  parties  must  have  participated 


'  United  States  v.  Griswold,  7  Saw- 
yer 306  ;  Stinson  v.  Hawkins,  16  Fed. 
Rep.  850;  Lynde  v.  McGregor,  13  Al- 
len (Mass.)  179;  McKinster  v.  Bab- 
cock,  26  N.  Y.  382  ;  Weeden  v.  Hawes, 
10  Conn.  50  ;  Butts  v.  Peacock,  23  Wis. 
359  ;  Blakeslee  v.  Rossman,  43  Wis. 
123  ;  Stover  v.  Herrington,  7  Ala.  142  ; 
Goff  V.  Rogers,  71  Ind.  459;  Cordes  v. 
Straszer,  8  Mo.  App.  61  ;  Venable  v. 
Bank  of  U.  S.,  2  Pet.  112,  per  Story,  J.; 
King  V.  Hubbell,  42  Mich.  599,  per 
Cooley,  J.  See  Keith  v.  Proctor,  8 
Baxt.  (Tenn.)  189  ;  Shirras  v.  Caig,  7 
Cranch  50. 

^  Peebles  v.  Horton,  64  N.  C.  374; 
Enders  v.  Swayne,  8  Dana  (Ky.)  105  ; 
Thompson  v.  Drake,  3  B.  Mon.  (Ky.) 
570;  Foster  v.  Woodfin,  11  Ired.  (N. 
C.)  Law  346  ;  Gibbs  v.  Thompson,  7 
Humph.  (Tenn.)  179;  Turbevilie  v. 
Gibson,  5  Heisk.  (Tenn.)  565 ;  Mar- 
riott V.  Givens,  8  Ala.  694 ;  Divver  v. 
McLaughlin,  2  Wend.  (N.  Y.)  600. 

*  Winchester  v.Charter,  97  Mass. 140. 
21 


^  Miller  v.  Lockwood,  32  N.  Y.  299  ; 
Willison  V.  Desenberg,  41  Mich,  156; 
Lawson  v.  Alabama  Warehouse  Co., 
80  Ala.  343.  Elliott,  J.,  said,  in  GoflF 
V.  Rogers,  71  Ind. 461  :  "There  are  no 
cases,  however,  that  we  have  been  able 
to  find,  going  so  far  as  to  hold  that  a 
mortgage  is  to  be  conclusively  pre- 
sumed fraudulent  from  tiie  bare  fact 
that  it  purports,  on  its  face,  to  secure  a 
sum  in  excess  of  the  debt  really  due. 
The  farthest  that  any  of  the  cases  go, 
except  those  based  on  an  express  stat- 
ute, is  to  hold  that  the  fact  that  a  mort- 
gage expresses  on  its  face  an  amount 
materially  greater  than  the  true  amount 
of  indebtedness,  is  a  badge  of  fraud." 

5  Frost  V.  Warren,  42  N.  Y.  207  ; 
Barkow  v.  Sanger,  47  Wis.  505. 

''  Colcy  V.  Coley,  14  N.  J.  Eq.  354. 

''  Davenport  v.  Wright,  51  I'a.  St. 
292.     See  §§  192.  195. 

"  Harris  v.  Alcock.  10  G.  &  J.  (Md.) 
227. 

'  Kalk  V.  Fielding,  50  Wis.  340. 


iac( 


322  FICTITIOUS    CONSIDERATION.  §   228 

in  the  fraudulent  purpose.^  Hence,  where  a  wife  is  igno- 
rant and  innocent  of  fraud,  the  insertion  of  an  inaccurate 
or  untrue  recital  in  a  settlement  will  not  vitiate  it.'^  An 
immaterial  misrecital  will  not  be  regarded.^ 

It  is  not  our  purpose,  however,  to  lead  the  reader  to  con- 
sider an  exaggerated  or  false  recital  of  consideration  as  an 
unimportant  factor  in  proving  fraud.  Far  from  it.  In 
Hav/kins  v^  Alston,'*  Chief-Justice  Ruffin  forcibly  said  : 
"  No  device  can  be  more  deceptive  and  more  likely  to 
baffle,  delay,  or  defeat  creditors,  than  the  creating  incum- 
brances upon  their  property  by  embarrassed  men,  for  debts 
that  are  fictitious  or  mainly  so.  The  false  pretence  of  a 
debt,  or  the  designed  exaggeration  of  one,  is  an  act  of  di- 
rect fraud."  Mr.  May  observed,  that  the  fact  that  confes- 
sion of  judgment  "  covers  more  property  than  is  necessary 
for  satisfying  the  debt,  is  a  suspicious  circumstance."^ 
Sharswood,  J.,  declared  that  "a  judgment  confessed  volun- 
tarily by  an  insolvent  or  indebted  man  for  more  than  is  due, 
\s prima  facie  fraudulent  within  the  statute  of  13  Eliz.  c.  5."^ 
Then  in  Warwick  v.  Petty'''  it  is  asserted  that  a  judgment 
laid  upon  property  of  a  debtor  for  more  than  was  actually 
due  and  owing,  is  a  clear  violation  of  the  policy  of  the  law, 
and  is  fraudulent,  and  subject  to  attack  by  junior  credit- 
ors.^ The  judgment,  however,  must  be  knowingly,  inten- 
tionally, and  fraudulently  obtained  for  a  greater  sum  than 
was  due,^     A  transaction  which  on  its  face  speaks  an  en- 


^  Carpenter  v.  Muren,  42  Barb.  (^N.  ^  Clark  v.  Douglass,  62  Pa.  St.  415. 

Y.)  300.     See  §  199.  ■"  44  N.  J.  Law  542. 

^  Kevan  v.  Crawford,  L.  R.  6  Ch.  D.  *  Clapp   v.  Ely,  27   N.  J.  Law  555. 

39.  Compare  Sayre  v.  Hewes,  32  N.  J.  Eq. 

3  Fetter  v.  Cirode,  4  B.Mon.(Ky.)484-  652  ;  Hoag  v.  Sayre,  33  N.  J.  Eq.  552  ; 

■1  4  Ired.  Eq.  (N.  C.)  145.  Holt  v.   Creamer,  34   N.  J.  Eq.  187  ; 

'  May's  Fraud.  Conv.  p.  88  ;  citing  Russell  v.  Winne,  37  N.  Y.  596. 
Tolputt  V.  Wells,  I  M.  &  S.  395  ;  Ben-  "Fairfield  v.  Baldwin,  12  Pick, 
ton  V.  ThornhiU,  7  Taunt.  149;  S.  C.  2  (Mass.)  388;  Davenport  v.  Wright,  51 
Marsh.  427 ;  Hodgson  v.  Newman,  Pa.  St.  292.  Compare  Peirce  v.  Par- 
mentioned  in  Holbird  v,  Anderson,  5  tridge,  3  Met.  (Mass.)  44 ;  Felton  v, 
T.  R.  236,  239.  Wadsworth,  7  Cush.  (Mass.)  589. 


§§   229,   230  ANTEDATING    INSTRUMENT.  2) -3 

tirely  different  language  from  the  real  one,  will  always  be 
"viewed  by  the  law  with  the  highest  degree  of  distrust  and 
disapprobation,"^  and  will  be  "the  object  of  doubt  and  sus- 
picion,"^ though,  as  we  have  seen,  suspicion  alone  is  insuffi- 
cient to  establish  fraud. ^ 

It  results,  then,  from  a  review  of  the  authorities,  that  a 
false  recital  of  consideration  in  an  instrument,  in  the  ab- 
sence of  explanation,  justifies  a  finding  of  fraud  ;  that  the 
misrecital  must  be  intentional  and  not  accidental,  and  is 
subject  to  explanation  ;  and  that  the  evil  design  must  be 
mutual ;  otherwise  the  transaction  will  stand  against  credit- 
ors except  as  to  the  excess. 

§229.  Antedating  instrument. — Antedating  an  instrument 
seems  to  be  regarded  as  an  ijidicium  of  fraud,*  and  testi- 
mony tending  to  establish  a  fraudulent  antedating  of  a 
paper  is  competent.^  Antedating  a  mortgage,  though  very 
improper,  does  not,  however,  affect  a  mortgagee  who  is  not 
privy  to  it.^  It  may  be  remarked  that  the  date  of  a  deed 
is  not  generally  regarded  as  an  essential  part  of  the  instru- 
ment ;  it  may  be  good  with  an  impossible  date,  or  have  no 
date,  and  though  the  date  is  prima  facie  evidence  of  the 
time  of  delivery,  it  may  be  contradicted. 

§  230.  Description  of  the  property. — A  suspicion  or  in- 
ference of  fraud  is  sometimes  predicated  of  a  loose  and 
vague  description  of  the  goods  or  property  conveyed. 
"  All  the  entire  stock  of  goods  in  the  possession  of  the 
said  Lee,  in  his  store  in  the  city  of  Williamsburg,"  were 
the  words  used  in  Lang  v.  Lee,^  and  in  commenting  upon 
the  case  the  court  said  :  "  Does  this  look  like  a  real  bona 
fide   transaction?"     A  clause   in    a    mortgage   by   which 


1  Ayres  V.  Husted,  15  Conn.  513.  521.    But  compare  Patterson  v.  Bodcn- 

2  Pickett  V.  Pipkin,  64  Ala.  526.  hamer,  9  Ired.  (N.  C.)  Law  96. 

'  See  §§  5,  6.  '  Moog  v.  Benedicks,  49  Ala.  513. 

^  Wright  V.  Hencock,  3  Munf.  (Va.)         «  Lindle  v.  Neville,  13  S.&  R. (Pa.)  228. 

^  3  Rand.  (Va.)  423. 


^^o,d 


s^ 


324  CONVEYANCE    OF    WHOLE    ESTATE.  §   23 1 

after-acquired  property  was  attempted  to  be  covered,  was 
regarded  as  a  feature  for  the  consideration  of  the  jury  in 
Gardner  v.  McEwen.'  So  in  a  case  in  Tennessee,^  in 
which  the  description  in  the  conveyance  was  so  indefinite 
and  general  that  it  was  impossible  to  designate  the  prop- 
.  erty,  this  was  considered  a  circumstance  to  be  taken  into 
account  by  the  jury  as  an  evidence  of  fraud.^  Still  it  does 
not  follow  by  any  means  that  an  imperfect  description  of 
property  in  an  instrument  is  of  much  weight  as  a  badge  of 
fraud.  Carelessness  in  the  character  of  the  description  in 
conveyances  of  realty,  or  in  bills  of  sale,  or  mortgages  of 
personalty,  is  very  common  in  transactions  concerning  the 
good  faith  of  which  no  question  can  fairly  be  raised.  Mis- 
descriptions are  often  the  handiwork  of  honest  but  blunder- 
ing scriveners. 

§  231.  Conveyance  of  whole  estate. — Lowell,  J.,  observes  : 
"  I  have  often  decided  that  the  conveyance  of  the  whole 
property  of  a  debtor  affords  a  very  violent  presumption  of 
a  fraudulent  intent,  so  far  as  existing  creditors  are  con- 
cerned." ^  In  Bigelow  v.  Doolittle,^  however,  the  court 
refused  to  charge  that  "the  conveyance  of  the  whole  prop- 
erty of  a  debtor  affords  a  very  violent  presumption  of  a 
fraudulent  intent,  so  far  as  existing  creditors  are  con- 
cerned." In  sustaining  the  ruling  the  appellate  court  ob- 
served that  the  generality  of  the  conveyance  was  merely  a 
circumstance  to  be  considered  by  the  jury  in  connection 
with  all  the  other  facts  of  the  case,  in  determining  whether 
'•or  not  the  sale  was  fraudulent.     Lyon,  J.,  said:  "Under 


'  19  N.  Y.  125.  V.  Fredericks,  16  N.  J.  Eq.  207  ;   Clark 

'  Overton   v.   Holinshade,    5  Heisk.  v.  Wise,  39  How.  Pr.  (N.  Y.)  97 ;  re- 

(Tenn.)  683,  versed,  46  N.  Y.  612  ;  Monell  v.  Scher- 

'  See  §  157.  rick,  54  III.  270  ;  Redfield  v.  Buck,  35 

* /«  re  Alexander,  4  N.  B.  R.  181  Conn.  328;  Bradley  v.  Buford,  Sneed 

[*46].     See  Goshorn  v.  Snodgrass,  17  (Ky.)  12. 

W.  Va,  717;  Glenn  v.  Glenn,  17  Iowa  ^  36  Wis.  119.     See  Bishop  v.  Steb- 

498-501  ;  Hartshorn  v.  Eames,  31  Me.  bins,  41  Hun  (N.  Y.)  246. 

99 ;  Sarle  v.  Arnold,  7  R.  I.  582  ;  Sayre 


§   231  CONVEYANCE    OF    WHOLE    ESTATE.  325 

some  conditions  the  jury  miglit  regard  such  conveyance 
as  raising  a  very  violent  presumption  of  fraud,  while  under 
other  and  different  conditions  the  jury  might  properly  de- 
termine that  it  was  but  a  slight  indication  of  a  fraudulent 
intent."  ^  Such  a  transfer  must,  however,  be  regarded  as 
altogether  unusual  and  extraordinary.  The  instances  in 
which  such  transactions  would  occur  in  the  usual  course 
of  business  are  very  infrequent,  and  when  the  alienation 
proceeds  from  an  embarrassed  debtor,  it  creates  a  presump- 
tion of  dishonesty  and  fraud. ^  The  transfer,  however,  is 
not  to  be  declared  void  as  matter  of  law  under  such  cir- 
cumstances. Hence,  a  sale  by  an  insolvent  debtor  of  all 
his  real  and  personal  estate,  taking  back  notes  payable  in 
six,  twelve,  and  eighteen  months,  is  not  per  se  fraudulent ; 
to  avoid  it  there  must  be  a  finding  of  an  actual  fraudulent 
intent.^  When  questions  of  relationship  intervene,  the 
motive  for  making  these  absolute  conveyances  becomes 
important.  Hence  where,  pending  a  suit,  a  debtor  trans- 
ferred all  his  property,  save  that  which  was  exempt,  to  his 
wife,  and  hired  out  to  her  for  his  "  board,  clothing,  and 
lodging,"  the  transaction  was  held  to  afford  grounds  for 
suspicion,  and  to  call  for  satisfactory  proof  of  good  faith 
and  fair  consideration.*  Commenting  upon  the  effect  of 
the  generality  of  the  gift,  Mr.  May  says,^  that  it  is  "when 
taken  in  conjunction  with  other  circumstances,  a  mark  of 
fraud  ^  for  dolus  versatur  in  genera libus  ;  ^  yet  it  is  no  con- 


'  Bigelow  V.  Doolittle,  36  Wis.  119;  Booher  v.  Worrill,   57  Ga.  235.     See 

S.  P,  Kerr  v,  Hutchins,  46  Tex.  389-  §  242. 

390.  *  May  on  Fraudulent    Conveyances, 

^  See   Bibb   v.   Baker,    17   B.   Men.  p.  82. 

(Ky.)   305  ;    Wheelden  v.    Wilson,  44  "  Citing     Chamberlain     v.     Twyne 

Me.  20;  Hughes  V,  Roper,  42  Tex.  126.  (Twyne's  Case),  F.  Moo.  638;    Stile- 

2  Clark  V.  Wise,  46  N.  Y.  612.     See  man  v.  Ashdown,  2  Atk.  477  ;  Mathews 

Bigelow   V.    Doolittle,    36    Wis.     119;  v.  Feaver,  i  Cox's  Eq.  Cas.  280 ;  Ware 

Alton  V.  Harrison,  L.  R.  4  Ch.  App.  v.   Gardner,    L.    R.    7    Eq.    317.     See 

626.     Compare  Bank  of  Ga.  v.  Higgin-  Blennerhassett  v.  Sherman,  105  U.S.  100. 

bottom,  9  Pet.  6i.  ^  Citing  Twyne's  Case,  3  Rep.  81  a  ; 

^  Dresher  v.  Corson,  23  Kans.  315  ;  Stone  v.  Grubham,  2  Bulstr.  225. 


o 


26  INADEQUACY  OF  PURCHASE  PRICE.        §  232 


eluding  proof  either  under  this  statute  (13  Eliz.  c.  5)  or  by 
the  eommon  law."  ^  Then  as  we  have  seen  ^  in  Twyne's 
Case,  the  very  first  mark  of  fraud  specified  was  "that  the 
gift  was  general,  without  exception  of  the  donor's  apparel, 
or  of  anything  of  necessity."  Chief-Justice  Marshall  in 
the  leading  case  of  Sexton  v.  Wheaton,^  observed :  "  The 
proportional  magnitude  of  the  estate  conveyed  may  awaken 
suspicion,  and  strengthen  other  circumstances  ;  but,  taken 
alone,  it  cannot  be  considered  as  proof  of  fraud."  Among 
the  prominent  badges  of  fraud  affecting  a  conveyance  as 
to  subsequent  creditors  may  be  mentioned  the  contracting 
of  debts,  and  engaging  in  a  hazardous  business  or  specula- 
tion, with  the  intention  of  shouldering  the  risk  of  loss  upon 
creditors.  The  cases  and  principles  appertaining  to  this 
subject  have  already  been  considered.^  To  this  class  of 
evidence,  McCrary,  J.,  adds  another  badge,  viz.:  "The 
fraudulent  disposition  of  the  remaining  estate  of  the  grantor 
very  soon  after  the  conveyance."  ^ 

§  232.  Inadequacy  of  purchase  price. — As  has  already  been 
shown,  to  enable  a  creditor  to  invalidate  a  sale  of  property, 
tangible  facts  must  be  proved,  from  which  a  legitimate  in- 
ference of  a  fraudulent  intent  can  be  drawn.  It  will  not 
suffice  to  create  a  suspicion  of  wrong,  nor  vi^ill  the  jury  be 
permitted  to  guess  at  the  truth. *^  Mere  proof  of  inadequacy 
of  price  by  itself  has  been  considered  insufficient  to  impli- 
cate the  vendee  in  the  fraudulent  intent,  or  to  impeach  his 
good  faith,'''  and  inadequacy  of  consideration,  unless  ex- 
tremely gross, ^  does  not  per  se  prove  fraud.^     It  must  ap- 

'  Citing  Chamberlain  v.  Twyne,  F.  '   '  Burdickv.Gill,  7  Fed.  Rep.  668,  670. 

Moo.  638  ;  Nunn  v.  Wilsmore,  8  T.  R.  "  See  §§  5,  6. 

528;    Ingliss  V.  Grant,  5  T.    R.    530;  'Jaeger  v.    Kelley,   52   N.  Y.    274. 

Meux  V.  Howell,  4  East  i  ;   Janes  v.  See  Sherman  v.  Hogland,  73  Ind.  477  ; 

Whitbread,    11    C.    B.   406 ;    Alton  v.  McFadden   v.    Mitchell,    54   Cal.  629. 

Harrison,    L.    R.    4    Ch.    App.    622  ;  See  §  6. 

Evans  v.  Jones,  11  Jur.  (N.  S.)  784.  "  Archer  v.  Lapp,  12  Ore.  202  ;  Daw- 

-  §  22,  son  V.  Niver,  19  S.  C.  606  ;  Witherwax 

^  8  Wheat.  229,  250.  v.  Riddle,  121  III.  145. 

*  See  §§  96,  99,  100.  ^  Kempner  v.  Churchill,  8  Wall.  369. 


§   232  INADEQUACY    OF    PURCHASE    PRICE.  327 

pear  that  the  price  was  so  manifestly  inadequate  as  to  shock 
the  moral  sense,  and  create  at  once  upon  its  being  men- 
tioned a  suspicion  of  fraud. ^  It  is  even  held  that  in  the 
absence  of  other  evidence  tending  to  show  fraud,  the  court 
will  not  deem  inadequacy  of  consideration  sufficient  to  do 
so.^  Gordon,  J.,,  said  :  "  Other  things  being  fair  and  hon- 
est, mere  inadequacy  of  price  cannot,  of  itself,  beget  even 
a  presumption  of  fraud,  much  less  is  \\. per  sc  fraudulent."^ 
Still,  authority  is  abundant  to  the  effect  that  where  a  cred- 
itor or  purchaser  obtains  the  property  or  estate  of  an  insol- 
vent debtor  at  a  sacrifice  or  an  under  rate  or  value,  there  is 
a  strong  and  even  violent  presumption  of  a  fraudulent  in- 
tent.^ Thus  where  a  first  lien  for  $1,200  on  a  farm  worth 
$13,000,  was  transferred  for  a  consideration  of  $400,  this 
was  considered  evidence  of  fraud  which  must  be  submitted 
to  a  jury.^  Again  it  is  more  strongly  stated  in  Davidson 
V.  Little,^  that  "  the  sale  of  lands  or  goods  by  an  indebted 
person  for  less  than  their  value  is  ipso  facto  a  fraud  in  both 
vendor  and  vendee.""  Where  the  value  was  $7,700,  and 
the  estimated  consideration  $1,537,  it  was  held  to  be  con- 
clusively fraudulent.^  The  difference  was  regarded  as  "  so 
great  as  to  shock  the  common  sense  of  mankind,  and  fur- 
nish in  itself  conclusive  evidence  of  fraud."  ^  The  ques- 
tion, however,  is  usually  submitted  to  the  consideration  of 
a  jury,^°  to  determine  the  intent  of  the  parties,"  and  is  almost 


'  Clark  V.  Krause,  2  Mackey  (D.  C.)  '  Rhoads  v.  Blatt  84  Pa.  St.  32;  s. 

566.  C.  I  Am.  Insolv.  R.  45. 

"  Emonds  v.  Termehr,  60  Iowa  92,  ^  22  Pa.  St.  252. 

96.     See  Cavender  v.   Smith,  8   Iowa  '  See  Doughten  v.  Gray,  10  N.J.  Eq. 

360 ;  Boyd  v.  Ellis,  1 1  Iowa  97.  330. 

'  Schatzv.  Kirker,  4East.  R'^p.fPa.]  'Wilson   v.  Jordan.  3  Woods  642. 

141^144.  See  Ratcliff  v.  Trimble,   12  B.  Mon. 

*'see  Shelton  v.  Church,  38  Conn.  (Ky.)  32  ;  Borland  v.  Mayo,  8  Ala.  104; 

420;  Bartles  v.  Gibson,  17  Fed.  Rep.  Prosser  v.  Henderson,  11  Ala.  484. 

297  ;  Brown  v.  Texas  Cactus  Hedge  Co.,  "  Hoot  v.  Sorrell,  1 1  Ala.  4cx>. 

64  Tex.  400;  Stern  Auction  &  C.  Co.  '"  Craver  v.  Miller,  65  Pa.  St.  456. 

V.  Mason,  16  Mo.  App.  477-  "  Motley  v.  Sawyer,  38  Me.  68. 


328  TRANSFER    PENDING    SUIT.  §   233 

always  linked  with  other  circumstances  or  indicia  of  fraud/ 
Inadequacy  of  consideration  is  a  fact  calling  for  explana- 
tion, and  is  often  treated  as  a  badge  of  fraud.^  Insuffi- 
ciency of  price  and  insolvency  of  a  debtor,  say  the  Supreme 
Court  of  California,  may  be  circumstances  more  or  less 
potential  in  the  determination  of  fraud  as  a  question  of 
fact,  but  failure  of  consideration  is  not  in  itself  sufficient  to 
justify  a  court  in  finding  fraud  as  matter  of  law.^ 

§  233.  Transfer  pending  suit. — The  transfer  of  all,  or,  ac- 
cording to  some  authorities,  of  a  portion  of  a  man's  goods 
during  the  pendency  of  a  suit  against  him  is  a  mark  of 
fraud.^  One  of  the  circumstances  specified  in  Twyne's 
Case^  was  that  the  "  transfer  was  made  pending  the  writ."  ^ 
This  fact  usually  induces  the  suspicion  that  the  conveyance 
was  made  to  secure  the  property  from  attachment  or  exe- 
cution in  the  pending  suit,  and  to  hinder,  delay,  or  defraud 
creditors.'^     This  inference  may  of  course  be  rebutted.^     In 

>  Hudgins  v.  Kemp,  20  How.  50.  able  value,  the  fact  that  the  considera- 

*  See  Fisher  V.  Shelver,  53  Wis.  498;  tion   is  small    does   not    constitute   a 

Williamson  v.  Goodwyn,  9  Gratt.  (Va.)  badge  of  fraud. 

503  ;  Laidlaw  v.  Gilmore,  47  How.  Pr.  ^  Redfield  &  Rice  Mfg.  Co.  v.  Dysart, 

(N.  Y.)  68  ;  Hudgins  v.  Kemp,  20  How.  62  Pa.  St.  63  ;  Godfrey  v.  Germain,  24 

50;  Fuller  V.  Brewster,   53  Md.  361:  Wis.  416;  Babb  v.  Clemson,  10  S.  &  R. 

Delaware  v.  Ensign,  21  Barb.  (N.  Y.)  (Pa.)  424;  Ford  v.  Johnston,  7  Hun  (N. 

85  ;  Ames  v.  Gilmore,  59  Mo.  537  ;  Y.)  568 ;  United  States  v.  Lotridge,  i 
Scott  V.  Winship,  20  Ga.  429;  Apper-  McLean  246;  Thomas  v.  Pyne,  55  Iowa 
son  V.  Burgett,  33  Ark.  338  ;  Boyd  v.  348  ;  Schaferman  v.  O'Brien,  28  Md. 
Ellis,  II  Iowa  97  ;  Barrow  v.  Bailey,  5  565  ;  Crawford  v.  Kirksey,  50  Ala.  590; 
Fla.9;  Loring  V.  Dunning,  16  Fla.  119;  Hartshorn  v.  Fames,  31  Me.  99;  Soden 
Bickler  V.  Kendall,  66  Iowa  703 ;  Dout-  v.  Soden,  34  N.  J.  Eq.  115;  Bean  v. 
hitt  V.  Applegate,33Kans.  396;  Easum  Smith,  2  Mason  252;  Calian  v.  Statham, 
V.  Pirtle,  81  Ky.  563;  Steere  v.  Hoag-  23  How.  477;  Stoddard  v.  Butler,  20 
land,  39  111.  264,  Stevens  v.  Dillman,  Wend.  (N.  Y.)  507;  Booher  v.  Wor- 

86  111.  233.  See  Metropolitan  Bank  v.  rill,  57  Ga.  235  ;  Stewart  v.  Wilson,  42 
Durant.  22  N.  J.  Eq.  35.  Pa.  St.  450  ;  King  v.  Wilco.x,  11  Paige 

3  McFadden  v.  Mitchell,  54  Cal.  629 ;  (N.  Y.)  589. 

Jamison   v.    King,    50  Cal.    133.     See  ^  3  Rep.  80 ;  i  Smith's  Lea.  Cas.  33. 

Motley  V.  Sawyer,  38  Me.  68.     In  Day  •*  See  §  22. 

V.  Cole,  44  Iowa  452,  the  court  say  that  ''  See  Merrill  v.  Locke,  41  N.  H.  490. 

where  the  incumbrances  upon  realty,  '  Sipe   v.  Earman,   26  Graft.   (Va.) 

with  the  consideration  paid  for  its  con-  563.     See  Skipwith  v.  Cunningham,  8 

veyance,  very  nearly  equal  its  reason-  Leigh  (Va.)  271. 


§  234  EVIDENCE  OF  SECRECY.  329 

Ray  V.  Roe  ex  dem.  Brown,'  the  court  said  that  the  pend- 
ency of  a  suit  was  "  one  of  the  many  badges  of  fraud  " 
which  would  induce  a  court  of  equity  to  set  aside  a  con- 
veyance, or  a  jury  to  regard  it  as  covinous.  In  Shean  v. 
Shay^  it  is  characterized  as  "only  one  of  the  badges." 
The  court  further  said  :  "  The  deed  may  be  shown  to  be 
fraudulent  and  void  as  to  creditors  when  no  suit  was  pend- 
ing to  recover  the  debt  or  damages  when  it  was  made." 

The  pendency  of  a  suit  is  a  warning  to  a  dishonest 
debtor  to  make  haste  to  alienate  and  cover  up  his  assets. 
While  the  service  of  process  in  a  suit  does  not  usually 
create  a  lien  upon  the  defendant's  property,  and  the  doc- 
trine of  lis  pejidens  is'  limited  in  its  application,  yet  trans- 
fers pending  a  suit  are  justly  scanned  with  very  gruat  sus- 
picion ;  and  where  it  is  certain  that  judgment  would  be 
rendered  against  the  vendor,  and  evidence  of  inadequacy 
of  consideration  is  adduced,  the  courts  will  conclude  that 
the  conveyance  is  colorable,  and  made  with  a  view  to 
hinder,  delay,  and  defraud  creditors.^  Mr.  May^  states  the 
rule  to  be  that  where  the  conveyance  is  made  pejidcntc 
lite,  it  is,  "  when  coupled  with  other  circumstances,  sug- 
gestive of  fraud,  but  where  the  consideration  is  adequate, 
not  a  strong  mark  of  a  fraudulent  intention."  This,  how- 
ever, can  scarcely  be  regarded,  under  the  American  author- 
ities, as  giving  this  important  element  of  proof  its  proper 
weight. 

§  234.  Evidence  of  secrecy.— An  unusual  degree  of  secrecy 
observed  between  the  parties  in  the  making  of  the  sale  is 
a  badge  of  fraud  ;^  and  the  secret  removal  of  the  .property 
immediately  after  the  sale  indicates  a  dishonest  j)urpose.'' 
Circumstances  indicative  of  concealment,  or  of  a  design  to 


'  2  Blackf.  (Ind.)  258.  '  Fishel  v.  Ireland,  52  Ga.  632.     See 

*  42  Ind.  377.  Callan    v.    Statham.    23    How.    480 ; 

"  Jaffers  v.  Aneals,  91  III.  487,  493.  Corlett  v.  Radcliffe,  14  Moo.  P.  C.  140. 

^  May's  Fraudulent  Conveyances,  p.  '^  Delaware  v.  Ensij^n,  21   Barb.  (N. 

83.  Y.)  88. 


330  SUPPRESSION    OR    CONCEALMENT.  §   235 

give  a  man  the  appearance  of  possessing  property  which  he 
does  not  own,  are  evidences  of  fraud,  and  are  proper  for  a 
jury  to  weigh.''  Secrecy  **  is  a  circumstance  connected  with 
other  facts  from  which  fraud  may  be  inferred."^  An 
agreement,  however,  to  conceal  the  fact  of  a  purchase  is 
not  pc}'-  se  fraudulent,  but  is  merely  matter  of  evidence  in 
favor  of  avoiding  the  sale,  which,  although  perhaps  very 
strong,  is  still  capable  of  explanation.^  In  Haven  v.  Rich- 
ardson ^  the  court  said  :  "  Secrecy  is  not  of  itself  evidence 
of  fraud.  It  is  likely  to  accompany  fraud,  and  may  give 
force  to  other  evidence,  under  particular  circumstances." 
Thus  it  is  held  in  Massachusetts  that  an  arrangement  or 
understanding  in  regard  to  withholding  mortgages  from 
record  until  the  mortgagors  should  have  trouble,  did  not 
render  the  mortgages  void,  but  was  a  matter  entitled  to 
consideration  by  the  jury  in  passing  upon  the  question  of 
fraud  at  common  law.^  On  the  other  hand,  an  agreement 
that  the  transaction  is  to  be  kept  secret  until  the  debtor 
has  an  opportunity  of  escaping  beyond  the  reach  of  process 
issued  by  his  other  creditors,  or  by  which  the  deed  is  not 
to  be  offered  for  record  until  the  other  creditors  threaten 
suit,  will  render  it  fraudulent.  Secrecy  in  such  cases  is  a 
part  of  the  consideration  ;  the  transaction  is  contaminated 
by  it,  and  ought  not  to  be  regarded  as  bona  fide.^ 

§  235.  Suppression  or  concealment  —  Subsequent  fraud. — 
As  long  ago  as  the  case  of  Hungerford  v.  Earle,*^  it  was  held 
that,   "  a  deed  not  at   first  fraudulent  may  afterwards  be- 


'  Ross  V.  Crutsinger,  7  Mo.  249.  *  Hafner  v.  Irwin,    I    Ired.  (N.  C.) 

-  Warner  v.  Norton,  20  How.  460.  Law  499.     Mr.  May   regards   secrecy 

^  Gould  V.  Ward,  4  Pick.  (Mass.)  104.  as   always   evidence,  but  not   of  itself 

■*5N.  H.  127.     See  Blennerhassett  V.  conclusive   evidence   of  fraud      May's 

Sherman,  105  U.  S.  117.  Fraudulent  Conveyances,   p.   83.     See 

*  Folsom    V.    Clemence,    iii    Mass.  Griffin    v.    Stanhope,    Cro.  Jac.   454; 

277.     See  Thouron  v.  Pearson,  29  N.  Worseley  v.  De  Mattos,  i  Burr.  467  ; 

J.  Eq.  487.     Rut  compare  Hildeburn  V.  Leonard   v.    Baker,    i    M.    &  S.  251  ; 

Brown,    17  B.   Mon.   (Ky.)   779.     See  Corlett  v.  Radcliffe,  14  Moo.  P.  C.  139. 

§  235.  '  2  Vern.  261. 


§   235  SUPPRESSION    OR    CONCEALMENT.  33 1 

come  so  by  being  concealed,  or  not  pursued,  by  which 
means  creditors  are  drawn  in  to  lend  their  money."  This 
doctrine  has  been  repeatedly  recognized  and  reaffirmed  in 
different  forms  in  State  and  Federal  tribunals.^  In  Coates 
V.  Gerlach  ^  it  appeared  that  a  deed  of  land  had  been  made 
by  a  husband  directly  to  his  wife.  The  deed  was  dated 
March  23,  1857,  but  was  not  filed  for  record  until  Decem- 
ber 2,  1857,  over  eight  months  thereafter.  On  Jan.  21, 
1858,  the  husband,  professing  to  act  as  the  agent  of  the 
wife,  effected  a  sale  of  the  lands  to  a  third  party.  The 
creditors  of  the  husband  attached  the  moneys  in  the  hands 
of  the  vendees,  and  a  contest  arose  as  to  which  had  the 
better  right  to  the  proceeds  of  the  sale.  Touciiing  this 
controversy,  Strong,  J.,  said  :  "There  is  another  aspect  of 
this  case,  not  at  all  favorable  to  the  claim  of  the  wife.  It 
is  that  she  withheld  the  deed  of  her  husband  from  record 
until  December  2,  1857.  In  asking  that  a  deed  void  at 
law  should  be  sustained  in  equity,  she  is  met  with  the  fact 
that  she  asserted  no  right  under  it ;  in  fact,  concealed  its 
existence  until  after  her  husband  had  contracted  the  debts 
against  which  she  now  seeks  to  set  it  up.  There  appears 
to  have  been  no  abandonment  of  possession  by  the  hus- 
band  Even  if  the  deed  was  delivered  on  the  day  of 

its  date,  the  supineness  of  the  wife  gave  to  the  husband  a 
false  credit,  and  equity  will  not  aid  her  at  the  expense  of 
those  who  have  been  misled  by  her  laches."^  In  Blcnncr- 
hassett   v.    Sherman,'*  Woods,  J.,  in  delivering  the  unani- 

'  Hildreth    v.   Sands,   2  Johns.    Ch.  J.    Eq.  487;    Stewart    v.  Hopkins,   30 

(N.  Y.)  35  ;    Scrivenor  v.  Scrivenor,  7  Ohio  St.  502. 

B.  Mon.  (Ky.)  374;  Bank  of  the  U.  S.  '  44  Pa.  St.  43,  46. 

V.    Housman,    6    Paige  (N.  Y.)    526;  '  See  McWillianis  v.  Rodgcrs,  56  Ala. 

Beecher  v.  Clark,  12  Blatchf.  256  ;  Bien-  87. 

nerhassett  v.  Sherman,  105  U.  S.  100  ;  ^  105  U.  S.  117.    In  Jaffrcy  v.  Brown, 

Coates  V.  Gerlach,  44  Pa.  St.  43 ;  Hal-  29  Fed.  Rep.  481.  the  court  said  :  "  The 

ner  V.  Irwin,  i   Ired.  (N.  C.)  Law  490;  mortgages  to  all  the  relatives  of  the 

Blackman  v.  Preston,  24  111.  App.  240.  defaulting   firm   ....  were    recorded 

See  Hildeburn  v.  Brown,   17  B.  Mon.  October    14th,  three  days   before    the 

(Ky.)  779;  Thouron  V.  Pearson,  29  N.  assignment.    The  suppression  of  these 


332  EVIDENCE    ALIUNDE.  §   236 

moLis  opinion  of  the  United  States  Supreme  Court,  ob- 
served :  "  But  where  a  mortgagee,  knowing  that  his  mort- 
gagor is  insolvent,  for  the  purpose  of  giving  him  a  ficti- 
tious credit  actively  conceals  the  mortgage  which  covers 
his  entire  estate  and  withholds  it  from  the  record,  and 
while  so  concealing  it  represents  the  mortgagor  as  having 
a  large  estate  and  unlimited  credit,  and  by  these  means 
others  are  induced  to  grive  him  credit,  and  he  fails  and  is 
unable  to  pay  the  debts  thus  contracted,  the  mortgage  will 
be  declared  fraudulent  and  void  at  common  law,  whether 
the  motive  of  the  mortgagee  be  gain  to  himself  or  advan- 
tao-e  to  his  mortgao-or."^  But  there  must  be  some  evi- 
dence  of  a  preconcerted  and  contrived  purpose  to  de- 
ceive and  defraud  the  other  creditors  of  the  mortgagor, 
of  which  scheme  the  withholding  of  the  instrument  from 
the  record  constitutes  a  part.  It  is  said  in  Curry  v. 
McCauley:^  "When  the  mortgage  was  executed  and  de- 
livered nothing  further  was  necessary  to  its  validity  as  a 
complete  transaction.  It  has,  therefore,  been  held  in 
Pennsylvania,  by  a  long  seiies  of  decisions,  that,  as  be- 
tween the  parties,  a  mortgage  takes  effect  upon  delivery, 
and  that  an  unrecorded  mortgage  is  good  against  an  as- 
signee for  the  benefit  of  creditors." 

§  236.  Evidence  aliunde. —  In  a  controversy  which  arose  in 
Mississippi'^  it  was  decided  that  a  deed  of  trust  in  the  nature 
of  a  mortgage,  valid  on  its  face,  and  not  made  or  received 
with  any  intent  to  defeat  existing  or  future  creditors,  may 


mortgages  until  this  critical  moment  is  of  the  grantor,  even  though  it  may  not 

a  badge  of  fraud  as  to  creditors,  and  be  the  real  title  of  the  debtor.     Nelson 

they  will  be  denied  vahdity  and  effect-  v.  Henry,  2  Mackey  (D.  C.)  259.     The 

iveness  as  liens  upon  the  property  of  creditor  must  not,  however,  lose  sight 

debtors."  of  the  general  rule  that  a  judgment  is 

'  In  cases  where  the  statute  requires  not  usually  good  against  an  unrecorded 

that  a  deed  should  be  recorded  within  conveyance, 

a  certain  period,  and  the  grantee  neg-  '  20  Fed.  Rep.  584. 

lects  so  to  record  it,  a  creditor  of  the  »  Hilliard  v.  Cagle,  46  Miss.  309. 
grantor  may  pursue  the  ostensible  title 


§237  CONCEALMENT. 


00  J 


nevertheless  be  held  to  be  fraudulent  and  void  as  to  all 
creditors,  existing  and  future,  by  evidence  alumde  showing 
the  conduct  of  the  parties  in  their  dealings  in  reference  to 
the  deed.  The  principal  circumstances  relied  on  in  this 
case  to  avoid  the  deed  were  the  facts  that  the  grantor  re- 
tained possession  of  the  property,  and  that  the  deed  was 
withheld  from  record.  This  enabled  the  mortgagor  to 
contract  debts  upon  the  presumption  that  the  property  was 
unincumbered.  The  court  said  :  "  The  natural  and  loo  ical 
effect  of  the  agreement  and  assignment,  and  the  conduct 
of  the  parties  thereto,  was  to  mislead  and  deceive  the  j-)ub- 
lic,  and  induce  credit  to  be  given  to  Baggett  |  the  mort- 
gagor], which  he  could  not  have  obtained  if  the  truth  had 
been  known,  and  therefore  the  whole  scheme  was  fraudu- 
lent as  to  subsequent  creditors,  as  much  so  as  if  it  had  been 
contrived  with  that  motive  and  for  that  object."  ^ 

§  237.  Concealment  in  fraud  of  bankrupt  act.  —  In  Blenner- 
hassett  v.  Sherman,'-  a  very  important  case  reviewing  the 
authorities  concerning  suppression  and  concealment  of 
transfers,  the  court  held  that  a  mortgage  executed  by  an 
insolvent  debtor  with  intent  to  give  a  preference  to  his 
creditors,  was  void  under  the  bankrupt  act.  It  ajijicared 
that  the  creditor  had  reasonable  grounds  to  believe  the 
mortgagor  insolvent,  and  knew  that  the  instrument  was 
made  in  fraud  of  the  provisions  of  the  bankrupt  act  ;  and 


'  See  Gill  v.  Griffith  &  Schley,  2  Md.  newal  upon  record,  to  the  prejudice  of 

Ch.  Dec.  270.     In  this  case  the  court  the  other  creditors  who  had  trusted  the 

decided  that  a  party  could  not  be  per-  debtor  on  the  streng^th  of  the  posses- 

mitted  to  take  for  his  own  security  a  sion  and  ostensible  ownership  of  the 

bill  of  sale  or  mortgage  of  chattels  from  mortgaged    property.      The  mortgage 

another,  leaving  the  mortgagor  at  his  which  was  in  controversy  was  declared 

request   in   possession  and   ostensibly  void,  and  the  decree  was  aflirmed  on 

the  owner,  and  keep  the  public  from  a  appeal.     See,  further,  Hafner  v.  Irwin, 

knowledge  of  the  existence  of  the  mort-  i   I  red.  (N.  C.)  Law  490 ;   Worselcy  v. 

gage  by  withholding  it  from  record  for  De  Matlos,    i   Burr.  467;  Tarback  v. 

an  indefinite  period,  renewing  it  peri-  Marbury,  2  Vern.  510;  Neslin  v.  Wells, 

odically,  and  then  receiving  the  benefit  104  U.  S.  428. 

of  the  security  by  placing  the  last  re-  '■'  105  U.  S.  100-121. 


oj- 


ABSOLUTE    CONVEYANCE.  §   238 


that  the  mortgagee  had,  for  the  purpose  of  evading  the 
bankrupt  law,  actively  concealed  the  existence  of  the  in- 
strument, and  withheld  it  from  record  for  a  period  of  more 
than  two  months.  The  security  was  avoided,  notwithstand- 
ing it  was  executed  over  two  months  before  the  filing  of 
the  petition  in  bankruptcy.* 

§  238.  Absolute  conveyance  by  way  of  security. — It  is  fa- 
miliar learning  that  a  deed  absolute  on  its  face  may,  despite 
the  statute  of  frauds,  be  shown  by  extrinsic  evidence  to  be 
a  mortgage,^  and  that  the  relationship  of  mortgagee  and 
mortgagor  with  all  the  usual  incidents  may  thus  be  estab- 
lished. If,  however,  the  transfer  was  not  devised  by  the 
debtor  to  defraud  or  delay  his  creditors,  or  if  it  was  so  de- 
signed, and  the  trustee  or  mortgagee  afforded  no  aid  in 
carrying  out  the  intention  of  the  principal,  the  transaction 
is  valid,-^  though  perhaps  open  to  suspicion.^  A  convey- 
ance by  way  of  security  must  be  in  all  respects  as  clean  and 
clear  as  a  conveyance  for  permanent  ownership.^  If  no 
fraud  was  in  fact  intended,  the  security  may  be  enforced  ;  ^ 
but  if  the  debtor  made  a  secret  reservation,'^  or  the  creditor 
comes  into  court  with  a  fraudulent  claim  of  an  absolute 
title,^  other  creditors  may  avoid  the  transaction.^     Williams, 

1  The  repeal  of  the  Federal  Bankrupt         ^  Stevens  v.  Hinckley,  43  Me.  441; 
Act  renders  unimportant  the  consider-     Reed  v.  Woodman,  4  Me.  400. 

ation  of  cases  arising  exclusively  under        ■*  Smith  v.  Onion,  19  Vt.  429. 

its  provisions.  ^  Phinizy  v.  Clark,  62  Ga.  623-627. 

2  Horn  V.  Keteltas,  46  N.  Y.  605  ;  *  Gaffney's  Assignee  v.  Signaigo,  i 
Carr  v.  Carr,  52  N.  Y.  251 ;  Murray  v.  Dill.  158  ;  Chickering  v.  Hatch,  3  Sum- 
Walker,  31  N.  Y.  399  ;  McBurney  v.  ner  474;  Smith  v.  Onion,  19  Vt.  427. 
Wellman,  42  Barb.  (N.  Y.)  390 ;  s.  c.  '  Lukins  v.  Aird,  6  Wall.  78.  See 
sub  nomine  Dodge  v.  Wellman,  43  Oriental  Bank  v.  Haskins,  3  Mete. 
How.  Pr.  (N.  Y.)  427 :  Odell  v.  Mon-  (Mass.)  332. 

tross,  68  N.  Y.  499 ;  Hassam  v.  Barrett,  "  Thompson  v.  Pennell,  67  Me.  162. 

115  Mass.  256 ;  Henley  v.  Hotaling,  41  ^  The  law  is  settled  in  Alabama  that 

Cal.  22;  Sedg.  and  Wait  on  Trial  of  an  absolute   conveyance  of  lands   in- 

Title  to  Land,  2d  ed.,  §337;  Gay  v.  tended  as  security  for  a  debt,  or,  in 

Hamilton,    33    Cal.    686  ;     French    v.  other  words,  designed  to  operate  as  a 

Burns,  35  Conn.  359 ;  Clark  v.  Finlon,  mortgage,  is  fraudulent  and  void  as  to 

90  111.  245  ;  Butcher  v.  Stultz,  60  Ind.  existing  creditors.     The  court  say  that 

170 ;  McCarron  v.  Cassidy,  18  Ark.  34.  the  parties  may  not  intend  fraud,  there 


§  239  INSOLVENCY.  335 

Ch.  J.,  said  in  Barker  v.  French:^  "  xVlthough  it  is  true 
that  a  person  may  take  security  for  a  debt  by  a  deed  abso- 
lute, or  by  a  bill  of  sale,  when  it  was  intended  for  security, 
yet  there  should  be  no  disguise,  nor  dissembling,  nor  false- 
hood ;  and  if  the  party  claims  an  absolute  purchase  when 
the  sale  was  only  intended  for  security,  and  thereby  seeks  ■ 
to  protect  from  the  creditors  the  property  of  the  vendor, 
and  endeavors  to  conceal  the  true  nature  of  the  transaction, 
it  is  evidence  of  fraud."  Probably  the  weight  of  the  better 
authority  and  the  sounder  reasoning  is  to  the  effect  that  an 
absolute  conveyance  by  way  of  security  is  a  badge  of  fraud 
which  may  be  removed  by  evidence  of  an  honest  intent.* 
It  may  be  noted  with  reference  to  the  law  upon  this  sub- 
ject, that  an  absolute  conveyance  by  way  of  security  affords 
a  convenient  and  tempting  cover  for  fraud  upon  creditors, 
and  the  tendency  to  regard  transactions  of  this  kind  with 
suspicion  should  be  encouraged.  Where  the  security  is 
corrupted  with  fraud,  not  only  can  creditors  secure  it  to  be 
avoided,  but,  as  is  elsewhere  shown,  the  parties  themselves 
can  get  no  relief.^ 

§  239.  Insolvency. — Insolvency,  as  we  have  seen,  does 
not  deprive  the  owner  of  the  power  to  sell  his  property,"* 
to  pay  his  debts,  whether  to  one  or  more  of  his  creditors.'^ 
Indebtedness  or  hopeless  insolvency  is,   however,   an    im- 

may  be  no  actual  intent  to  hinder,  de-  v.  Roe,  35  N.  J.  Eq.  90.     See  Gibson 

lay,  or  defraud  creditors,  yet,  because  v.  Seymour,  4  Vt.  522  ;  Columbia  Bank 

such  is  its  inevitable  consequence,  the  v.  Jacobs,  10  Mich.  349;  Harrison  v. 

law  condemns  it.     Sims  v.  Gaines,  64  Trustees  of  Phillips  Academy,  12  Mass. 

Ala.  396.     See   Bryant   v.   Young,  21  456. 

Ala.  264;   Hartshorn   v.  Williams,  31         '  Hassam  v.  Barrett.  115  Mass.  258. 

Ala.  149.     To  the  same  general  effect,         "  Singer  v.  Goldcnburg,  17  Mo.  App. 

see  Ladd  v.  Wiggin,  35  N.  H.  426,  and  549. 

cases    cited.      Compare    Prescott    v.         ^  Crawford  v.  Kirksey,  50  Ala.  591  ; 

Hayes,   43    N.    H.    593  ;    Chenery   v.  Stover  v.  Herrington,  7  Ala.  142.     See 

Palmer,  6  Cal.  122.  §§  52,  95.     Insolvency  ol  a  corporation 

'  18  Vt.  460.  does  not  necessarily  entitle  stockholders 

■^  Ross  V.  Duggan,  5  Col.  100  ;  Ste-  to  secure  a  receiver.     Denike  v.  N.  Y. 

vens  V.   Hinckley,  43  Me.  440;    Em-  &  Rosendale  Lime  &  Cement  Co.,  80 

raons  V.  Bradley,  56  Me.  333;  Moore  N.  Y.  599.  Wait  on  Insolv.  Corps.  §  178. 


336  SALES  UPON  CREDIT.  §  24O 

portant  element  of  proof  in  marshalling  badges  of  fraud 
to  overturn  a  covinous  transaction.^  The  distinction  be- 
tween the  right  of  existing  and  subsequent  creditors  which, 
of  course,  has  an  important  bearing  upon  this  subject,^  is 
elsewhere  considered.  The  conveyance,  to  be  fraudulent, 
should  bear  such  a  ratio  to  the  indebtedness  as  to  tend 
directly  to  defeat  the  claims  of  creditors.^  A  heavy  in- 
debtedness of  the  grantor,  together  with  a  sale  to  a  rela- 
tive, of  necessity  form  strong  badges  or  indications  of  col- 
lusion and  fraud,  but  are  not  in  themselves,  unsupported 
by  other  material  facts,  deemed  conclusive  proofs  of  fraud. ^ 
Again,  it  is  said  that  insolvency  of  the  grantor,  although  a 
circumstance  which  may  be  taken,  together  with  other 
material  facts,  to  show  a  fraudulent  design  in  disposing  of 
property,  is  not  regarded  as  sufficient  of  itself  to  establish 
it.^  The  sale  of  all  the  effects  of  an  insolvent  copartnership 
upon  credit  at  a  fair  valuation,  to  a  responsible  vendee  who 
knew  of  the  insolvency,  is  not  per  se  fraudulent  ;^  nor  does 
proof  of  a  sale  upon  credit,  by  a  party  in  failing  circum- 
stances, to  one  who  had  knowledge  of  these  circumstances, 
necessarily  establish  fraud. '^ 

§  240.  Sales  upon  credit. — It  must  be  remembered  that 
every  delay  to  which  a  creditor  is  subjected  in  the  collec- 
tion of  his  debt  is  not  necessarily  fraudulent.^  Insolvency, 
as  is  elsewhere  shown,  does  not  deprive  a  debtor  of  the 
right  to  sell  his  property  ;  ^  and  if  the  sale  is  made  in  good 


'  Hudgins  v.   Kemp,   20   How.  45  ;  Peirce  v.  Merritt,  70  Mo.  277 ;  Fuller 

McRea  v.  Branch  Bank  of  Alabama,  v.  Brewster,  53  Md.  358. 
19  How.  377;    Bibb  V.  Baker,  17   B.        -  See  Chaps.  V.,  VI. 
Mon.  (Ky.)  292  ;  Bulkley  v.  Bufifington,         ^  Clark  v.  Depew,  25  Pa.  St.  509. 
5  McLean  457;  Purkitt  v.  Polack,  17         •*  Merrill  v.  Locke,  41  N.  H.  490. 
Cal.  327  ;  Hartshorn  v.  Eames,  31  Me.         °  Leffel  v.  Schermerhorn,  13  Neb.  342. 
93  ;    Ringgold  v.  Waggoner,  14   Ark.         ^  Ruhl  v.  Phillips,  48  N.  Y.  125  ;  S.  C. 

69  ;  Blodgett  v.  Chaplin,  48  Me.  322  ;  8  Am.  Rep.  522. 
Clark  V.  Depew,  25  Pa.  St.  509  ;  Bar-         '  Loeschigk  v.  Bridge,  42  N.  Y.  421. 
row  V.  Bailey,  5  Fla.  9.     Compare  Cox         "  Loeschigk  v.  Bridge,  42  Barb.  (N. 

V.   Fraley,  26  Ark.  20;   State  ex  rel.  Y.)  173;  affi'd  42  N.  Y.  421. 

»  See  §  52. 


§   241  UNUSUAL   ACTS    AND    TRANSACTIONS. 


337 


faith,  and  without  any  intent  to  hinder,  delay,  or  defraud 
creditors,  the  mere  fact  that  it  was  made  upon  credit  does 
not  require  that  it  should  be  declared  invalid.  The  court 
in  Roberts  v.  Shepard  ^  said  :  "A  sale  upon  credit  of  part 
of  their  property,  by  an  insolvent  firm,  is  a  circumstance 
which  may  be  considered,  with  others,  bearing  upon  the 
question  of  fraudulent  intent,  but  alone  does  not  necessarily 
establish  it."  Certainly  it  will  not  do  to  say  that  the  law 
presumes  that  every  man  who  sells  on  credit  does  so  with 
intent  to  hinder  and  delay  his  creditors.^  In  Ruhl  v.  Phil- 
lips^ the  New  York  Commission  of  Appeals,  reversing  the 
court  below,^  held  that  the  sale  of  the  entire  elTccts  of  an 
insolvent  copartnership  at  a  fair  valuation,  upon  a  credit 
ranging  from  four  to  twenty-four  months,  to  a  responsible 
vendee,  having  knowledge  of  the  insolvency,  was  not  fraud- 
ulent per  se.  In  the  New  York  Court  of  Appeals^  the 
principle  is  enunciated  that  the  mere  fact  of  a  sale  of  his 
property  by  a  party  in  failing  circumstances,  to  a  purchaser 
having  knowledge  of  his  condition,  upon  an  average  credit 
of  sixteen  months,  did  not  per  se  establish  fraud,  or  an  in- 
tent to  hinder  or  delay  creditors."  Where,  however,  it  ap- 
pears upon  the  face  of  the  transaction  that  the  parties  con- 
templated a  large  surplus,  and  the  property  is  practically 
protected  from  forced  sales  or  attachments  or  levies  for  two 
vears,  the  instrument  will  be  declared  void  as  hinderino:  and 
delaying  creditors.''' 

§  241.  Unusual  acts  and  transactions. — Courts  and  juries 
are  often  influenced  in  favor  of  creditors  by  slight  circum- 
stances connected  with  the  transaction  indicating  excessive 
efforts  to  give  the  conveyance  the  appearance  of  fairness, 
or  by  facts  which  are  not  the  usual  attendants  of  business 


.'  2  Daly  (N.  Y.)  112.  '  Compare  Brinley  v.  Spring-,.  7  Me. 

^  Gillet  V.  Phelps,  1 2  Wis.  399.  241;    Harris  v.    Burns,    50   Cal.    140; 

«  48  N.  Y.  125.  Lewis  v.  Caperton,  8  GratL  (Va.)  148. 

*  2  Daly  (N.  Y.)  45.  '  Bigelow  v.  Stringer,  40   Mo..   195. 

*  Loeschigk  v.  Bridge,  42  N.  Y,  421.  Compare  Reynolds  v. Crook,  p  Ala.634. 

22 


7^;^S  UNUSUAL    ACTS    AND    TRANSACTIONS.  §   24I 

transactions.  Honesty  requires  no  stratagem  or  subter- 
fuge to  support  and  aid  it*  In  Adams  v.  Davidson^  the 
assignee  took  a  fellow  clerk  with  him  to  witness  an  at- 
tempted transfer  of  possession,  and  requested  him  to  "  pay- 
attention  and  recollect  what  he  heard."  The  court  were 
plainly  influenced  by  the  evidence  of  this  request,  and  ob- 
served that  it  was  wholly  unnecessary  if  the  parties  in- 
tended to  comply  with  the  exactions  of  good  faith  in  tak- 
ing and  holding  possession  of  the  property  assigned.  To 
a  similar  effect  is  the  case  of  Hartshorn  v.  Eames.'^  In 
that  case  the  court  said  that  there  was  no  indication  of 
great  formality  in  transacting  business  between  the  parties, 
except  on  the  occasion  in  question,  when  great  precision 
was  resorted  to  ;  an  accurate  calculation  and  valuation  gone 
into,  and  the  claim  of  the  grantee  made  to  overbalance  the 
valuation.  These  with  other  facts  led  the  court  to  believe 
that  the  transaction  resembled  a  farce  rather  than  a  dona 
yffl'^  transaction.  Again  it  is  said  that  "  <5(??/«yf^^  transac- 
tions do  not  need  to  be  clothed  with  the  extraordinary 
pretence  of  prompt  payment."^  In  Langford  v.  Fly, ^  the 
deed  of  gift  contained  this  clause  :  "  Now  this  indenture  is 
not  to  hinder  or  delay  the  collection  of  any  of  my  just 
debts,  but  the  same  are  to  be  paid."  A  suit  for  slander 
was  pending  at  the  time.  The  court  said  that  this  clause 
was  evidently  the  result  of  a  consciousness  on  the  part  of 
the  assignor  that  others  might  think  the  deed  was  made 
v/ith  a  fraudulent  design,  and,  as  he  was  otherwise  free 
from  debt,"  it  indicated  that  his  purpose  in  making  the 
transfer  was  to  defeat  the  judgment  which  might  possibly 
be  recovered  in    the  action   for  slander.^     "  Studied  for- 


1  Comstock  V.  Rayford,  20  Miss.  391.  "the  parties  took  the  precaution  to  go 

-5  JO  N.  Y.  309,  312.  through  with  the  formality  of  procur- 

*  31  Me.  100.  ing,  executing,  and  delivering  a  bill  of 

*  King  V.  Moon,  42  Mo.  551,  561.  sale  of  the  property  ;   conduct  unusual 
5  7  Humph.  (Tenn.)  587.  in  respect  to  property  of  this  character 

*  In  Mead  v.  Noyes,  44  Conn.  491,  where  the  sale  is  honestly  made. "   This 


§   241  UNUSUAL    ACTS    AND    TRANSACTIONS.  339 

mality  and  apparent  fairness"  will  not  save  a  fraudulent 
transaction.^  In  Crawford  v.  Kirksey^  it  was  contended 
by  counsel  that  very  great  and  unusual  particularity  fur- 
nished badges  of  fraud.^  The  court  observed  that  if  the 
transaction  was  consummated  quietly  and  without  witnesses, 
then  the  complaint  would  he  that  it  was  secretly  effected. 
If  unusual  publicity  or  particularity  characterized  the  trans- 
action this  would  be  urged  as  a  badge  of  fraud.  This  it 
was  said  savored  of  the  water  test  which  in  former  years 
was  applied  to  those  suspected  of  witchcraft.  If  they  sank 
they  were  innocent,  but  they  incurred  great  hazard  of 
losing  their  lives  by  drowning  ;  if  they  swam  they  were 
adjudged  witches  and  perished  at  the  stake. 

It  may  be  observed  that  the  absence  of  memoranda,  or 
of  any  record  of  the  consideration  ;*  the  failure  to  take  an  ac- 
count of  the  stock,  and  no  agreement  as  to  the  exact  terms 
of  settlement  ;^  a  false  admission  of  the  receipt  of  the  con- 
sideration j*'  unusual  clauses  in  the  instrument;''  a  sale  to 
a  creditor  without  a  surrender  of  the  evidence  of  indebted- 


was  regarded  as   one  of  the  circum-  never  occur    between   parties    whose 

stances  attending  the  sale  which  tended  only  object  was  to  place  the  purchased 

strongly  to  show  the  existence  of  actual  .property  in  the  hands  of  the  purchaser 

fraud.  for  his  use.     The  act,  therefore,  would 

'  First    Nat.   Bank   v.    Knowles,  67  rather  be  evidence  of  caution,  like  the 

Wis.  385.  direction  sometimes  given  to  scriveners 

'  55  Ala.  300.  to  draw  up  strong  writings,  which,  to 

^  The    facts   in    Lake  v.  Morris,   30  say  the  least,  would   furnish  as  much 

Conn.    204,  afford    illustration  of    the  ground   to   suspect   the   honesty  of  a 

general  subject.     The  vendee  was    in  transaction  as  it  would  evidence  of  its 

actual  possession  of  the  property  pur-  bona  fides." 

chased.    Hence  counsel  contended  that  *  Hubbard   v.    Allen,    59   Ala.    300; 

the  sale  was  void  because  there  had  Alexander  v.  Todd,  i  Bond  179. 

been  no  actual  delivery  of  possession.  *  Wheelden  v.  Wilson,  44  Me.  20. 

The  court  in  overruling  the  argument,  *  Alexander    v.   Todd,  i   Bond  180; 

said  :    "  No  such  delivery  could    have  Balto.  &  O.  R.R.  Co.  v.  Hoge,  34  Pa. 

taken    place  without   first   taking   the  St.  214;  Watt  v.  Grove,  2  Sch.  &  Lef. 

horses    from    the  plaintiff's  possession  501. 

for  the  mere  purpose  of  redelivering  ■■  Pilling  v.  Otis,  13  Wis.  496;  Gibbs 

them   to   him    again.      But   a    merely  v.     Thompson,     7     Humph.     (Tenn.) 

formal  act  like  this  we  presume  would  179. 


340  UNUSUAL   ACTS    AND    TRANSACTIONS.  §   24 1 

ness;^  a  sale  not  conducted  in  the  '*  usual  and  ordinary- 
course  of  business 'V  conduct  of  the  parties  which  is  "ex- 
ceptional and  peculiar";^  a  conveyance  of  real  estate  with- 
out adequate  security;*  absence  of  authentic  evidence  of 
indebtedness,  considerable  in  amount,  other  than  a  pencil 
memorandum;^  contradictory  and  irreconcilable  accounts 
of  the  transaction  given  by  the  vendor  and  vendee  ;^  receiv- 
ing the  rents  and  managing  the  estate  by  the  vendor  after 
the  alleged  sale,  under  an  assumed  agency  from  the  vendee, 
but  without  any  evidence  of  a  genuine  agency  other  than 
the  uncorroborated  assertion  of  the  party;''  absence  of 
means  in  the  vendee  ;^  preparation  of  the  deed  at  the  sole 
instance  of  the  grantee;^  leaving  the  business  sign  the 
same  •,^^  employment  of  the  vendor  after  the  sale  ;"  sacrific- 
ing property  for  one-fourth  of  its  value  ;'^  deeding  property 
to  relatives  without  their  knowledge  ;^^  concealment  ;^*  ab- 
sence of  evidence  which  is  supposed  to  be  within  the  reach 
of  the  party  charged  with  the  fraudulent  act ;  ^^  neglect  to 
testify  ;^^    destruction    of   letters   relating   to   the   contro- 

'  Gardner  V.  Broussard,  39  Tex.  372  ;  Hurlburd  v.  Bogardus,   10  Cal.   518; 

Webb  V.  Ingham,  29  W.  Va.  389.  Rothgerber  v.  Gough,  52  111.  438.    See 

-  State  ex  rel.  Peirce  v.  Merritt,  70  Bird  v.  Andrews,  40  Conn.  542. 

Mo.  283.  '*  Stevens  v.  Dillman,  86  111.  235. 

*  Brinks  v.  Heise,  84  Pa.  St.  253 ;  '^  Lavender  v.  Boaz,  17  Bradw.  (111.) 

Gollober  v.  Martin,  33  Kans.  255.  421. 

•*  Owen  V.  Arvis,  26  N.  J.  Law  32.  '^  Hoffer  v.  Gladden,  75  Ga.  538. 

'  Brinks  v.  Heise,  84  Pa.  St.  253.  '^  Newman  v.  Cordell,  43  Barb.  (N. 

^  Marshall  v.  Green,  24  Ark.  419.  Y.)  448-461 ;  Peebles  v.  Horton,  64  N. 

'  Sands  v.  Codwise,  4  Johns.  (N.  Y.)  C.  374. 

536.  "*  Graham  v.  Furber,  14  C.  B.  410; 

"  Danby  v.  Sharp,  2  MacAr.  (D.  C.)  Goshorn  v.  Snodgrass,  17  W.  Va.  770; 

435;    Stevens  v.  Dillman,  86  111.  233.  Henderson  v.  Henderson,  55  Mo.  559. 

See  Castle  v.  Bullard,  23  How.  186,    In  See  Harrell  v.  Mitchell,  61    Ala.  270. 

Morford    v.    Dieftenbacker,    54   Mich.  "  The  omission  of  Johnson  to  testify  as 

593,  607,  Cooley,  C.  J.,  said;  "A  sale  a  witness  for  himself,  in  reply  to  the 

to    a    person    without    means    when  evidence    against     him,    is    of    great 

ready  money  was  the  nominal  purpose,  weight."     Bowden  v.  Johnson,  107  U. 

must  necessarily  be  suspicious."  S.  262.     See  Clark  v.  Van  Riemsdyk,  9 

"  Sears  v.  Shafer,  i  Barb.  (N.Y.)  408.  Cranch    1 53  ;    Clements    v.    Moore,  6 

'"  Danby  v.  Sharp,  2  MacAr.  (D.  C.)  Wall.  299;    Hoffer  v.  Gladden,  75  Ga. 

435;  Wright  V.  McCormick,  67  Mo.  430.  538.     But    see    Clark    v.    Krause,    2 

"  McKibbin  v.  Martin,  64  Pa.  St.  352  ;  Mackey  (D.  C.)  570. 


§   241  UNUSUAL    ACTS    AND    TRANSACTIONS.  341 

versy ;'  tendering  security  without  solicitation  ;'  transfers  pro- 
fessedly to  prevent  the  sacrifice  of  the  property  ;^  taking 
additional  security  by  way  of  chattel  mortgage  on  a  claim 
already  secured  by  mortgage  on  real  estate;*  extending 
unusual  credit  ;^  all  these  are  indicia  of  fraud  upon  creditors 
proper  for  the  consideration  of  the  jury,  or  of  a  court  of 
equity,  in  cases  where  a  jury  trial  is  not  had. 

On  the  other  hand,  a  purchase  of  land  by  an  attorney 
without  making  an  abstract  of  title  is  not  necessarily  evi- 
dence of  fraud  ;^  nor  is  a  sale  by  an  insolvent  of  his  whole 
stock  in  trade  upon  credit  always  covinous,'  though  it  is 
circumscribed  by  fraudulent  presumptions.  It  has  been 
even  held  that  evidence  of  a  sale  by  a  party  indebted,  of  an 
uninventoried  stock  of  goods,  on  credit,  to  a  near  relative, 
failed  to  establish  fraud  ;  nor  is  a  trust  void  because  not 
particularly  declared.^  Then  the  fact  that  the  purchaser 
has  no  use  for  the  property  is  not  evidence  of  fraud.®  The 
want  of  minute  accuracy  of  language,  and  the  disregard  of 
the  usual  forms,  will  not  render  an  assignment  void,^°  nor 
is  it  affected  by  a  failure  to  file  schedules,^*  nor  by  the  fail- 
ure to  record  it  for  a  few  days.^^  Giving  more  security  than 
is  necessary  is  not  itself  an  indication  of  fraud. ^' 

In  a  Massachusetts  case  it  was  decided  that  a  party  was 
not  entitled  to  offer  the  testimony  of  witnesses  to  the  effect 
"  that  the  giving  of  a  mortgage,  such  as  the  mortgage  in 
question,  would  not  be  in  the  usual  and  ordinary  course  of 
such  business."  That  was  considered  to  be  the  question 
for  the  jury  to  decide.^* 

'  Burke  v.  Burke,  34  Mich.  455.  "  Grubbs  v.  Greer,  5  Coldsv.  (Tenn.) 

*  Kellogg  V.  Root,  23  Fed.  Rep.  525.  548. 

'  German    Ins.    Bank    v.  Nunes,  80  '"  Meeker   v.  Saunders.  6   Iowa  67. 

Ky.  334.  Compare  State  v.  Kecler.  49  Mo.  548. 

"  Crapster  v.  Williams,  21  Kans.  109.  "  Produce  Bank  v.  Morton,  67  N.  Y. 

*Cowlingv.Estes,i5Brad\v.(Ill.)26o.  203.     See  Brennan   v.  Wilson,  i   Am. 

«  Jenkins  v.  Einstein,  3  Biss.  129.  Insolv.  Rep.  77. 

'  Scheitlin  v.  Stone,  43  Barb.  (N.  Y.)  "  Hoopes  v.  Knell,  31  Md.  553. 

634,  Sutherland,  J.,  dissenting.  '^  Colbern  v.  Robinson,  80  Mo.  541. 

"  Forbes  v.  Scannell,  13  Cal.  287.  '^  Buffum  v.  Jones,  144  Mass.  29,  31. 


342  RELATIONSHIP.  §  242 

§  242.  Effect  of  relationship  upon  debtor's  transactions, — 
It  is  said  by  the  Supreme  Court  of  Pennsylvania  that 
"  there  is  no  law  prohibiting  persons,  standing  in  near  rela- 
tions of  business  or  affinity,  from  buying  from  each  other  ; 
or  requiring  them  to  conduct  their  business  with  each  other 
in  special  form."  ^  The  sale  of  property  by  a  father  to  his 
son,  or  by  the  son  to  his  father,  cannot  in  itself  be  consid- 
ered as  a  badge  of  fraud,^  and  sometimes  the  strongest  con- 
siderations of  duty  may  prompt  a  son  to  prefer  the  claim 
of  a  widowed  mother.^  "  The  relationship  of  assignor  and 
assignee,"  says  Finch,  J.,  "  and  their  intimacy  and  friend- 
ship, and  the  preference  given  to  the  latter  as  a  creditor 
prove  nothing  by  themselves.  They  are  consistent  with 
honesty  and  innocence,  and  become  only  important  when 
other  circumstances,  indicative  of  fraud,  invest  them  vvith 
a  new  character  and  purpose,  and  transform  them  from 
equivocal  and  ambiguous  facts  into  positive  badges  of 
4raud."  ^  Relationship  of  the  parties,  however,  is  calculated 
to  awaken  suspicion,^  and  the  transaction  will  be  closely 
scrutinized,®  though  the  relationship  is  not  of  itself  sufficient 

'  Dunlap  V.  Boumonville,  26  Pa.  St.  *  Bumpas    v.    Dotson,    7    Humph. 

73.     See  Reehling  v.  Byers,  94  Pa.  St.  (Tenn.)  310 ;  Forsyth  v.  Matthews,  14 

323.     See  McVicker  v.  May,  3  Pa.  St.  Pa.  St.  100 ;    Harrell   v.   Mitchell,  61 

224;  Forsyth  v.  Matthews,  14  Pa.  St.  Ala.  271  ;  Engraham  v.  Pate,  51  Ga. 

100 ;    Bumpas   v.    Dotson,  7   Humph.  537 ;    Sherman   v.    Hogland,   73    Ind. 

(Tenn.)  310 ;  Shearon  v.  Henderson,  38  473  ;  Moog  v.  Farley,  79  Ala.  246. 

Tex.  250 ;  W^ilson  v.  Lott,  5  Fla.  305  ;  •*  Marshall  v.  Croom,  60  Ala.  121 ; 

Bowman   v.    Houdlette,  18   Me.   245  ;  Fisher  v.  Shelver,  53  Wis.  501  ;  Seitz 

Tyberandt  v.  Raucke,  96  111.  71  ;  Pu-  v.  Mitchell,  94  U.  S.  580;   Simms  v. 

sey  V.  Gardner,  21  W.  Va.  477  ;  Linin-  Morse,  4  Hughes  582  ;  Fisher  v.  Her- 

ger  V.  Herron,  18  Neb.  452.  ron,  22  Neb.  185  ;  Bartlett  v.  Chees- 

*  Shearon  v.  Henderson,  38  Tex.  brough,  23  Neb.  771.  Mr.  May  says  : 
251;  Fleischer  v.  Dignon,  53  Iowa  "  A  settlement  or  other  conveyance  in 
288  ;  Wheelden  v.  Wilson,  44  Me.  1 1  ;  favor  of  a  near  relative  is  open  to  more 
S.  P.  Demarest  v.  Terhune,  18  N.  J.  Eq.  suspicion  than  one  to  a  mere  stranger, 
49 ;  Low  V.  Wortman,  44  N.  J.  Eq.  193.  inasmuch  as  it  is  more  likely  to  be  in- 

^  Coley  V.  Coley,  14  N.  J.  Eq.  350.  tended,  not  as  a  real  transfer  of  prop- 

*  Shultz  V.  Hoagland,  85  N.  Y.  468  ;  erty  by  which  the  donor  puts  it  out  of 
S.  P.  Clark  V.  Krause,  2  Mackey  (D.  C.)  his  own  reach,  but  a  feigned  and  coUu- 
566.  See  Renney  v.  Williams,  89  Mo.  sive  arrangement  by  which  it  is  secretly 
145.  understood  that  the  donee  shall  hold 


§   242  RELATIONSHIP.  343 

to  raise  a  presumption  of  fraud.'  It  may  be  considered, 
with  the  other  facts,  by  the  jury,^  and  rather  tends  to  aid  tlie 
creditors,^  for  it  is  regarded  as  highly  probable  that  a  party 
intending  to  perpetrate  a  fraud,  would  look  for  aid  and  con- 
nivance to  a  relative  rather  than  to  a  stranger.  When  rela-i 
tionship  is  coupled  with  secrecy  in  the  transaction,  it  pa)y 
unless  explained  or  justified,  be  regarded  as  fraudulent. CThe 
same  rule  applies  when  the  transfer  conveys  the  debtor's 
entire  estate,  and  other  badges  accompany  it.^  It  may  be 
observed  here  that  the  fact  that  the  creditors  who  obtained 
judgments  by  confession  bore  intimate  relations  to  the 
debtors,  the  delay  in  the  levy  of  the  execution,  the  unusual 
time  and  order  under  which  the  assignee  took  possession, 
and  the  agency  of  the  same  attorney  in  all  the  proceedings, 
though,  perhaps,  casting  suspicion  upon  the  proceedings, 
are  not  in  themselves  sufficiently  strong  to  sustain  an  im- 
putation of  bad  faith,  or  a  charge  of  fraudulent  preference.^ 
We  may  here  advert  to  the  rule  of  the  common  law  that  a 
debtor  has  a  right  to  prefer  one  class  of  creditors  to  an- 
other, and  that  it  is  error  "  to  encourage  a  jury  to  take  into 
consideration  the  exercise  of  this  right  as  '  a  circumstance 
of  suspicion'  in  deciding  upon  the  fairness  of  the  transfer.""^ 
The  case  of  Salmon  v.  Bennett^  has  exerted  a  potent  in- 
fluence over  decisions  in  this  country  concerning  voluntary 
conveyances.  In  the  course  of  the  opinion  Swift,  C.  J., 
said  :^  "  Merc  indebtedness  at  the  time  will  not,  in  all  cases, 
render  a  voluntary  conveyance  void  as  to  creditors,  where 


the  property  against  the  claims  of  cred-  "•  Reiger  v.  Davis.  67  N.  C.  189. 

itors  or  purchasers,  and  still   let  the  »  Embury  v.    Klemm,  30   N.  J.  Eq. 

donor  receive  benefits  from  it."    May's  523 ;     Johnston     v.    Dick,     27     Miss. 

Fraudulent  Conveyances,  p.  236.  277. 

'  King  V.  Russell,  40  Tex.  132  ;  Mar-  *  Baldwin  v.  Freydendall,  10  Bradw. 

shall  V.  Croom,  60  Ala.  121.  (111.)  107. 

*  Engraham    v.    Pate.    51    Ga.    537  ;  '  Born  v.  Shaw,  29  Pa.  St.  292. 

Burton  v.  Boyd,  7  Kans.  17.  "  I  Conn.  525.    See  24  Am.  Law  Reg. 

»  Demarest  v.  Terhune,  18  N.  J.  Eq.  N.  S.  496. 

49.  '  Salmon  v.  Bennett, i  Conn.  525,  542. 


344 


PRIMA    FACIE    CASES    OF    FRAUD. 


§   243 


it  is  a  provision  for  a  child  in  consideration  of  love  and 
affection  ;  for  if  all  gifts  by  way  of  settlement  to  children, 
by  men  in  affluent  and  prosperous  circumstances,  were  to 
be  rendered  void  upon  a  reverse  of  fortune,  it  would  in- 
volve children  in  the  ruin  of  their  parents,  and  in  many 
cases  might  produce  a  greater  evil  than  that  intended  to  be 
remedied."  This  rule  has  been  applied  to  conveyances  to 
wives,^  as  well  as  to  children,^  grandchildren,^  and  other 
near  relatives.* 

§  243.  Prima  facie  cases  of  fraud. — Taking  a  deed  for  prop- 
erty in  the  name  of  the  wife,  which  property  was  purchased 
and  paid  for  by  the  husband,  who  was  involved  in  debt  at 
the  time,  was  said  to  make  a  prima  facie  case  of  fraud 
against  creditors.^  In  Purkitt  v.  Polack^  the  court  ob- 
served :  "  The  control  of  the  property  after  the  alleged 
sale,  the  indebtedness  of  the  grantor  at  the  time,  the  ab- 
sence of  the  grantee  from  the  State,  and  the  failure  on  the 
part  of  the  latter  to  show  any  payment  of  consideration, 


1  See  Clayton  v.  Brown,  17  Ga.  217 ; 
S.  C.  again  30  Ga.  490  ;  Weed  v.  Davis, 
25  Ga.  684;  Goodman  V,  Wineland,  18 
Reporter  (Md.)  622  ;  Kipp  v.  Hanna, 
2  Bland  Ch.  (Md.)  26  ;  Filley  v.  Regis- 
ter, 4  Minn.  391  ;  Walsh  v.  Ketchum, 
12  Mo.  App.  580;  Patten  v.  Casey, 
57  Mo.  118;  Potter  v.  McDowell,  31 
Mo.  62  ;  Amnion's  Appeal,  63  Pa.  St. 
284 ;  Carl  v.  Smith,  8  Phila.  (Pa.) 
569 ;  Perkins  v.  Perkins,  i  Tenn.  Ch. 
537 ;  Yost  V.  Hudiburg,  2  Lea  (Tenn.) 
627  ;  Morrison  v.  Clark,  55  Texas  437  ; 
Belt  V.  Raguet,  27  Texas  471  ;  Smith 
V.  Vodges,  92  U.  S.  183 ;  Lloyd  v.  Ful- 
ton, 91  U.  S.  479;  French  v.  Holmes, 
67  Me,  186  ;  Winchester  v.  Charter,  12 
Allen  (Mass.)  606. 

^  See  Dodd  v.  McCraw,  8  Ark.  83  ; 
Smith  V.  Yell,  8  Ark.  470 ;  Clayton  v. 
B'own,  17  Ga.  217;  Patterson  v.  Mc- 
Kinney,  97  111.  41  ;  Worthington  v.  Bul- 
litt, 6  Md.  172 ;  Worthington  v.  Shipley, 


5  Gill  (Md.)  449;  Smith  v.  Lowell,  6 
N.  H.  67 ;  Brice  v.  Myers,  5  Ohio  121  ; 
Crumbaugh  v.  Kugler,  2  Ohio  St.  373 ; 
Grotenkemper  v.  Harris,  25  Ohio  St. 
510;  Miller  v.  Wilson,  15  Ohio  108; 
Posten  V.  Posten,  4  Whart.  (Pa.)  27 ; 
Chambers  v.  Spencer,  5  Watts  (Pa.) 
404 ;  Mateer  v.  Hissim,  3  P.  &  W. 
(Pa.)  160 ;  Burkey  v.  Self,  4  Sneed 
(Tenn.)  121 ;  Hinde's  Lessee  v.  Long- 
worth,  II  Wheat.  199;  Brackett  v. 
Waite,  4  Vt.  389 ;  S.  C.  6  Vt.  41 1 ; 
Church  V.  Chapin,  35  Vt.  223 ;  Lerow 
V.  Wilmarth,  9  Allen  (Mass.)  386 ; 
Laughton  v.  Harden,  68  Me.  208 ;  Ste- 
vens V.  Robinson,  72  Me.  381. 

'  Bird  V.  Bolduc,  i  Mo.  701  ;  Will- 
iams V.  Banks,  11  Md.  198. 

^  Pomeroy  v.  Bailey,  43  N.  H.  118. 
See  24  Am.  Law  Reg.  N.  S.  497. 

*  Alston  V.  Rovvles,  13  Fla.  117. 

«  17  Cal.  327-332. 


§  243         PRIMA  FACIE  CASES  OF  FRAUD.  345 

were  amply  sufficient  to  raise  a  prima  facie  intendment  of 
fraud  in  the  transaction."  In  Reiger  v.  Davis ^  the  court 
remarked  that  when  a  much-embarrassed  debtor  conveyed 
property  of  great  value  to  a  near  relative,  and  the  transac- 
tion was  secret,  no  one  being  present  to  witness  it  but  rel- 
atives, it  was  to  be  regarded  as  fraudulent.  In  Wilcoxen 
V.  Morgan '^  the  court  said  that  in  addition  to  the  evidence 
of  certain  declarations  made  at  the  time  of  the  preparation 
of  the  conveyance,  "the  relationship  of  the  parties;  the 
fact  that  the  conveyance  was  made  without  the  knowledge 
of  the  grantee  ;  the  absence  of  consideration,  and  the  sub- 
sequent long-continued  possession  and  dominion  of  the 
premises  by  the  grantor,  sufficiently  manifest  that  the  pur- 
pose of  G.  in  this  conveyance  was  to  put  the  estate  beyond 
the  reach  of  his  creditors."  When  it  appeared  that  after 
the  conveyance  the  debtor  had  no  other  property  subject 
to  execution,  that  the  grantee  was  his  brother  and  had  not 
means  sufficient  to  enable  him  to  pay  for  the  property,  that 
the  debtor  remained  in  possession  and  the  grantee  removed 
out  of  the  State,  these,  and  certain  admissions  of  the  cov- 
inous nature  of  the  transfer,  were  considered  sufficient  to 
show  that  the  conveyance  was  made  to  protect  the  prop- 
erty from  creditors.^  In  Danby  v.  Sharp ^  it  is  said  that  a 
sale  of  an  entire  stock-in-trade  to  a  clerk  in  the  employ- 
ment of  the  vendor,  is  colorable  and  fraudulent  as  to  the 
creditors  of  the  vendor,  when  the  vendee  has  no  means, 
except  that  he  receives  ten  dollars  a  week  for  his  services, 
and  where  he  pays  nothing  at  the  time  of  the  sale,  but  gives 
his  unsecured  promissory  notes  for  the  whole  amount  of 
the  purchase-money,  and  no  public  notice'  is  given  of  the 
change,  but  the  business  sign  remains  the  same,  and  the 
vendor  is  frequently  about  the  premises.  In  Moore  v. 
Roe  ^  the  court  held  that  the  transfer  of  all  a  debtor's  prop- 


'67N.  C.  186.  *  2  MacAr.  (D.  C.)  435- 

•^  2  Col.  477,  478.  '  35  N.  J.  Eq.  90. 

*  McDonald  v.  Farrell,  60  Iowa  337. 


346  COMMENTS.  §   244 

erty  pending  a  suit  against  him;  the  taking  of  an  absolute 
deed  as  security  for  money  owing  by  the  debtor,  and  loose- 
ness or  incorrectness  in  stating  the  consideration  of  the 
conveyance,  or  in  determining  the  value  of  the  property 
conveyed,  were  indications  of  fraud. 

The  further  multiplication  of  these  illustrations  is  a  work 
of  doubtful  utility.  Indeed  the  resources  of  fraudulent 
debtors  are  too  great,  the  color  and  variety  of  the  devices 
to  elude  creditors  too  numerous,  to  render  classification  of 
the  different  schemes  practicable.  It  is  to  be  noticed  that 
the  illustrations  last  given  combine  different  badges  of  fraud, 
and  it  is  very  common  in  creditors'  suits  to  find  many  of 
these  indicia  existing  in  a  single  case. 

§  244.  Comments. — Frequent  comment  is  made  upon  the 
extreme  difficulty  of  the  task  of  defining  and  establishing 
fraud,  and  it  seems  to  be  regarded  as  impossible  to  formu- 
late exact  rules  as  to  what  is  and  what  is  not  fraud.  "  To 
do  so  would  be  to  give  to  persons  fraudulently  inclined  the 
power  of  evading  the  jurisdiction  of  the  courts  by  fresh 
contrivances  which  might  be  invented  to  elude  any  in- 
variable, inflexible  rule."^  "As  to  relief  against  frauds," 
says  Hardwicke,  "  no  invariable  rules  can  be  established. 
Fraud  is  infinite,  and  were  a  court  of  equity  once  to  lay 
down  rules  how  far  they  would  go,  and  no  further,  in  ex- 
tending their  relief  against  it,  or  to  define  strictly  the 
species  or  evidence  of  it,  the  jurisdiction  would  be  cramped 
and  perpetually  eluded  by  new  schemes,  which  the  fertility 
of  man's  invention  would  contrive."  Vice-Chancellor  Kin- 
dersley  expressed  the  modern  doctrine  in  these  terms  :  "  It 
was  at  one  time  attempted  to  lay  down  rules  that  particular 
things  were  indelible  badges  of  fraud,  but  in  truth,  every 
case  must  stand  upon  its  own  footing,  and  the  court  or  the 
jury  must  consider  whether,  having  regard  to  all  the  cir- 


'  May's  Fraudulent  Conveyances,  p.  80;  Parke's  History  of  Court  of  Chan- 
cery, p.  508.     See  §  13  and  note. 


§  244  COMMENTS.  347 

cumstances,  the  transaction  was  a  fair  one,  and  intended  to 
pass  the  property  for  a  good  and  valuable  consideration."  ^ 
In  Jones  v.  Nevers,^  Allen,  C.  J.,  said  :  "  Every  case  must 
stand  on  its  own  footing."  But  this  leads  to  unsatisfac- 
tory and  uncertain  results.  The  profession  are  not  given 
sufficient  fixed  rules  with  which  to  guide  their  actions,  or 
advise  clients,  and  must  resort  to  the  wilderness  of  single 
instances  contained  in  the  reports  to  discover  analogous 
cases.  The  courts  protest  that  it  is  not  permissible  to  guess 
at  the  truth  in  the  discovery  of  fraud  ;  that  fraud  must  be 
proved  and  not  presumed,  and  that  speculative  inferences 
are  not  the  proper  foundation  of  a  legal  judgment.^  Vet 
the  most  casual  reading  of  many  reported  decisions  will 
demonstrate  that  transfers  of  property  have  been  avoided, 
especially  in  equity,  upon  the  most  shadowy  and  intangible 
grounds,  and  that  in  many  instances  innocent  purchasers 
have  been  the  victims  of  unfortunate  circumstances.  That 
on  the  other  hand,  fraudulent  alienees  have  constantly  es- 
caped the  meshes  of  the  law,  and  secured  their  ill-gotten 
gains,  though  the  defrauded  creditors  were  inwardly  con- 
scious of  the  fraud  which  they  were  powerless  to  prove,  is 
a  matter  of  common  experience.  The  impulse  "to  color 
more  strongly  the  constructive  indications  of  fraud,  for 
the  protection  of  valuable  rights,"  is  to  be  encouraged. 
The  degrees  of  weight  to  be  attached  to  particular  classes 
of  indicia  should  be  carefully  considered,  for,  in  the  pres- 
ent aspect  of  the  law,  the  marks  of  fraud,  which  assume 
such  prominence  in  this  class  of  litigation,  often,  like  a 
two-edged  sword,  injure  both  creditors  and  bona  Jide 
alienees. __^ 

'  Hale  V.  Metropolitan  Omnibus  Co.,        '  i8  New  Brunsw.  629. 
28  L.  J.  Ch.  -m.  '  See  §§  5,  6. 


CHAPTER    XVII. 


CHANGE    OF    POSSESSION DELIVERY. 


§  245.  Concerning  possession. 

246.  Chang-e  of  possession. 

247.  Possession  as  proof  of  fraud. 

248.  Transfers  presumptively  or  pri- 

jna  facie  fraudulent. 

249.  The  New  England  cases. 

250.  Rule  in  New  York  and  various 

other  States. 

251.  Fraudulent  per  se    or   conclu- 

sive. 

252.  Practical  results  of  the  conflict- 

ing policies. 

253.  Actual  change  of  possession  re- 

quired. 

254.  Question  for  the  jury. 

255.  Overcoming  the  presumption. 

256.  Possession  within  a  reasonable 

time. 


§  257.  Change   of  possession  must  be 
continuous. 

258.  Temporary  resumption   of  pos- 

session. 

259.  Concurrent    possession    insuffi- 

cient. 

260.  Possession  of  bailee. 

261.  No  delivery  where  purchaser  has 

possession. 

262.  When  technical  delivery  is  not 

essential. 

263.  Excusing  want  of  change  of  pos- 

session. 

264.  Change  of  possession  of  realty. 

265.  Change  of  possession  on  judicial 

sale. 

266.  Delivery  of  growing  crops. 

267.  Possession  with  power  of  sale. 


"  By  the  possession  of  a  thing  we  always  conceive  the  condition  in  which  not  only  one's  own 
dealing  with  the  thing  is  physically  possible,  but  every  other  jserson's  dealing  with  it  is  capable 
of  being  excluded." — Von  Savigny^s  Treatise  on  Possession,  treinslated  by  Sir  Erskine  Perry, 
p.  2. 

§  245.  Concerning  possession. — Possession,  or  "  the  own- 
ing or  having  a  thing  in  one's  own  power,"  ^  with  the  right 
to  deal  with  it  at  pleasure,  to  the  exclusion  of  others,'^  is 
said  to  be  a  degree  of  title,  although  the  lowest.^  The  ef- 
fect of  a  failure  to  change  possession,  more  especially  as 
relating  to  sales  of  personalty,  will  be  found  upon  investi- 
gation to  occupy  a  very  prominent  place  in  the  law  regu- 
lating fraudulent  conveyances.  Indeed,  some  of  the  writers 
seem  to  lose  sight  of  the  other  characteristics  of  Twyne's 


'  Brown  v.  Volkening,  64  N.  Y.  80. 
Compare  Pope  v.  Allen,  90  N.  Y.  298. 
'  Sullivan  v.  Sullivan,  66  N.  Y.  41. 


^  Swift  V.  Agnes,  33  Wis.  240  ;  Raw- 
ley  V.  Brown,  71  N.  Y.  85  ;  Mooney  v. 
Olsen,  21  Kans.  691. 


§  245  CONCERNING    POSSESSION.  349 

Case,^  and  treat  the  question  of  the  failure  to  change  pos- 
session of  the  property  as  not  only  the  controlling  but  the 
exclusive  feature  of  the  case.  In  Twyne's  Casc^  the  court 
said  :  "  The  donor  continued  in  possession  and  used  the 
goods  as  his  own,  and  by  reason  thereof  he  traded  and 
trafficked  with  others,  and  defrauded  and  deceived  them."^ 
Hence  Coke,  in  commenting  upon  this  case,  gives  the  fol- 
lowing advice  to  a  donee:  "Immediately  after  the  gift 
take  possession  of  the  goods,  for  continuance  of  possession 
in  the  donor  is  a  sign  of  trust."  It  will  be  at  once  manifest 
from  this  statement  that  the  modern  law  upon  the  subject 
must  have  undergone  a  very  material  change  since  Coke 
wrote,  for  the  failure  to  consummate  the  sale  or  gift  by 
change  of  possession  was  then  considered  to  be  merely  a 
mark,  sign,  or  badge  of  fraud.^  We  cannot  but  regard  this 
feature  of  the  law  as  occupying  too  prominent  a  place,  and 
as  receiving  too  great  attention  as  applied  to  transactions 
which  it  is  sought  to  annul  as  fraudulent  under  the  statute 
of  Elizabeth.^  The  theory  is.  that  a  sale  or  gift  unaccom- 
panied by  possession  is  not  apparent  to  third  parties,  but 
on  the  contrary  is  contradicted  by  the  continued  visible 
possession  of  the  vendor.  Yet,  in  the  case  of  bailments  in 
their  many  forms,  the  possession  is  held  by  parties  who  are 
not  the  owners,  but  this  feature  of  the  relationship  is  not 


'  See  §  22.  deceive  and  to  defraud  creditors  and 

"^  3  Rep.  80,  8ia.  purchasers;    and  the  law  always  pre- 

^  See  Putnam  v.  Osgood,  52  N.  H.  sumes,  even  in  criminal  matters,  that 

156;   Wright  V.  McCormick,   67    Mo.  a  person  intends  whatever  is  the  natural 

430;    Barr   v.    Reitz,    53    Pa.  St.  256;  and  probable  consequence  of  his  own 

Manton  v.   Moore,    7  T.  R.  72  ;   also  actions."     Griswold    v.  Sheldon,  4  N. 

Twyne's  Case,  i  Smith's  Lea.  Cas.  i  ;  Y.  593.     For  exceptions  to  the  general 

"  Sales  and  Conveyances  without  De-  rule  see  Bissell  v.  Hopkins,  3  Cow.  (N. 

livery  of    Possession,"    18   Am.    Law  Y.)  166,  tn  notis. 

Reg.  (N.  S.)  137.     See  §  22.  '  In  Davis  v.  Turner,  4  Gratt.  (Va.) 

■•"The  statute  does  not  introduce  a  441,  tiie  court  observed:  "The   truth 

new  rule,  nor  does  it  make  a  forced  or  is,  there  is  something  rather  loose  and 

unnatural    presumption.      The    direct  indefinite   in    the    idea   of  a    delusive 

tendency   of  a   conveyance    of   goods  credit  gained  by  the  possession  of  per- 

without  a  change  of  possession  is  to  sonal  property." 


350  CONCERNING    POSSESSION.  §  245 

regarded  as  giving  rise  to  any  presumption  of  fraud.  Any 
one  can  safely  put  his  personal  property  in  another's  pos- 
session, or  give  another  the  use  of  it,  without  imperilling 
his  title.^  It  is  said  that  "  the  possession  of  property  never 
owned  by  the  possessor  raises  no  ...  .  presumption  "  of 
ownership.^  This  surely  is  an  unsatisfactory  explanation 
of  the  distinction.  The  acts  of  ownership  exercised  over 
property  by  a  bailee  and  by  an  owner,  either  before  or  after 
sale,  are  not  necessarily  dissimilar.  Inquiry  in  either  case 
would  generally  be  necessary  to  ascertain  the  status  of  the 
title.  The  exercise  of  these  very  acts  of  ownership  con- 
stitute the  mischief  sought  to  be  obviated  by  the  rule 
calling  for  change  of  possession.  Chattels  are  not  nego- 
tiable. Possession  is  not,  as  in  the  case  of  mercantile  paper 
and  money,  an  assurance  of  title,  or  of  authority  or  power 
of  disposition.  "The  servant,"  said  Woodruff,  J.,  "in- 
trusted with  the  possession  of  his  master's  property,  does 
not  thereby  get  authority  to  sell  it,  or  to  authorize  another 
to  sell  it.  The  borrower  of  a  chattel,  or  the  ordinary 
bailee,  does  not,  by  his  possession,  gain  any  such  power."  ^ 
A  man  cannot  be  deprived  of  his  property  without  his 
consent. 

Surely  it  is  obvious  that  to  prohibit  altogether  the  sepa- 
ration of  the  title  from  the  possession  of  personal  property 
would  be  incompatible  with  an  advanced  state  of  society 
and  commerce,  and  productive  of  great  inconvenience  and 


"  Capron  v.  Porter,  43  Conn.  389.  possession  of  property  which  he  had 
Dillon,  J.,  observes,  that  "  the  rule,  de-  sold  or  mortgaged,  and  yet  of  which  he 
ducing  fraud  as  a  conclusion  of  law  retained  the  possession,  enjoyment,  and 
from  the  simple  retention  of  possession  apparent  ownership.  The  statute  of  13 
by  the  vendor  or  mortgagor,  originated  Elizabeth  did  not  declare  that  such  re- 
in England  in  a  very  early  day,  when  tention  would  be  fraudulent.  This  was 
there  were  no  registry  laws,  or  none  a  doctrine  of  the  courts."  Hughes  v. 
requiring  such  instruments  to  be  regis-  Cory,  20  Iowa  402.  See  Bullock  v. 
tered.  It  was  founded  upon  public  Williams,  16  Pick.  (Mass.)  33. 
policy.  That  policy  was  to  prevent  a  *  Capron  v.  Porter,  43  Conn.  389. 
party  from  acquiring  a  false  and  de-  See  Davis  v.  Bigler,  62  Pa.  St.  242. 
ceptive  credit  on  the  strength  of  the  ^  Spraights  v.  Hawley,  39  N.  Y.  446. 


§   246  CHANGE    OF    POSSESSION.  35 1 

injustice  in  the  pursuits  and  business  of  life.^     It  would  be 
"  a  remedy  worse  than  the  disease." 

§  246.  Change  of  possession. — It  is  believed  that  the  rule 
of  the  common  law  had  its  foundation  in  the  doctrine  al- 
ready noticed,  that  possession  of  personal  property  \s prima 
facie  evidence  of  ownership.  To  allow  the  owner  of  such 
property  to  transfer  the  title  by  a  secret  conveyance,  while 
retaining  the  possession  and  assuming  to  act  as  the  owner, 
was  regarded  as  permitting  a  fraud  upon  all  persons  who 
should  deal  with  him  upon  the  faith  of  his  ownership. 
As  we  have  said,  the  theory  was  that  his  possession  and 
apparent  ownership  gave  him  credit,  and.  afforded  him  the 
means  of  defrauding  others.^  An  agreement  to  let  a  ven- 
dor retain  the  possession  and  use  of  the  property  after  an 
absolute  sale  is  not  considered  to  be  a  common  and  ordi- 
nary transaction  in  the  usual  course  of  business.  Such  an 
arrangement,  it  is  urged,  excites  suspicion,  and  it  is  re- 
garded in  many  of  the  cases  as  the  bounden  duty  of  the 
courts,  for  the  safety  and  protection  of  creditors,  to  call 
upon  and  hold  the  vendee  in  all  such  cases,  to  explain 
clearly  and  satisfactorily  how  an  absolute  sale  could  have 
been  bona  fide,  and  yet  the  vendor  retain  the  use  and  pos- 
session.^ 

'  Davis  V.  Turner,  4  Gratt.  (Va.)  441.  the   usual  course  of  dealing,  and  re- 

'  See  Crooks  V.  Stuart,  2  McCrary,  1 5.  quires     a     satisfactory     explanation." 

"The  controlling  argument,  ....  is  Again  it  is  observed:    "Retention  of 

the  danger  of  false  credit  and  fraudu-  possession  not  only  tends  to  give  false 

lent  evasion  of  debt  whenever  delivery  credit  to  the  seller,  but  it  is  a  sign  of  a 

and  change  of  possession  do  not  ac-  secret  trust  in   his  favor."     Brawn  v. 

company  and  follow  change  of  property  Keller,  43  Pa.  St.  106. 

whether    absolute    or    qualified,"   per  ^  Coburn  v.  Pickering,  3  N.  H.  427. 

Verplanck,  Senator,  in  Cole  v.  White,  It  must  be  remembered   that,  by  the 

26  Wend.  (N.  Y.)  523.     Chief-Justice  common  law,  delivery  was  not  consid- 

Kent  said,  in  Sturtevant  v.  Ballard,  9  ered  necessary  upon  a  sale  of  chattels 

Johns.  (N.  Y.)  337,  339:   "Delivery  of  to  vest  the  title  in  the  vendee,  (Miller 

possession  is  so  much  of  the  essence  of  ads.  Pancoast.  29  N.  J.  Law  253;  Fra- 

the  sale  of  chattels  that  an  agreement  zier  v.  Fredericks,  24  N.J.  Law  169; 

to  permit  the  vendor  to  keep  posses-  Meeker  v.  Wilson,  i  Gall.  424  ;  Mon- 

sion  is  an  extraordinary  exception  to  roe  v.  Hussey,  i  Oreg.  190;    Davis  v. 


352 


POSSESSION    AS    PROOF    OF    FRAUD. 


§   247 


Such  is  the  general  condition  of  the  law  relating  to  this 
branch  of  the  subject,  whatever  may  be  the  force  of  the 
criticisms  suggested.  The  subject  by  reason  of  its  promi- 
nence calls  for  consideration  somewhat  in  detail,  and  for  a 
discussion  of  the  many  exceptions,  real  and  apparent,  to 
the  general  rule  arising  from  the  necessities  incident  to 
particular  cases  and  from  other  causes.* 

§  247.  Possession  as  proof  of  fraud. — As  we  shall  presently 
show.  It  is  commonly  stated  in  some  of  the  reports  that  the 
continued  possession  of  the  subject-matter  of  the  sale  by 
the  grantor  or  vendor  is  prima  facie  evidence  of  fraud, 
while  other  authorities  regard  it  as  conclusive  proof  that 
the  transaction    is   covinous.     A  learned  writer^  has  de- 


Tumer,  4  Gratt.  [Va.]  426,)  as  between 
the  parties.  Philbrook  v.  Eaton,  134 
Mass.  398,  400;  Parsons  v.  Dickinson, 
1 1  Pick.  (Mass.)  352  ;  Packard  v.  Wood, 
4  Gray  (Mass.)  307. 

'  Mr.  May  says  in  his  treatise  on 
Fraudulent  Conveyances,  2d  ed.,  p.i  18  : 
"  It  by  no  means  follows,  though,  that  be- 
cause there  is  no  possession  given  there- 
fore a  transfer  is  fraudulent :  for  those 
cases  where  the  judges  have  said  that 
if  possession  was  not  given  it  was 
fraudulent  (Edwards  v.  Harben,  2  T. 
R.  587;  Wordall  v.  Smith,  i  Campb. 
332 ;  Macdona  v.  Swiney,  8  Ir.  C.  L.  R. 
86)  must  be  taken  with  reference  to 
the  circumstances  of  each  case.  The 
question  of  possession  is  one  of  much 
importance,  but  that  is  with  a  view  to 
ascertain  the  good  or  bad  faith  of  the 
transaction  (Abbott,  C.  J.,  in  Latimer 
V,  Batson,  4  B.  &  C.  652 ;  and  see 
Arundell  v.  Phipps,  10  Ves.  139;  Kidd 
V.  Rawlinson,  2  B.  &  P.  59;  Hoffman 
V.  Pitt,  5  Esp.  22,  25 ;  Eastwood  v. 
Brown,  Ry.  &  Mood.  312).  In  Arun- 
dell V.  Phipps  (10  Ves.  139,  145),  Lord 
Eldon  said  that  the  mere  circumstance 
of  the  possession  of  chattels,  however 


familiar  it  might  be  to  say  that  it 
proves  fraud,  amounts  to  no  more  than 
that  it  \^  prima  Jacie  evidence  of  prop- 
erty in  the  man  possessing,  until  a  title 
not  fraudulent  is  shown  under  which 
that  possession  has  followed ;  that  every 
case,  from  Twyne's  Case  (3  Rep.  80  b ; 
see  the  remarks  of  Littledale,  J.,  in 
Martindale  v.  Booth,  3  B.  &  Ad.  498, 
505)  downwards,  supports  that,  and 
there  was  no  occasion  otherwise  for  the 
statute  of  King  James  (21  Jac.  i  C.  19, 
§§  10,  II,  which  originated  the  law 
with  respect  to  property  remaining  in 
the  reputed  ownership  or  order  and 
disposition  of  a  bankrupt).  There  is 
no  sufficient  authority  for  saying  that 
the  want  of  delivery  of  possession  makes 
void  a  bill  of  sale  of  goods  and  chat- 
tels ;  it  is  prima  facie  evidence  of  a 
fraudulent  intention,  and  if  it  be  a 
badge  of  fraud  only,  in  order  to  ascer- 
tain whether  a  deed  be  fraudulent  or 
not,  all  the  circumstances  must  be 
taken  into  consideration.  (Per  Patte- 
son,  J.,  in  Martindale  v.  Booth,  3  B.  & 
Ad.  498,  587)." 

-  Possession  as  Evidence  of  Fraud, 
II  Cent.  L.  J.  21. 


§   248  FRAUDULENT    TRANSFERS.  353 

clared  this  to  be  a  loose  method  of  referring  to  the  matter, 
and  has  ventured  to  assert  that  "  a  careful  examination  of 
this  branch  of  the  law  will  show  that  neither  of  the  views 
so  expressed  is  correct."  The  argument  advanced  by  the 
writer  is  that  bald  possession  is  not  conclusive  evidence  of 
fraud  ;  it  is  only  a  circumstance  admissible  in  evidence  with 
other  circumstances  as  bearing  upon  the  question  of  the 
actual  existence  of  fraud.  The  conclusion  drawn  in  the 
article  mentioned  is  that  "  possession  is  a  link  in  a  chain 
of  circumstances,  pertinent  in  proving  fraud,  having  greater 
or  less  weight  according  to  the  circumstances  of  each  case," 
and  "  is  not  necessarily  either  conclusive  or  prima  facie 
evidence  of  fraud."  Some  accompanying  circumstances 
attending  the  possession  or,  so  to  speak,  coloring  it  must 
be  shown  to  establish  fraud. 

The  statutory  policy  introduced  in  several  of  the  States, 
under  which  a  failure  to  effect  a  change  of  possession  is 
made  either  presumptively  or  conclusively  fraudulent,  has 
robbed  the  question  of  much  of  its  importance.  We  can- 
not but  regard  the  theory  advanced  by  this  writer  as  sound, 
but  we  fail  to  discover  that  the  cases  fully  support  it. 

§  248.  Transfers  presumptively  or  prima  facie  fraudulent. — 
The  question  of  how  far  retention  of  possession  (»f  the 
property  by  the  vendor  is  to  be  considered  as  evidence  of 
fraud  in  its  sale  has  been  a  subject  of  much  consideration 
by  the  courts  and  in  legislative  bodies  in  tlie  United 
States.^  In  some  States  the  matter  is  regulated  by  statute, 
but  the  statutes  and  the  rules  for  their  interpretation  vary 
in  the  different  States.  In  other  States  the  question  is  left 
to  be  disposed  of  by  the  rules  and  principles  which  obtain 
at  common  law.  The  general  subject  is  capable  of  ex- 
tended discussion  both  because  of  its  importance  and  for 


'  It  must  be  remembered  that  "the  changed  possession  draws  no  distinc- 

statute  with  its  presumptions  founded  lion  between  modes  of  transfer. "  Stim- 

upon     non-delivery    and     absence    of  son  v.  Wrigley,  86  N.  V.  337. 
23 


354 


THE    NEW    ENGLAND    CASES. 


§   249 


the  reason  that  the  authorities  relating  to  it  are  full  of 
subtle  distinctions.  We  can  only  consider  its  general  out- 
lines and  notice  the  leading  cases  and  the  important  ex- 
ceptions to  the  general  rule  in  the  principal  States.  The 
struggle  is  between  two  policies  and  rules  of  evidence  or 
proof,  viz. :  whether  the  neglect  to  change  possession  of 
the  property  shall  be  considered  presumptively  or  conclu- 
sively fraudulent  as  to  creditors.  The  prevalent  policy  is 
to  consider  the  absence  of  a  change  of  possession  as  prima 
facie  or  presumptive  evidence  of  fraud.^ 

§  249.  The  New  England  cases. — The  cases  supporting 
the  former  theory  will  be  first  noticed,  giving  brief  quota- 
tions from  leading  authorities.  In  Massachusetts,  "  posses- 
sion of  the  vendor  is  only  evidence  of  fraud,  which,  with 
the  manner  of  the  occupation,  the  conduct  of  the  parties, 
and  all  other  evidence  bearing  upon  the  question  of  fraud, 
is  for  the  consideration  of  the  jury."^     In  New  Hampshire 


'  See  Crawford  v,  Kirksey,  55  Ala. 
300  ;  Mayer  v.  Clark,  40  Ala.  259 ; 
Vredenbergh  v.  White,  i  Johns.  Cas. 
(N.  Y.)  1 56 ;  Beals  v.  Guernsey,  8 
Johns.  (N.  Y.)  446;  Barrow  v.  Pax- 
ton,  5  Johns.  (N.  Y.)  258.  In  Bissell 
V.  Hopkins,  3  Cow.  (N.  Y.)  166,  188, 
Savage,  Chief-Justice,  said  :  "  The  pos- 
session by  the  vendor  of  personal  chat- 
tels after  the  sale  is  not  conclusive  evi- 
dence of  fraud.  The  vendee  may,  not- 
withstanding, upon  proof  that  the  sale 
was  bo}ia  fide  and  for  a  valuable  con- 
sideration, and  that  the  possession  of 
the  vendor  after  such  sale  was  in  pur- 
suance of  some  agreement  not  incon- 
sistent with  honesty  in  the  transaction, 
hold  under  his  purchase  against  cred- 
itors." See  Davis  v.  Turner",  4  Gratt. 
(Va.)  422,  where  the  doctrine  of  fraud 
per  se  is  examined  and  repudiated. 
See  Fotkner  v.  Stuart,  6  Gratt.  (Va.) 
197  ;  Howard  v.  Prince,  1 1  N.  B.  R.  322. 
'^  Ingcills  V.  Herrick,  108  Mass.  354  ; 
Shurtleff  V.  Willard,  19  Pick.  (Mass.) 


202  ;  Brooks  v.  Powers,  1 5  Mass.  244  ; 
Hardy  v.  Potter,  10  Gray  (Mass.)  89. 
In  Dempsey  v,  Gardner,  127  Mass.  381, 
Gray,  C.  J.,  said  :  "  By  the  law  as  es- 
tablished in  this  commonwealth,  it  was 
necessar}',  as  against  subsequent  pur- 
chasers or  attaching  creditors,  that 
there  should  be  a  delivery  of  the  prop- 
erty. No  such  delivery,  actual  or  sym- 
bolical, was  proved.  The  buyer  did  no 
act  by  way  of  taking  possession  or  ex- 
ercising ownership,  and  the  seller  did 
not  agree  to  hold  or  keep  the  horse  for 

him There  was  no  evidence  of 

delivery  for  the  consideration  of  the 
jury,  except  such  as  might  be  implied 
from  the  execution  and  delivery  of  the 
bill  of  sale.  That  was  not  enough. 
Carter  v.  Willard,  19  Pick.  (Mass.)  i  ; 
Shumway  v.  Rutter,  7  Pick.  (Mass.) 
56,  58  ;  S,  C.  8  Pick.  (Mass.)  443,  447  ; 
Packard  v.  Wood,  4  Gray  (Mass.)  307  ; 
Rourke  v.  Bullens,  8  Gray  (Mass.)  549 ; 
Veazie  v.  Somerby,  5  Allen  (Mass.) 
280,  289." 


§   250  RULE  IN  NEW  YORK  AND  OTHER  STATES.  355 

it  is  said  that  "  in  cases  of  absolute  sales,  possession  and 
use  by  the  vendor,  after  the  sale,  is  T^WAys,  priina  facie,  and, 
if  unexplained,  conclusive  evidence  of  a  secret  trust."  ^  So 
in  Maine  failure  to  change  possession  is  presumptive  evi- 
dence of  fraud,  and  the  jury  are  to  determine  the  good  faith 
of  the  transaction.^  In  Rothchild  v.  Rowe^  the  Supreme 
Court  of  Vermont  said  :  "  The  law  is  well  settled  in  this 
State  that  there  must  be  a  substantial  and  visible  change  of 
possession   to   protect  property  from  attachment    by  the 

creditors  of  the  vendor The  vendee  must  acquire 

the  open,  notorious,  and  exclusive  possession  of  the  prop- 
erty, and  this  implies  that  the  vendor  is  divested  of  the  use, 
possession,  or  employment  of  the  property."^  The  rule 
that  non-delivery  of  possession  is  prima  facie  evidence  of 
fraud  obtains  in  Rhode  Island.^ 

§  250.  Rule  in  New  York  and  various  other  States. — After 
much  fluctuation  and  discussion,  the  general  rule  is  now 
established  by  statute  in  New  York,  that  the  retention  of 
possession  by  the  vendor  is  presumptively  fraudulent.  This 
presumption  may  be  overcome  by  proof  satisfactory  to  a 
jury  that  the  retention  of  possession  was  in  good  faith,  for 
an  honest  purpose,  and  with  no  design  to  defraud  creditors.^ 
If  good  faith  is  established  it  is  not  essential  in  that  State 
to  show  "  a  good  reason  for  the  want  of  change  of  posses- 


'  Coburn  v.  Pickering,  3  N.  H.  428.  Clifford,  54  Vt.  344  ;  Weeks  v.  Pres- 

See  Lang  v.  Stockwell,  55  N.  H.  561  ;  cott,  53  Vt.  57. 

Cutting  V.  Jackson,  56  N.  H.  253  ;  ■■  Sarle  v.  Arnold.  7  R.  I.  582  ;  Mead 
Sumner  v.  Dalton,  58  N.  H.  295;  v.  Gardiner,  13  R.  I.  257.  See  Beck- 
Stowe  V.  Taft,  58  N.  H.  445  ;  Shaw  v.  with  v.  Burrough.  13  R.  L  294  ;  Good- 
Thompson,  43  N.  H.  130.  ell  V.  Fairbrother,  12  R.  L  233.     As  to 

2  Shaw    V.    Wilshire,   65    Me.   485  ;  the  rule  in  Connecticut,  see  §  251. 
Bartlett  v.  Blake,  37  Me.   124  ;   Fair-         *  Ball  v.  Loomis,  29  N.  Y.  412  ;  Mil- 
field  Bridge  Co.  v.  Nye,  60  Me.  372  ;  ler  v.  Lockwood,  32  N.  Y.  293  ;  Ford 
Googins  V.  Gilmorc,  47  Me.  9.  v.  Williams,  24  N.  Y.  359;  Hollacher 

^4  Vt.  389,  393.  V.  O'Brien,  5  Hun  (N.  Y.)  277;  Burn- 

■*  Compare    Kendall    v.    Samson,   12  ham  v.  Brennan,  74  N.  Y.  597  ;  Thomp- 

Vt.  515;  Ridout  V.  Burton,  27  Vt.  383;  son  v.  Rlanchard,  4  N.  Y.  303.     See 

Jewett  V.  Guyer,  38  Vt.  209;  Fish  v.  Mumper  v.  Rushmore,  79  N.  Y.  19. 


356  FRAUDULENT    PER    SE.  §   25 1 

sion,"  ^  which  is  certainly  crowding  the  rule  to  an  extreme 
limit  hostile  to  the  creditor  interests.  The  principle  that 
the  possession  may  be  explained  is  extensively  recognized. 
In  addition  to  the  States  already  named  it  obtains  in  New 
Jersey,^  Virginia,^  Alabama,^  Louisiana,^  Ohio,®  Indiana/ 
Michigan,^  Minnesota,^  Wisconsin,^"  Nebraska,"  Nevada, ^^ 
Arkansas, ^^  Kansas,^"*  and  in  the  Federal  tribunals.^^ 

§  251.  Fraudulent  per  se  or  conclusive. — The  cases  just 
considered  give  what  may  be  termed  the  equitable  and 
charitable  view  of  the  question.  But  the  policy  embodied 
in  many  of  these  cases,  and  in  the  statutes  upon  which  they 
are  in  certain  instances  founded,  is  not  considered  in  some 
of  the  States  rigid  or  severe  enough  to  suppress  the  evils 
engendered  by  this  class  of  transactions.  Thus  in  Con- 
necticut, Loomis,  J.,  in  delivering  the  opinion  of  the  court 
in  the  case  of  Capron  v.  Porter,'^  observed  :  "  That  the  re- 
tention of  the  possession  of  personal  property  by  the  vendor 


'  Mitchell  V.  West,  55  N.  Y.  107  ;  «  Collins    v.    Myers,    16   Ohio    547  ; 

Hanford  v.  Artcher,4  Hill  (N.  Y.)  271.  Thome  v.  Bank,  37  Ohio  St.  254. 

'  Miller  ads.  Pancoast,  29  N.  J.  Law  '  Kane  v.  Drake,  27  Ind.  29 ;  Rose 

253 ;  Sherron  v.  Humphreys,  14  N.  J.  v.  Colter,  76  Ind.  590 ;   New  Albany 

Law   220.     "  The   possession   by   the  Ins.  Co.  v.  Wilcoxson,  21  Ind.  355. 

vendor  of  personal  chattels  after  the  *  Molitor  v.  Robinson,  40  Mich.  200, 

sale  is  not  conclusive  evidence  of  fraud,  per  Cooley,  J. 

The  vendee  may  notsvithstanding,  upon  '  Blackman   v.  Wheaton,   13   Minn, 

proof  that  the  sale  was  bona  fide  and  326;  Benton  v.  Snyder,  22  Minn.  247 ; 

for  a  valuable  consideration,  and  that  Camp  v.  Thompson,  25  Minn.  175. 

the  possession  of  the  vendor  after  sale  '°  Wheeler  v,  Konst,  46  Wis.  398  ; 

was  in  pursuance  of  some  agfreement  Blakeslee  v.  Rossman,  43  Wis.  116; 

not  inconsistent  with  honesty  in  the  Osen  v.  Sherman,  27  Wis.  505. 

transaction,  hold  under  his   purchase  "  Uhl  v.  Robison,  8  Neb.  272  ;  Dens- 

against  creditors."     Miller  ads.  Pan-  more  v.  Tomer,  14  Neb.  392. 

coast,  29  N.  J.  Law  253.  "  Conway  v.  Edwards,  6  Nev.  190. 

2  Howard  v.  Prince,  1 1  N.  B.  R.  322  ;  Compare   Doak  v.  Brubaker,  i    Nev. 

Davis  V.  Turner,  4  Gratt.  (V&.)  423,  a  218. 

leading  case  of  international  repute.  '*  George  v.  Norris,  23  Ark.  128. 

■•  Mayer  v.  Clark,  40  Ala.  259 ;  Craw-  "  Phillips  v,  Reitz,  16  Kans.  396. 

ford  V.  Kirksey,  55  Ala.  282  ;  Moog  v.  '^  Warner  v.  Norton,  20  How.  448. 

Benedicks,  49  Ala.  512.  But  see  Hamilton  v.  Russel,  i  Cranch 

*  Keller  v.  Blanchard,  19  La.  Ann.  310. 

S3  ;  Guice  v.  Sanders,  21  La.  Ann.  463.  '^  43  Conn.  383. 


§   251  FRAUDULENT    PER    SE.  357 

after  a  sale  raises  a  presumption  of  fraud  which  cannot  be 
repelled  by  any  evidence  that  the  transaction  was  bona  fide 
and  for  valuable  consideration,  is  still  adhered  to  and  en- 
forced by  the  courts  in  this  State  with  undiminished  rigor, 
as  a  most  important  rule  of  public  policy.  The  reason  of 
the  rule  is  that  as  against  a  person  who  was  once  the  owner 
of  the  property,  and  all  who  claim  by  purchase  from  him, 
the  continued  possession  is  to  be  regarded  as  a  sure  iji- 
dicium  of  continued  ownership,  and  that  the  possessor 
would  obtain  by  such  continued  possession  a  false  credit 
to  the  injury  of  third  persons,  if  there  was  no  such  rule  to 
protect  them."^  Clow  v.  Woods  ^  is  the  leading  case  in 
Pennsylvania.  Gibson,  J.,  said  :  "  Where  possession  has 
been  retained  without  any  stipulation  in  the  conveyance, 
the  cases  have  uniformly  declared  that  to  be,  not  only  evi- 
dence of  fraud,  but  fraud  per  se.  Such  a  case  is  not  in- 
consistent with  the  most  perfect  honesty  ;  yet  a  court  will 
not  stop  to  inquire  whether  there  be  actual  fraud  or  not ; 
the  law  will  impute  it,  at  all  events,  because  it  would  be 
dangerous  to  the  public  to  countenance  such  a  transaction 
under  any  circumstances.  The  parties  will  not  be  suffered 
to  unravel  it,  and  show,  that  what  seemed  fraudulent  was 
not  in  fact  so."°  In  Born  v.  Shaw**  the  court  observed: 
"  When  possession  is  retained  by  the  vendor,  it  is  not  only 


'Compare    Osborne    v.    Tuller,    14  156;    McKibbin  v.   Martin,  64  Pa.  St. 

Conn.    529;    Norton  v.    Doolittle,    32  352  ;  Carman  v.  Cooper.  72  I'a.  St.  37  ; 

Conn.  405  ;  Elmer  v.  Welch,  47  Conn.  Worman  v.  Kramer,  73  Pa.    St.  378 ; 

56;  Hull  V.  Sigsworth,  48  Conn.  258;  Dawes   v.    Cope,   4   Binn.    (Pa.)  258; 

Hatstat  V.  Blakeslee,4i  Conn.  301  ;  Sey-  Davis  v.  Bigler,  62  Pa.  St.  242  ;  Shaw 

mour  V.  O'Keefe,  44Conn.  128;  Meade  v.  Levy,   17  S.  &  R.  (Pa.)  99;   Bom  v. 

V.  Smith,  16  Conn.  346.     See  especially  Shaw,  29  Pa.  St.  288;  Young  v.  Mc- 

Hamilton   v.    Russel,    i    Cranch    310;  Clure,  2  W.  &  S.  (Pa.)  151.     "  Clow  v. 

and    compare  Warner   v.    Norton,  20  Woods,  5  S.  &  R.  (Pa.)  275,  decided 

How.  448  ;  Gibson  v.  Love,  4  Fla.  217 ;  by  this   court  in    1819.  is  the  magna 

Monroe  v.  Hussey,  i  Oregon  188.  charta  of  our  law  upon  this  subject," 

'  5  S.  &  R.  (Pa.)  280.  per   Sharswood.   J.,    in    McKibbin    v. 

'  See  Thompson  v.  Paret,  94  Pa.  St.  Martin,  64  Pa.  St.  356. 
275 ;    Pearson    v.    Carter,   94   Pa.   St.         *  29  Pa.  St.  292. 


358  CONFLICTING    POLICIES.  §   252 

evidence  of  fraud,  but  fraud  per  se''  In  Maryland^  a  bill 
of  sale  may  be  recorded,  and  the  title  of  the  grantee  is  then 
as  effectually  protected  as  if  the  sale  had  been  accompanied 
by  delivery.^  It  is  a  well-settled  doctrine  in  Kentucky  that 
where  there  is  an  absolute  sale  of  movable  property,  the 
possession  must  accompany  the  title,  or  the  sale  will  be  void 
in  law  as  to  creditors  or  subsequent  purchasers,  even  though 
the  contract  contain  a  stipulation  that  the  vendor  is  to  re- 
tain the  possession  till  a  future  day.^  After  much  conflict,* 
the  rule  seems  to  be  established  in  Missouri  that  a  sale  with- 
out delivery  of  possession  is  conclusively  presumed  to  be 
fraudulent.^  In  Illinois  it  is  fraud/^r  se  to  leave  the  vendor 
in  possession.^  Much  the  same  policy  is  pursued  in  lowa^ 
and  California.^ 

§  252.  Practical  results  of  the  conflicting  policies. — Brush- 
ing aside  for  the  present  the  objections  already  outlined  to 
the  prominence  accorded  the  question  of  change  of  pos- 
session in  controversies  of  the  class  under  consideration,  it 
becomes  important  to  consider  which  of  the  two  rules  just 
instanced  is  the  more  salutary  in  practice.  Possibly  the 
creditor  class  would  oftener  effect  a  recovery  when  the  pre- 
sumption of  fraud  from  failure  to  change  possession  is  ab- 
solute.     It  does  not  follow,  however,  that  the  latter  rule  is 


'  Kreuzer  v.  Cooney,  45  Md.  582.  gert  v.  Borchert,  59  Mo.  80 ;  Wright 

2  Clary  v.  Frayer,  8  G.  &  J.    (Md.)  v.  McCormick,  67  Mo.  426. 

416,     See  Price  v.  Pitzer,  44  Md.  527.  °  Thompson    v.    Yeck,    21    111.    73  ; 

*  Robbins  v.  Oldham,   i  Duv.  (Ky.)  Ticknor  v.    McClelland,   84   111.  471  ; 

28;    Brummel    v.  Stockton,    3    Dana  Rozier  v.  Williams,  92  111.  187;  John- 

(Ky.)  135;   Bradley  v.  Buford,  Sneed  son  v.  Holloway,  82  111.  334;  Richard- 

(Ky.)   12;   Morton  v.  Ragan,  5  Bush  son  v.  Rardin,  88  111.  124 ;  Greenebaum 

(Ky.)  334.     See  Cummins  v.  Griggs,  2  v.  Wheeler,  90  111.  296  ;  Hart  v.  Wing, 

Duvall  (Ky.)  87.  44  111.  141. 

■*  See  Claflin  v.  Rosenberg,  42  Mo.  '  Prather  v.    Parker,    24   Iowa    26  ; 

448  ;  Rocheblave  v.  Potter,  i  Mo.  561 ;  Boothby  v.  Brown,  40  Iowa  104  ;  Hes- 

Foster  v.  Wallace,  2  Mo.  231  ;  Sibly  v.  ser  v.  Wilson,  36  Iowa  152  ;  Sutton  v. 

Hood,  3  Mo.  290;    King  v.  Bailey,  6  Ballou,  46  Iowa  517. 

Mo.  575  ;  Shepherd  V.  Trigg,  7  Mo.  151.  'See    Lay  v.   Neville,  25  Cal.  552; 

^  Claflin  V.   Rosenberg,  42  Mo.  448  ;  Hesthal  v.  Myles,  53  Cal.  623  ;  Woods 

Bishop  V.  O'Connell,  56  Mo.  158 ;  Bur-  v.  Bugbey,  29  Cal.  466. 


§252  CONFLICTING    POLICIES.  359 

a  wise  one,  or  the  recovery  in  such  cases  always  just.  "In 
seeking  to  catch  rogues"  it  is  not  the  proper  function  of 
the  courts  to  "ensnare  honest  men.  We  may  become  so 
zealous  against  fraud  as  to  restrain  the  free  action  of 
honesty,  a  result  that  would  be  most  disastrous.  Better  is 
it  that  many  frauds  should  go  undetected  than  that  the 
means  of  detection  or  prevention  should  treat  honest  men 
as  guilty,  or  teach  men  to  be  always  suspicious  of  their 
neighbors,  and  watchful  that  honest  acts  be  precisely  meas- 
ured according  to  the  standard  of  legal  morality."^  Parties 
designing  to  make  covinous  alienations  will  so  frame  their 
actions  as  to  endeavor  to  leave  no  indicia,  or  to  create  no 
presumptions  of  fraud.  Honest  people,  on  the  other  hand, 
conscious  of  no  design  to  wrong  others,  and  giving  little 
thought  to  the  appearance  or  form  of  the  transaction,  are 
often  the  victims  of  unfortunate  circumstances,  and  sud- 
denly discover  that  the  law  imputes  to  their  innocent  acts 
or  omissions  wicked  designs,  than  which  nothing  was  fur- 
ther from  their  minds.  Hence  Cabell,  J.,  in  commenting 
upon  the  mischievous  operation  of  the  absolute  rule,  said  : 
"  I  have  found  myself  compelled  as  judge  to  pronounce 
transactions  to  be  fraudulent  and  void  as  to  creditors  which 
were  known  to  be  perfectly  fair  and  bojia  fide,  and  were 
not  intended  or  calculated  to  delay,  hinder,  or  defraud 
creditors."^  The  rule  creating  a  fraudulent  presumption  in 
these  cases  seems  to  be  sufficiently  severe  in  its  operation. 
A  policy  which  blindly  ignores  the  real  intent  of  the 
parties,  practically  excludes  all  evidence  concerning  the 
transaction  or  its  underlying  motives,  and  conclusively 
brands  it  as  fraudulent  by  closing  the  mouths  of  the  wit- 
nesses, should  be  adopted  with  great  reluctance.  In  such 
cases  "  the  question  is  not  whether  the  transaction  was 
honest  or  otherwise,  but  whether  there  is  not  that  evidence 


'  Hugus    V.    Robinson,    24    Pa.   St.         '^  Davis  v.  Turner,  4  Gratt.  (Va.)  422, 
II.  471. 


J 


60  CONFLICTING    POLICIES.  §   252 


of  fraudulent  intent  which  precludes  inquiry  into  its  integ- 
rity as  a  question  of  morals,"  It  is  a  rule  of  policy  as  well 
as  of  evidence.^  It  seems  clear  that:  "The  statute  of 
frauds  ought  not  to  be  construed  to  make  innocent  parties 
sufferers."^  That  such  is  often  the  result  cannot  be  ques- 
tioned. It  was  found  in  Virginia  that  the  cases  of  honest 
transfers  in  which  the  vendor  retained  possession  were  too 
numerous  and  too  frequent  to  allow  of  a  further  adher- 
ence to  the  old  arbitrary  rule  of  fraud /^r  se.  It  resulted 
in  the  decision  of  Davis  v.  Turner,^  repudiating  the  rule  as 
to  absolute  presumptions.  The  court  said  :  "  It  seems  to 
be  carrying  a  distrust  of  juries  too  far  to  suppose  them  in- 
capable, with  the  aid  of  a  -wholtsomt  prima  facie  presump- 
tion, to  administer  justice  on  this  subject,  in  the  true 
spirit  of  the  statute,  and  it  is  better  to  confine  the  interpo- 
sition of  the  court  to  guiding,  instead  of  driving  them  by 
instructions,  and  to  the  power  of  granting  new  trials  in 
cases  of  plain  deviation."  In  the  same  case  the  court  ob- 
serve that  the  conclusive  presumption  as  a  test  of  a  fraudu- 
lent purpose  has  no  claim  to  certainty ;  on  the  contrary  it 
concedes  its  own  fallibility,  by  crushing  mercilessly  the 
most  convincing  evidence  of  fairness  and  good  faith.* 


'  Kirtland  v.  Snow,  20  Conn.  28.  ness,  and  acting  for  the  benefit  of  cred- 
*  Sydnor  v.  Gee,  4  Leigh  (Va.)  545 ;  itors  who  have  full  confidence  in  his 
Cadogan  v.  Kennett,  2  Cowp.  432,  integrity ;  all  these  have  grown  out  of 
per  Lord  Mansfield.  the  usages  of  modern  society ;  the 
3  4  Gratt.  (Va.)  423,  444.  necessities  of  commerce  ;  the  conven- 
•*  Cole  V.  White.  — "  But  when  we  iences  of  daily  life ;  the  wants  and 
look  at  the  daily  business  of  life,  out  usages  of  trade  and  industry.  They 
of  court,  another  aspect  of  this  question  have  followed  in  the  train  of  corn- 
presents  itself.  Mortgages  of  personal  merce,  credit,  and  enterprise.  Like 
property,  as  ships,  lake  vessels,  canal  them,  they  have  been  largely  produc- 
boats,  and  river  craft ;  the  stock  and  tive  of  benefits  to  society  ;  yet  those 
implements  of  the  mechanic  or  small  benefits,  like  the  results  of  all  other  hu- 
manufacturer ;  the  furniture  of  the  inn-  man  action,  are  not  unmixed  with  evil, 
keeper  ;  assignments  for  the  benefit  of  By  such  means  the  adventure,  capacity, 
creditors,  leaving  the  goods  and  debts  acquirements,  and  industry  of  the  young 
assigned  publicly  to  be  managed  and  or  needy  have  been  aided  and  stimu- 
disposed  of  by  the  original  owner  as  an  lated  ;  large  concerns  of  honorable  but 
agent,  best  acquainted  with  the  busi-  unfortunate  merchants  have  been  set- 


§   253  CHANGE    OF    POSSESSION.  36I 

§  253.  Actual  change  of  possession  required. — The  words 
"actual  and  continued  ciiange  of  possession  "  in  the  statute 
in  New  York,  are  construed  to  mean  "  an  o})en  public 
change  of  possession,  which  is  to  continue  and  l)e  mani- 
fested continually  by  outward  and  visible  signs,  such  as 
render  it  evident  that  the  possession  of  the  judgment-debtor 
has  ceased."^  In  Crandall  v.  Brown*  the  court  observed 
that  "  possession  cannot  be  taken  by  words  and  inspection." 
In  Otis  V.  Sill,^  Paige,  J.,  said  :  "  It  has  been  rej)eatedly 
decided  that  if  an  assignee  or  mortgagee  leaves  goods  as- 
signed or  mortgaged  in  the  possession  of  the  assignor  or 
mortgagor  as  his  agent,  this  is  not  an  actual  change  of  pos- 
session within  the  meaning  of  the  fifth  section  of  the  stat- 
ute of  frauds."'*  In  Billingsley  v.  White, ^  Williams,  J.,  in 
delivering  the  opinion  of  the  Pennsylvania  Supreme  Court, 
said  :  "  The  delivery  must  be  actual,  and  such  as  the  nature 
of  the  property  or  thing  sold,  and  the  circumstances  of 
the  sale  will  reasonably  admit,  and  such  as  the  vendor  is 
capable  of  making.  A  mere  symbolical  or  constructive 
delivery,  where  an  actual  or  real  one  is  reasonably  prac- 
ticable, is  of  no  avail.  There  must  be  an  actual  separa- 
tion of  the  property  from  the  possession  of  the  vendor 
at  the  time  of  the  sale,  or  within  a  reasonable  time  after- 
ward, according  to  the  nature  of  the  property."'^     It  is  suf- 


tled  to  the  greatest  advantage  of  the  '  Topping  v.  Lynch,  2  Rob.  (N.  Y.) 

creditors  and  the  least  possible  loss  of  488  ;  approved  in  Steele  v.  Benham,  84 

the   insolvent;     and    the   kindness   of  N.  Y.  638.    Compare  Hale  v.  Sweet.  40 

parents  or  the  generosity  of  friends  has  N.  Y.  97;  Cutter  v.  Copeland,  18  Me. 

been  enabled  to  preserve  the  comforts  127;  Osen  v.  Sherman,  27  Wis.  501  ; 

of  a  home  to  the  wife  and  children  of  a  Lesem  v.  Herriford,  44  Mo.  323. 

bankrupt,  without  the  slightest   injury  ''  18  Hun  (N.  Y.)  461,  463. 

or  fraud  (save  in  legal  fiction)  to  prior  '  8  Barb.  (N.  Y.)  102,  122. 

creditors    or    subsequent    purchasers.  ■»  Sec  Hanford  v.  Artchcr,  4  Hill  (N. 

Society  reaps  nothing  but  unquestioned  Y.)  271. 

benefit  from  nine-tenths  of  such  assign-  '  59  Pa.  St.  466. 

ments  or  securities  occurring  in  actual  "  Where  the  goods  are  locked  up  and 

life."   Cole  v.  White,  26  Wend.  (N.  Y.)  the  keys  are  delivered  to  the  vendee, 

523.  and  the  vendor  removes  from  the  house, 


362  QUESTION    FOR    THE    JURY.  §§   254,   255 

ficient  if  the  possession  taken  of  the  goods  is  such  as  the 
nature  of  the  case  would  permit.^  It  may  be  observed  that 
the  fact  that  a  party  testified  in  a  general  way  that  he  took 
possession,  or  was  in  possession,  will  have  no  weight  when 
the  evidence  shows  precisely  what  was  done.*^ 

It  is  obvious  from  a  casual  consideration  of  these  cases 
that  a  change  of  possession  which  will  protect  the  title  of 
the  purchaser,  as  against  creditors,  must  consist  of  a  com- 
plete surrender  and  discontinuance  of  the  exercise  of  acts 
of  ownership  by  the  vendor  and  the  assumption  of  such 
acts  on  the  part  of  the  vendee. 

§254.  Question  for  the  jury. — The  doctrine  of  Massachu- 
setts,^ followed  by  many  of  the  States,  makes  continued 
possession,  as  evidence  of  fraud,  a  question  for  the  jury.** 
It  is  a  question  of  intent  to  be  settled  by  them  as  a  ques- 
tion of  fact,^  even  though  the  evidence  of  good  faith  and 
absence  of  intent  to  defraud  is  uncontradicted.^  If  the  jury 
err,  justice  may  be  obtained  by  setting  the  verdict  aside, "^ 
but  otherwise  the  court  is  not  entitled  to  interfere  with  the 
prerogative  of  the  jury. 

§  255.  Overcoming  the  presumption. — The  presumption  of 
fraud,  which  the  statute  raises  from  the  fact  that  there  was 
no  actual  change  of  possession  of  the  chattels  sold,  practi- 
cally becomes  conclusive  if  not  rebutted  or  overcome  by 


this  is  as  effectual  as  though  the  vendee  Cutter  v.  Copeland,  18  Me.  127;  Til- 
had  actually  removed  the  property,  son  v.  Tervvilliger,  56  N.  Y.  273  ;  Smith 
Barr  v.  Reitz,  53  Pa.  St.  256,  See  v.  Welch,  10  Wis.  91  ;  Allen  v.  Cowan, 
Benford  v.  Schell,  55  Pa.  St.  393.  23  N.  Y.  507;  HoUacher  v.  O'Brien,  5 
'  Manton  v.  Moore,  7  T.  R.  71.  Hun  (N.  Y.)  277  ;  Warner  v.  Norton, 

*  Steele  v.  Benham,  84  N.  Y.  640 ;  20  How.  460 ;  Scott  v.  Winship,  20 
Miller  v.  Long  Island  R.R.  Co.,  71  N.  Ga.  430;  Chamberlain  v.  Stern,  11  Nev. 
Y.  380.  268. 

'  Ingalls  V.  Herrick,  108  Mass.  351.  ^  Miller  ads.  Pancoast,  29  N.  J.  Law 

*  See  Mead  v.  Noyes,  44  Conn.  487 ;  254. 

Thompson  v.  Blanchard,  4  N.  Y.  303  ;  '  Blaut  v.  Gabler,  77  N.  Y.  461. 

Griswold    v.    Sheldon,  4   N.  Y.    581  ;  '  Hollacher  v.  O'Brien,  5  Hun  (N. 

Davis  v.  Turner,  4  Gratt.  (Va.).  422  ;  Y.)  277;  Potter  v.  Payne,  21  Conn.  363. 


§§  256,   257  POSSESSION.  36 


0^0 


competent  proof  in  explanation.^     There  is  nothing  left 
for  the  jury  to  pass  upon  or  to  consider. 

It  was  observed  in  the  Supreme  Court  of  Kansas,^  that 
the  law  did  not  imply  that  one  purchasing  property  with- 
out taking  actual  possession,  if  there  were  creditors  of  the 
vendor,  was  presumptively  engaged  in  a  fraudulent  trans- 
action, and  that  his  conduct  was  to  be  scrutinized  accord- 
ingly, but  simply  that  one  claiming  under  such  a  purchase 
takes  nothing  until  he  shows  good  faith  and  consideration. 

§  256.  Possession  within  a  reasonable  time. — It  is  fre- 
quently said  that  the  vendee  must  acquire  possession  of  the 
subject-matter  of  the  sale  within  a  reasonable  time.  Ac- 
cording to  some  of  the  cases  a  "  reasonable  time"  must  be 
construed  not  with  reference  to  the  mere  convenience  of 
the  party,  but  only  with  reference  to  the  time  fairly  re- 
quired to  perform  the  act  of  taking  possession,  or  doing 
what  is  its  equivalent.^  The  cases  where  it  is  held  that 
immediate  delivery  is  not  practicable  are  usually  illustrated 
in  the  books  by  the  case  of  a  sale  of  a  ship  at  sea  where 
immediate  delivery  is  a  physical  impossibility ;  and  the 
same  principle  has  been  applied  to  a  case  where  the  situa- 
tion of  the  parties  at  the  time  of  the  sale  was  so  remote 
from  the  place  where  the  property  was  situated,  that  imme- 
diate manual  delivery  was  impossible.  What  is  a  reasona- 
ble time  must  be  determined  by  the  circumstances  of  each 
case  ;■*  no  definite  rule  can  be  laid  down.*^ 

§  257.  Change  of  possession  must  be  continuous. — -In  a 
controversy  which  arose  in  New  York,  it  appeared  that  the 
sale  was  accompanied  by  an  immediate  delivery  of  the  prop- 
erty to  the  vendee,  and  an  actual  change  of  possession,  and 

'  Mayer  v.  Webster,  18  Wis.  396  ;        '  See  Seymour  v.  O'Keefe,  44  Conn. 

Cheatham  v.  Hawkins,  76  N.  C.  338,  132;     Meade    v.     Smilh,     16    Conn, 

and  cases  cited  ;  State  v.  Rosenfeld,  35  346. 
Mo.  472.  *  State  v.  Kini;.  44  Mo.  238. 

'  Kansas  Pacific  Ry.  Co.  v.  Couse,  17         '  Bishop  v.  O'Connell,  56  Mo.  158. 
Kans.  571-575- 


364  RESUMPTION    OF    POSSESSION.  §  258 

that,  after  considerable  time  had  passed,  the  property  came 
again  into  the  possession  of  the  vendor.  It  was  decided 
that  the  law  would  not  measure  the  lapse  of  time  from  the 
sale  and  delivery  to  the  renewed  possession  by  the  vendor 
directly  from  his  vendee,  and  say  that  a  change  of  posses- 
sion continued  for  a  longer  period  would  satisfy  the  statute, 
but  for  a  shorter  period  would  not  have  that  effect.  The 
statute  was  said  to  be  imperative  that  the  sale  must  be  fol- 
lowed by  a  continued  change  of  possession  or  the  fraudu- 
lent presumption  would  obtain.^ 

§  258.  Temporary  resumption  of  possession. — Where  it 
appears  that  the  property  passed  into  the  hands  of  the 
vendor  for  a  mere  temporary  purpose,  and  under  circum- 
stances which  showed  that  the  return  of  the  property  was 
not  effected  with  a  view  of  enabling  the  vendor  to  use  it  as 
his  own  while  the  legal  title  was  in  another,  the  creditors 
of  the  vendor  will  not  be  authorized  to  attack  the  sale  as 
fraudulent  and  void.  This  was  held  where  the  subject- 
matter  of  the  sale  was  a  cutter  which  the  vendee  occasion- 
ally allowed  the  vendor  to  use.^  Questions  of  this  class 
often  depend  for  their  solution  upon  the  locus  of  the  ac- 
tion ;  whether  it  be  in  a  State  w^here  the  presumption  can  be 
rebutted  or  one  where  it  is  conclusive.  By  way  of  contrast 
with  Knight  v.  Forward,  is  Webster  v.  Peck,^  where  it  ap- 
peared that  a  vendor,  who  had  sold  a  horse,  within  a  week 
after  the  sale  hired  him  of  the  vendee,  and  was  using  him 
to  all  appearances  as  his  own,  in  the  same  manner  as  be- 
fore the  sale.  This  was  considered  to  be  a  restoration  of 
the  possession,^  and  the  vendee  lost  his  horse  to  an  attach- 
ing creditor  of  the  vendor.^ 


'  See  Tilson  v,  Terwilliger,  56  N.  Y.  ^  31  Conn.  495. 

273 ;   Carman   v.   Cooper,  72  Pa.   St.  *  See  Davis  v.  Bigler,  62  Pa.  St.  248  ; 

37 ;  Young   v.    McCIure.    2    W.  &   S.  Barr  v.  Reitz,  53  Pa.  St.  256. 

(Pa.)   147 ;  Bacon  v.  Scannell,  9  Gal.  '  Compare  Boud  v.  Bronson,  80  Pa. 

271  ;  Miller  v.  Carman,  69  Pa.  St.  134;  St.   360  ;  Johnson  v.  Willey,  46  N.  H. 

Norton  v.  Doolittle,  32  Conn.  405.  75  ;  Lewis  v.  Wilcox,  6  Nev.  215. 

^  Knight  V.  Forward,  63  Barb.   CN. 
Y.)3ii. 


§§  259»   260  POSSESSION    OF    BAILEE.  365 

§  259.  Concurrent  possession  insufficient. — The  authorities 
seem  to  be  almost  unanimous  in  holding  that  concurrent 
possession  by  the  vendor  and  vendee  will  not  satisfy  the 
rule  or  the  statute  requiring  a  change  of  possession.^ 
"There  cannot,  in  such  case,"  said  Duncan,  J.,  "  be  a  con- 
current possession  ;  it  must  be  exclusive,  or  it  would,  by 
the  policy  of  the  law,  be  deemed  colorable."^  Again,  it  is 
said  to  be  "  mere  mockery  to  put  in  another  person  to  keep 
possession  jointly  with  the  former  owner."  ^  In  Wordall 
V.  Smith'*  Lord  Ellenborough  observed:  "To  defeat  the 
execution  by  a  bill  of  sale,  there  must  appear  to  have  been 
a  bo7iafide,  substantial  change  of  possession A  con- 
current possession  with  the  assignor  is  colorable.  There 
must  be  an  exclusive  possession  under  the  assignment,  or 
it  is  fraudulent  and  void  as  against  creditors."  ^  So  it  is  no 
change  of  possession  to  leave  the  property  in  charge  of  the 
vendor's  agent.^ 

§  260.  Possession  of  bailee. — The  sale  of  personal  prop- 
erty in  the  hands  of  a  bailee  is  good  against  an  execution 
creditor,  though  there  be  no  actual  delivery,  provided  the 
vendor  do  not  retake  the  possession.^  In  Dempsey  v. 
Gardner^  Chief-Justice  Gray  said:  "Where  property  sold 
is  at  the  time  in  the  custody  of  a  third  person,  notice  to 
him  of  the  sale  is  sufficient  to  constitute  a  delivery  as 
against  subsequent  attaching  creditors."^     The  reason   of 


'  Sumner  v.  Dalton,  58  N.  H.  296;  *  r  Campb.  332. 

Lang  V.    Stockwell,    55   N.   H.    561;  '  See  Trask  v.  Bowers,  4  N.  H.  314. 

Steelwagon  v.  Jeffries,  44  Pa.  St.  407.  '  Brunswick  v.  McClay,  7  Neb.    137. 

Compare  Townsend  v.  Little,    109  U.  But  compare  Allen  v.  Cowan,   23   N. 

S.  504.  Y.  502. 

'  Clow    V.   Woods,  5  S.  &  R.  (Pa.)  '  Linton  v.  Butz,  7  Pa.  St.  89 ;  Wor- 

287.     See  McKibbin  v.  Martin,  64  Pa.  man  v.  Kramer,  73  Pa.  St.  385  ;  Good- 

St.   359,  per  Sharswood,  J.;    Regli   v.  win  v.  Kelly,  42  Barb.  (N.  V.)  194. 

McClure,  47Cal.  612;  Brawn  v.  Keller,  '  127  Mass.  381,  383. 

43  Pa.  St.  106.  'Citing  Tuxworlh  v.  Moore,  9  Pick. 

3  Babb  V.  Clemson,   10  S.  &  R.  (Pa.)  (Mass.)   347;    Carter   v.    Willard.    19 

428.     See  Worman  v.  Kramer,  73  Pa.  Pick,    (^!ass.)    i  ;    Russell  v.  O'Brien. 

St.  378.  127  Mass.  349.     See  Hildreth  v.  Fitts, 


366  NO    DELIVERY.  §§   26 1,   262 

the  rule  calling  for  change  of  possession  is  entirely  satisfied 
in  such  cases.^ 

§  261.  No  delivery  where  purchaser  has  possession. — 
Where  at  the  time  of  the  sale  the  property  is  in  the  pos- 
session and  subject  to  the  control  of  the  vendee  the  law 
does  not  require  an  act  of  delivery.  The  sale  is  complete 
without  it.^  In  Warden  v.  Marshall,^  Hoar,  J.,  said  :  "The 
oil  being  already  in  the  plaintiff's  possession  in  the  bonded 
warehouse,  no  other  delivery  was  necessary  to  complete  the 
sale."  In  Lake  v.  Morris,'*  Hinman,  C.  J.,  observed  :  "  At 
the  tihne  of  the  purchase  the  plaintiff  was  keeping  the 
horses  for  his  nephew,  and  the  defendant  claims  that,  be- 
cause there  was  no  formal  delivery  of  the  possession  of  them 
by  the  vendor  to  the  purchaser,  the  sale  was  in  point  of  law 
fraudulent  and  void  against  creditors.  Of  course  no  such 
delivery  could  have  taken  place  without  first  taking  the 
horses  from  the  plaintiff's  possession  for  the  mere  purpose 
of  redelivering  them  to  him  again.  But  a  merely  formal 
act  like  this  we  presume  would  never  occur  between  parties 
whose  only  object  was  to  place  the  purchased  property  in 
the  hands  of  the  purchaser  for  his  use." 

§  262.  When  technical  delivery  is  not  essential. — In  some 
instances  the  necessities  of  the  case  render  a  technical  de- 
livery of  the  property  impossible  ;  in  such  cases  the  usual 
penalties  will  not  be  visited  upon  the  purchaser.  Thus  a 
sale  of  cattle  roaming  over  uninclosed  plains  with  those  of 
other  owners,  if  bona  fide,  will  not  be  invalid  as  against 
creditors  of  the  vendor,  merely  for  want  of  delivery,  until 


53  Vt.  684 ;  Doak  v.  Brubaker,  i  Nev,  Wood,   33  Vt,  338.      See  Chester  v. 

218;    How   V.   Taylor,    52    Mo.    592;  Bower,  55  Cal.  46. 

Kendall  v.  Fitts,  22  N.  H.  l.  *  Martin  v.  Adams,   104  Mass,  262  ; 

'  The  rule  is  otherwise  as  to  a  mere  Warden  v.   Marshall,   99   Mass.   305  ; 

servant;  the  possession  of  a  servant  is  Nichols  v.  Patton,  18  Me.  231  ;    Lake 

the  possession  of  his  employer.     Hurl-  v.  Morris,  30  Conn.  204. 

burd  v.  Bogardus,  10  Cal.  519;  Doak  ^  99  Mass.  306. 

V.  Brubaker,  i  Nev.  218  ;  Flanagan  v,  ^  30  Conn.  204. 


§   263  TECHNICAL    DELIVERY    NOT    ESSENTIAL.  367 

the  purchaser  has  had  a  reasonable  time  to  separate  and 
brand  the  cattle ;  and  the  branding  of  the  cattle  by  the  pur- 
chaser will  constitute  a  good  delivery,  although  the  cattle 
are  afterward  allowed  to  remain  in  the  same  uninclosed 
range  of  pasture.^  It  is  not  essential  that  a  transfer  of  stock 
should  be  made  on  the  books  of  a  corporation,  to  be  valid 
against  attaching  creditors,  when  not  called  for  by  some 
positive  provision  of  the  charter.^ 

A  symbolical  delivery  of  a  large  quantity  of  logs,  landed 
upon  a  stream  preparatory  to  driving,  has  been  considered 
sufficient.^  The  law  accommodates  itself  to  the  necessities 
of  the  business  and  the  nature  of  the  property,  making  a 
symbolical  delivery  sufficient  where  nothing  but  a  con- 
structive possession  can  ordinarily  be  had.'*  "It  often  hap- 
pens," says  Sharswood,  J.,  "that  the  subject  of  the  sale  is 
not  reasonably  capable  of  an  actual  delivery,  and  then  a 
constructive  delivery  will  be  sufficient.  As  in  the  case  of 
a  vessel  at  sea,  of  goods  in  a  warehouse,  of  a  kiln  of  bricks, 
of  a  pile  of  squared  timbers  in  the  woods,  of  goods  in  the 
possession  of  a  factor  or  bailee,  of  a  raft  of  lumber,  of 
articles  in  the  process  of  manufacture,  where  it  would  be 
not  indeed  impossible,  but  injurious  and  unusual  to  remove 
the  property  from  where  it  happens  to  be  at  the  time  of 
the  transfer."^ 

§  263.  Excusing  want  of  change  of  possession. — 1  he  con- 

'  Walden  v.  Murdock,  23  Cal.  540.  ^  McKibbin  v.  Martin,  64  Pa.  St.  357. 

Contra,  Sutton  v.  Ballou,  46  Iowa  517.  Citing  Clow  v.  Woods,  5  S.  &  R.  (Fa.) 

♦  Boston  Music  Hall  Assoc,  v.  Cory,  275;  Cadbury  v.  Nolen,  5  Pa.  St.  320; 

129  Mass.  435.     See  Beckwith  v.  Bur-  Linton  v.  Butz,  7  Pa.  St.  89;    Haynes 

rough,  13  R.  L  294,  and  cases.  v.  Hunsickcr,  26  Pa.  St.  58;   Chase  v. 

^  Bethel  Steam   Mill  Co.  v.  Brown,  Ralston,  30  Pa.  St.  539 ;  Barr  v.  Reitz, 

57  Me.  9.  53  Pa.  St.  256;    Benford  v.  Schell,  55 

■*  Compare  Terry  v.  Wheeler,  25  N.  Pa.  St.  393.     See  also   P'itch  v.  Burk, 

Y.  520;  Boynton  V.  Veazie,  24Me.  286;  38  Vt.  683;    Hutchins  v.  Gilchrist.  23 

Doak  V.  Brubaker,  i   Nev.  218;   Long  Vt.  82  ;  Allen  v.  Smith,  ro  ^L^ss.  308; 

V.    Knapp,   54   Pa.  St.    514;    Allen   v.  Conway  v.  Edwards,  6  Nev.  190 ;  Wal- 

Smith,  10  Mass  308 ;  Tognini  v.  Kyle,  den   v.   Murdock,   23  Cal.   540 ;    Cart- 

17  Nev,  215.     But  compare  Wilson  v.  wright  v.  PhoL-nix,  7  Cal.  2S1  ;    Woods 

Hill,  17  Nev.  401.  V.  Bugbey,  29  Cal.  472. 


368  POSSESSION    OF    REALTY.  §   264 

tention  was  urged  by  counsel,  in  Mitchell  v.  West,^  that  in 
addition  to  proof  that  the  sale  of  the  chattels  was  bona  fide, 
and  that  there  was  no  intent  to  defraud  the  creditors  of 
the  vendor,  it  was  necessary  to  show  some  valid  excuse  or 
reason  for  leaving  the  property  in  the  possession  of  the 
vendor,  or  stated  in  another  form,  that  the  absence  of  in- 
tent to  defraud  creditors  could  not  be  established  without 
showing  a  good  reason  for  the  want  of  change  of  posses- 
sion. The  court  upon  the  authority  of  Hanford  v.  Art- 
cher,^  held  that  this  was  not  the  case.  The  very  purpose 
of  the  law  in  presuming  fraud  from  a  failure  to  deliver 
possession  was  to  suppress  sales  made  in  bad  faith  and 
without  consideration.  Manifestly  this  presumption  ought 
to  disappear  where  both  good  faith  and  consideration  are 
proved  to  exist.  Clute  v.  Fitch  ^  is  an  illustration  of  a 
sufficient  excuse  for  failing  to  change  possession.  A  sleigh 
was  sold  in  July,  and  owing  to  the  difficulty  of  removing 
it  at  that  season  of  the  year  was  stored,  by  agreement,  in 
the  vendor's  barn  until  the  ensuing  winter.  This  was  con- 
sidered a  satisfactory  explanation  of  the  failure  to  change 
possession.  It  may  be  here  noted  that  a  vendee  may  con- 
tinue at  the  old  stand  the  business  which  he  has  purchased 
of  the  vendor."^ 

§  264.  Change  of  possession  of  realty. — There  seems  to 
be  a  distinction  recognized  in  the  law  as  to  the  effect  of  a 
failure  to  change  possession  of  realty  as  distinguished  from 
the  rule  applicable  to  personalty.  In  Phettiplace  v. 
Sayles,^  a  leading  and  highly  important  case,  Story,  J.,  said  : 
"  Another  circumstance,  relied  on  to  invalidate  the  good 
faith  of  this  conveyance,  is,  that  no  change  of  possession 
took  place,  but  the  grantor  continued  in  possession  not- 
withstanding the  sale,  and   occupied  the  farm   as  he  had 


'  55  N.  Y.  107.  •*  Ford  v.  Chambers,  28  Cal.  13. 

»  4  Hill  (N.  Y.)  271.  ^  4  Mason,  321. 

'  25  Barb.  (N.  Y.;  428. 


§   264  POSSESSION    OF    REALTV.  369 

been  accustomed  to  do.  This  circumstance  is  not  without 
weight,  and,  in  a  doubtful  case,  would  incline  the  court  not 
to  yield  any  just  suspicions  arising  from  other  causes.  But 
possession,  after  a  sale  of  real  estate,  does  not  per  se  raise 
a  presumption  of  fraud,  as  it  does  in  the  case  of  personal 
estate.  In  the  latter  case,  possession  is  prima  facie  evi- 
dence of  ownership,  and  where  a  party,  who  is  owner,  sells 
personal  property  absolutely,  and  yet  continues  to  retain 
the  visible  and  exclusive  possession,  the  law  deems  such 
conduct  a  constructive  fraud  upon  the  public,  and  the  sale 
as  to  creditors,  wholly  inoperative,  whether  it  be  for  a  valu- 
able consideration  or  not.  This  doctrine  has  its  founda- 
tion in  a  great  public  policy,  to  protect  creditors  against 
secret,  collusive  transfers.  The  same  rule  does  not  apply 
to  real  estates.  Possession  is  not  here  deemed  evidence  of 
ownership The  public  look  not  so  much  to  posses- 
sion as  to  the  public  records  as  proofs  of  the  title  to  such 
property.  The  possession,  therefore,  must  be  inconsistent 
with  the  sale,  and  repugnant  to  it  in  terms  or  operation, 
before  it  raises  a  just  presumption  of  fraud."'  The  rule 
seems  to  be  established  in  New  York  to  the  effect  that 
the  continuance  in  possession  of  the  grantor  is  merely  a 
circumstance  proper  to  be  considered  in  connection  with 
other  evidence  tending  to  establish  a  design  to  defraud 
creditors,  but  it  did  not  of  itself  warrant  a  finding  as  a 
leeal  conclusion  that  the  deed  was  fraudulent.' 


'  See  Every  v.  Edgerton,  7  Wend.  (N.  want  of  correspondent  possession  is  less 

Y.)  260 ;    Bank  of  the  U.  S.  v.  Hous-  evincive  of  fraud  than  where  a  chattel 

man,  6  Paige  (N.  Y.)  526 ;    Fuller  v.  is  sold,  because  the  title  to  the  former 

Brewster,  53  Md.  363  ;  Clark  v.  Krause,  is  evidenced  by  possession,  not  of  the 

2  Mackey  (D.  C.)  567.  thing,  but  of  th«  title  deeds,  which,  like 

^  Clute  V.  Newkirk,  46  N.  Y.  684.  manual  occupation  in  the  case  of  a 
Compare  Steward  v.  Thomas,  35  Mo.  chattel,  is  the  criterion."  See  Tibbals 
202  ;  Apperson  V.  Burgett,  33  Ark.  328  ;  v.  Jacobs.  31  Conn.  431;  Merrill  v. 
Tompkins  v.  Nichols,  53  Ala.  197;  Locke,  41  N.  H.  489;  Ludwig  v.  High- 
Collins  V.  Taggart,  57  Ga.  355.  In  ley,  5  Pa.  St.  132;  Allentown  Bank  v. 
Avery  v.  Street,  6  Watts  (Pa.)  249.  Beck,  49  Pa.  St.  394  ;  Paulling  v.  Stur- 
Chief-Justice  Gibson  said  :  "  It  is  well  gus,  3  Stew.  (Ala.)  95  ;  Suiter  v.  Tur- 
established  that  where  land  is  conveyed  ner,  10  Iowa  517. 
24 


370  CHANGE    ON    JUDICIAL    SALE.  •     §   265 

The  reader  must  not  be  misled  by  the  observation  of 
Judge  Story,  that  "possession  is  not  here  deemed  evidence 
of  ownership."  The  word  "  here"  is  significant  in  this  con- 
nection. The  rule  enunciated  by  the  learned  court  is  par- 
tially founded  on  the  disinclination  of  the  law  to  presume 
fraud,  and  is  limited  in  its  application.  Possession,  on  the 
other  hand,  ordinarily  raises  a  presumption  of  ownership 
by  the  occupant  of  real  property.  True,  it  is  the  lowest 
degree  of  title,  but  nevertheless  it  is  evidence  of  owner- 
ship ;^  descends  to  heirs  ;^  is  subject  to  taxation  ;^  may  be 
sold  at  sheriff's  sale  ;^  and  is  sufficient  proof  of  title  to  sup- 
port ejectment  against  trespassers.^  In  these  cases  the 
presumption  of  ownership  arising  from  possession  is  in- 
dulsfed  because  it  does  not  conflict  with  an  honest  and  law- 
ful  intention,  and  does  not  lead  to  a  conclusion  bearing  the 
stigma  of  fraud. 

§  265.  Change  of  possession  on  judicial  sale. — The  rule  is 
promulgated  in  Pennsylvania  that  a  change  of  possession  is 
not  necessary  to  give  validity  to  a  judicial  sale.^  Chief- 
Justice  Sharswood  said,  in  Smith  v.  Crisman  -J  "  Nothing 
is  better  settled  in  this  State  than  that  the  purchaser  of 
personal  property  at  sheriff's  or  constable's  sale,  may  leave 
it  in  the  possession  of  the  defendant,  as  whose  property  it 
was  sold,  under  any  lawful  contract  of  bailment."  The 
retention  of  possession  in  such  a  case  is  not  a  badge  of 
fraud,  because  the  sale  is  not  the  act  of  the  party  retaining 
the  property,  but  is  the  act  of  the  law,  and  being  a  judicial 


1  Rawley  v.   Brown,   71    N.  Y.  85.  v.  Campbell,  25  Wis.  614;  Doe  v.  West, 

See  Ludlow  v.  McBride,  3  Ohio  241  ;  l  Blackf.  (Ind.)  135;  Christy  v.  Scott, 

Phelan  V.  Kelly,  25  Wend.  (N,  Y.)  389 ;  14  How.  282.     See  Burt  v.  Panjaud,  99 

Teabout  v.  Daniels,  38  Iowa  158  ;  Gil-  U.  S.  180 ;  Sedgwick  &  Wait  on  Trial 

,  Jett  V.  Gaffney,  3  Col.  351.  of  Title  to  Land,  Chap.  XXVIL 

-  Mooney   v.  Olsen,  21    Kans.  691-  «  Bisbing  v.  Third  Nat.  Bank,  93  Pa. 

,  697.  St.  79 ;  Maynes  v.  Atwater,  88  Pa.  St. 

'  Blackwell  on  Tax  Titles,  pp.  5,  6,  496. 

•*  Yates  V.  Yates,  76  N.  C.  142.  "^  91  Pa.  St.  430. 

^  Jones  V.  Easley,  53  Ga.  454  ;  Bates 


§   266  DELIVERY    OF    GROWING    CROPS. 


O/ 


sale  conducted  by  a  sworn  officer  of  the  law,  is  deemed  to 
be  fair  and  honest  until  proved  otherwise.^ 

The  rule  is  quite  universal  in  its  application  that  where 
a  stranger  purchases  and  pays  for  property  on  execution 
sale,  his  failure  to  remove  it  from  the  possession  of  the  de- 
fendant in  execution  does  not  render  the  sale  fraudulent 
per  se  or  presumptively  fraudulent.^  Under  the  statute  in 
New  York,^  however,  as  interpreted  by  the  courts,^  the  ex- 
ecution sale  will  be  presumptively  fraudulent  unless  accom- 
panied by  immediate  delivery,  and  followed  by  an  actual 
and  continued  change  of  possession,  whether  the  plaintiff 
in  execution  or  a  third  person  be  the  purchaser.  The  rea- 
son of  the  rule  and  the  evil  at  which  it  is  aimed  is  said  to 
justify  these  decisions.  Finch,  J.,  observed  :  "As  an  honest 
purchaser  buys  because  he  wants  the  property  and  its  pos- 
session, and,  therefore,  naturally  and  usually  takes  it,  the 
absence  of  this  fact  indicates  some  purpose  different  from 
that  of  an  honest  purchaser,  and  requires  proof  of  fjood 
faith  and  honest  intention.  These  considerations  apply 
equally  to  cases  where  the  transfer  of  title  from  the  vendor 
is  through  the  agency  of  a  judgment  and  execution  fol- 
lowed by  a  sheriff's  sale."^ 

§  266.  Delivery  of  growing  crops. — Where  the  property 
which  is  the  subject-matter  of  sale  is  a  growing  crop,  there 
is  much  dissension  in  the  cases  as  to  delivery  of  possession. 
It  is  said  in  Illinois  that  in  the  case  of  standing  crops  the 
possession  is  in  the  vendee  until  it  is  time  to  harvest  them, 
and  until  then  he  is  not  required  to  take  manual  possession 


'  Craig's  Appeal,  ']']  Pa.  St.  456 
Myers  k.  Harvey,  2  P.  &  W.  (Pa.)  478 

'■^  Abney  v.  Kingsland,  10  Ala.  355 
Latimer  v.  Batson,  7  Dowl.  &  R.  106 
Anderson  v.  Brooks,  11  Ala.  953 
Walter  v.  Gernant,  13  Pa.  St.  515 
Dick  V,  Lindsay,  2  Grant  (Pa.)  431 


Eq.  (S.  C.)  253.  See  Hanford  v. 
Obrecht,  49  111.  146.  Compare  O'Brien 
V.  Chamberlain.  50  Cal.  285. 

3  3  N.  Y.  K.  S.  222.  §§  5,  6. 

■»  Stimson  v.  Wrii^lcy,  86  N.  Y.  336  ; 
Fonda  v.  Gross.  1 5  Wend.  (N.  Y.)  628 ; 
Gardcnier  v.  Tubbs.  21  Wend.  (N.  Y.) 


Poole  V.  Mitchell,  i  Hill's  (S.  C.)  Law     169. 

404  ;    Guignard    v.    Aldrich,   10  Rich.         '  Stimson  v.  Wrigley,  86  N.  Y.  336. 


372  POSSESSION    WITH    POWER    OF    SALE.  §   267 

of  them.*  Chief-Justice  Cockburn,  in  speaking  upon  this 
subject,  said  :  "  It  is  impossible  that  there  can  be  present 
delivery  of  growing  crops.  A  growing  crop  is  valueless, 
except  so  far  as  by  its  continuing  growth  it  may  hereafter 
benefit  the  purchaser,  and  it  is  only  when  it  reaches  matur- 
ity that  it  can  be  removed,  nor  is  it  intended  that  it  shall 

be  removed  till  it  is  ripe In  a  popular  and  practical 

sense,  growing  crops  are  no  more  capable  of  removal  than 
the  land  itself."^  Kent  said  :  "  I  do  not  know  that  corn, 
growing,  is  susceptible  of  delivery  in  any  other  way  than 
by  putting  the  donee  into  possession  of  the  soil."  Yet 
authority  can  be  cited  to  the  effect  that  the  vendee  does 
not  acquire  good  title  in  such  cases.^ 

§  267.  Possession  with  power  of  sale. — The  effect  of  leav- 
ing a  mortgagor  in  possession  of  the  mortgaged  goods,  with 
power  to  sell  the  property  and  substitute  by  purchase  other 
property  in  its  stead,  has  created  much  dissension  in  the 
courts,  and  engendered  a  vast  amount  of  litigation.  The 
question  came  up  before  the  United  States  Supreme  Court 
in  Robinson  v.  Elliott,^  a  case  which  we  shall  presently 
consider  at  length.^  The  mortgagors  were  authorized  by 
the  express  terms  of  the  mortgage  to  continue  in  possession 
'Of  the  mortgaged  wares  and  merchandise,  sell  the  same, 
-supply  their  places  with  other  goods  by  purchase,  the  lien 
of  the  mortgage  to  extend  to  the  replenished  stock.  The 
mortgage  was  adjudged  absolutely  void.  It  was  said  that 
whatever  might  have  been  the  motive  which  actuated  the 
parties  to  the  mortgage,  it  was  manifest  that  the  necessary 
result  of  what  they  did  was  to  allow  the  mortgagors,  under 


'  Ticknor  v.  McClelland,  84  111.  471.  ^  Smith  v.  Champney,  50  Iowa  174  ; 

See    Bull    v.    Griswold,    19    111.   631;  Lamson  v.  Patch,  5  Aljen  (Mass.)  586 ; 

Thompson  V.  Wilhite,  81  111.  356;  Bel-  Stone  v.  Peacock,  35  Me.  385.     See 

lows  Y.  Wells,  36  Vt.  600.     Compare  Raventas  v.  Green,  57  Cal.  255. 

Quiriaque  v.  Dennis,  24  Cal.  154.  •*  22  Wall.  513. 

*  Branton  v.  Griffits,  L.  R.  2  C.  P.  D.  '  See  infra.  Chap.  XXII.,  on  Fraud- 

212.  ulent  Chattel  Mortgages. 


§267  POSSESSION    WITH    POWER    OF    SALE.  ^73 

cover  of  the  mortgage,  to  sell  the  goods  as  their  own,  and 
appropriate  the  proceeds  to  their  own  purposes,  and  this, 
too,  for  an  indefinite  length  of  time.  A  mortgage  which 
in  its  very  terms  contemplates  such  results,  besides  being 
no  security  to  the  mortgagees,  operates  in  the  most  effect- 
ual manner  to  ward  off  other  creditors  ;  and  where  the  in- 
strument on  its  face  shows  that  the  legal  effect  of  it  is  to 
delay  creditors,  the  law  imputes  to  it  a  fraudulent  intent.^ 


'  See  Egdell  v.  Hart,  9  N.  Y,  213. 


CHAPTER  XVIII. 


EVIDENCE. 


I  268.  Concerning  evidence. 

269.  Competency   of   party  as    wit- 

ness. 

270.  Proof    and     conclusiveness    of 

judgments. 

271.  Burden  of  proof. 

272.  Secret  trust. 

273.  Proof  of  insolvency  of  debtor. 

274.  Insolvency  of  vendee. 

275.  General  reputation. 

276.  Concerning  res  gestce. 


§  277.  Declarations  before  sale — Realty 
and  personalty. 

278.  Declarations  of  debtor  after  sale. 

279.  Possession  after  conveyance. 

280.  Declarations  of  co-conspirators. 

281.  Proof  of  circumstances. 

282.  Other  frauds. 

283.  Suspicions  insufficient. 

284.  Proving  value. 

285.  Testimony    must     conform     to 

pleadings. 


"Where  fraud  appears  courts  will  drive  through  all  matters  of  form." — Buck  v.  Voreis,  89 
Ind.  117. 

§  268.  Concerning  evidence. — Manifestly  general  princi- 
ples and  rules  of  evidence  cannot  receive  extended  con- 
sideration in  a  special  treatise  relating  to  fraudulent  alien- 
ations and  creditors'  bills.  The  sufficiency  of  the  proofs 
requisite  to  uphold  or  defeat  a  creditor's  proceeding  to  dis- 
cover equitable  assets  or  annul  fraudulent  transfers  must, 
however,  necessarily  receive  passing  attention  in  its  promi- 
nent and  peculiar  phases.  The  character  of  the  evidence 
germane  to  the  subjects  of  consideration,^  notice,^  inten- 
tion,^ badges  of  fraud,^  creditors'  liens,^  and  change  of  pos- 
session,^ has  been  regarded  as  of  sufficient  importance  to  call 
for  incidental  treatment  in  separate '  chapters  devoted  to 
those  topics,  and  will  not  be  here  discussed  anew.  Volun- 
tary and  fraudulent  conveyances,  as  elsewhere  shown, "^  are 


'  See  Chap.  XV. 
2  See  Chap.  XXIV. 
2  See  Chap.  XIV. 
*  See  Chap.  XVI. 


See  Chap,  IV. 
See  Chap.  XVII. 
See  Chap.  XXVI. 


§§  269,  270  COMPETENCY    AS    WITNESS.  3/5 

regarded  as  valid  and  operativ^e  between  the  parties.  Only 
a  creditor  or  a  purchaser  from  the  donor  or  grantor  can 
assail  them,  or  inquire  into  the  consideration,  or  the  intent 
inspiring  their  execution.  If  the  relationship  of  debtor  and 
creditor  is  not  admitted,  the  burden  of  proving  it  rests  upon 
the  creditor;  the  primary  question  in  such  cases  is  the  ex- 
istence of  this  relationship,^  for  if  it  is  not  established  then 
the  complainant  stands  in  the  attitude  of  an  intermeddler 
raising  a  clamor  which  a  court  of  equity  would  be  illy  em- 
ployed in  silencing.^ 

§  269.  Competency  of  party  as  witness. — Not  only  is  it 
permissible  for  the  defendant  to  testify  as  a  witness  in  an 
equity  cause,^  but  he  may  be  compelled  to  give  evidence 
upon  the  demand  of  the  complainant.*  The  rule  of  the 
common  law  that  no  party  to  the  record  could  be  called  as 
a  witness  for  or  against  himself,  or  for  or  against  any  other 
party  to  the  suit,^  has  been  almost  wholly  abrogated.''  Mr. 
Justice  Swayne  said  in  Texas  v.  Chiles  :"  "The  innovation, 
it  is  believed,  has  been  adopted  in  some  form  in  most,  if 
not  in  all  the  States  and  Territories  of  our  Union.^  It  is 
eminently  remedial,  and  the  language  in  which  it  is  couched 
should  be  construed  accordingly." 

§270.  Pfoof  and  conclusiveness  of  judgments. — We  have 
already  discussed  the  principle  underlying  the  rule  which 
requires  a  judgment  as  the  foundation  of  a  creditor's  pro- 
ceeding to  annul  fraudulent  alienations  or  discover  equit- 
able assets;^  and  the  sufficiency  or  insufficiency  of  particu- 
lar judgments  to  satisfy  this  exaction.^"     It  follows  from 


'  Cook  V.  Hopper,  23  Mich.  517,  per  '  i  Greer.leaf's  Ev.  §§  329,  330. 

Cooley,  J.     See  Stanbro   v.    Hopkins,  "See  Texas  v.  Chiles.  21  Wall.  488; 

28  Barb.    (N.    Y.)   271  ;    Edmunds   v.  Clark   v.    Krausc,    2    Mackey  (D.   C.) 

Mister,  58  Miss.   765;  Donley  v.  Mc-  571. 

Kiernan,  62  Ala.  34.  '21  Wall.  490. 

^  Means  v.  Hicks,  65  Ala.  243.  '  Citing    i    Greenleaf  on    Evidence, 

^  Clark  V.  Krause,  2  Mackey  (D.  C.)  §  329. 

571.  •  See  Chap.  IV.,  §§  74-77. 

*  Texas  v.  Chiles,  21  Wall.  488.  ""  See  §§  76,  77- 


3/6  PROOF    OF   JUDGMENTS.  §   27O 

what  has  been  already  said,  and  indeed  has  been  expressly 
so  decided,  that  a  voluntary  conveyance  will  be  upheld  as 
regards  a  judgment  rendered  against  the  debtor  upon  a 
fictitious  debt/  It  may  be  observed  that  where  no  evi- 
dence is  offered  to  impeach  the  judgments,  and  it  appears 
that  they  were  regularly  rendered  by  courts  having  juris- 
diction, and  were  conclusive  as  between  the  parties,  such 
judgments  are  competent  evidence  tending  to  prove  the 
debt,  even  as  to  third  parties,  until  something  is  shown  to 
the  contrary  by  way  of  impeachment.^  A  third  party  may, 
as  a  general  rule,  show  that  the  judgment  was  collusive, 
and  not  founded  upon  an  actual  indebtedness  or  liability.^ 
Were  the  rule  otherwise  the  greatest  injustice  would  result, 
since  a  stranger  to  the  record  cannot  ordinarily  move  to 
vacate  the  judgment  or  prosecute  a  writ  of  error  or  an  ap- 
peal/ Teed  v.  Valentine'  is  a  peculiar  case  relating  to  the 
admissibility  of  evidence  to  explain  a  judgment  and  the 
motives  of  the  debtor.  In  that  case  it  appeared  that  the 
debt,  which  was  merged  in  the  judgment,  represented  prop- 
erty sold  after  the  delivery  of  the  deed  ;  that  is,  the  com- 
plainant was  a  subsequent  creditor.  The  debtor  was  al- 
lowed to  testify  that  he  purchased  the  property  as  agent  for 


'  King  V.  Tharp,  26  Iowa  283.  Douglass,  62   Pa.    St.   416;   Wells  v. 

■^  Vogt  V.  Ticknor,  48  N.  H.  245  ;  O'Connor,  27  Hun  (N.  Y.)  428.  Corn- 
Church  V.  Chapin,  35  Vt.  231 ;  N.  Y.  &  pare  Voorhees  v.  Seymour,  26  Barb.  (N. 
Harlem  R.R.  Co.  V.  Kyle,  5  Bosw.  (N.  Y.)  569;  Meeker  v.  Harris,  19  Cal. 
Y.)  587 ;  Hills  V.  Sherwood,  48  Cal.  278 ;  Shaw  v.  Dwight,  27  N.  Y.  245 ; 
386  ;  Law  V.  Payson,  32  Me.  521  ;  Whittlesey  v,  Delaney,  73  N.  Y.  571  ; 
Clark  V.  Anthony,  31  Ark.  546.  See  Mandeville  v.  Reynolds,  68  N.  Y.  545. 
Goodnow  V.  Smith,  97  Mass.  69.  See  "  Fraud  and  imposition  invalidate  a 
§  74,  especially  the  note.  judgment  as  they  do  all  acts."     Dob- 

^  Vogt  V.    Ticknor,   48  N.  H,  247  ;  son  v.  Pearce,  12  N.  Y.  165. 

Gregg  V.  Bigham,  i  Hill's  (S.  C.)  Law  "•  See  Guion  v.  Liverpool,  L.   &  G. 

299;    Collinson   v.   Jackson,    14   Fed.  Ins.  Co.,  109  U.  S.  173;  Sidensparker 

Rep.  309 ;  s.  C.  8  Sawyer  357 ;  Clark  v.  Sidensparker,  52  Me.  487  ;    Leonard 

V.    Anthony,   31    Ark.  549;    Carter  v.  v.  Bryant,  11  Met.  (Mass.)  370;  Thomas 

Bennett,   4   Fla.    283.      See   Lewis   v.  v.  Hubbell,   15  N.  Y.  405  ;  Ex  parte 

Rogers,  16  Pa.  St.  18;  Sidensparker  v.  Cutting,  94  U.  S.  14. 

Sidensparker,    52  Me.   481;    Clark   v.  '  65  N.  Y.  471. 


^271  BURDEN    OF    PROOF.  '^'J'] 

his  son,  and  that  he  did  no  business  for  himself.  Though 
the  judgment  was  conclusive  as  establishing  that  he  was 
liable  for  the  debt,  it  was  considered  competent  to  show 
that  the  debtor  acted  as  agent,  and  was  not  personally  en- 
gaged in  business,  and  hence  did  not  contemplate  future 
indebtedness,  and  had  no  design  to  defraud  future  cred- 
itors.^ 

§  271.  Burden  of  proof. — In  general  the  obligation  of 
proving  a  fact  rests  upon  the  party  who  substantially  asserts 
the  affirmative  of  the  issue.^  With  the  possible  exception 
of  conveyances  to  a  wife  by  a  husband,^  the  burden  of  proof, 
in  cases  where  the  instrument  is  valid  upon  its  face,  gener- 
ally rests  upon  the  creditor  to  show  a  fraudulent  intent  or 
absence  of  consideration.**  A  creditor  may  succeed  under 
the  statute  in  New  York  simply  by  proving  a  fraudulent 
intent.^  If,  however,  the  vendee  having  the  burden  thus 
cast  upon  him,^  shows  that  valuable  consideration  was  paid 
for  the  transfer  of  the  property  in  controversy,  then  proof 
of  the  vendor's  fraudulent  intent  is  insufficient ;  there  must 
be  evidence  of  a  fraudulent  intent  on  the  part  of  the 
vendee,'''  or  proof  that  he  had  notice  of  the  vendor's  evil 
design.^  Where  a  strong  doubt  of  the  integrity  of  the 
transaction  is  created,  the  duty  of  making  full  explanation, 
and  the  burden  of  proof  to  sustain  the  transfer,  rests  with 


•  See  Chap.  VI.,  §§96-101.  652;   Starin  v.   Kelly,  88   N.  Y.  421  ; 

'  Greenl.    Ev.    §  74 ;     Tompkins    v.  Tompkins    v.   Nichols,    53    Ala.    197 ; 

Nichols,   53  Ala.    197.     The   right   to  Barkow  v.  Sanger,  47  Wis.  500;  Kel- 

open  and  conclude  especially  on  the  logg  v.  Slauson,  11  N.  Y.  304;  Pusey 

trial  and  sifting  of  facts  to  unravel  the  v.  Gardner,  21  W.  Va.  476  ;    Hale  v. 

subtleties  of  fraud,  is  an  important  legal  West  Va.  Oil  &  Land  Co.,  il  W.  Va. 

right  and  if  improperly  denied  demands  229  ;  Kruse  v.  Prindle,  8  Oregon  1 58  ; 

the  granting  of  a  new  trial.     Royce  v.  Townsend  v.  Stearns,  32  N.  Y.  209. 

Gazan,  76  Ga.  79.  *  Starin  v.  Kelly,  88  N.  Y.  421. 

•*  See  Chap.  XX.  '  Throckmorton    v.  Rider,  42  Iowa 

■•  See  §§  5,  6.     Fuller  v.  Brewster,  53  86. 

Md.  359;  Cooke  V.  Cooke,  43  Md.  533 ;  ^  Jones     v.    Simpson,      116    U.    S. 

Anderson  v.  Roberts,  18  Johns.  (N.  Y.)  609. 

515;   Mehlhop  V.  Pettibone,   54  Wis.  *  See  Chap.  XIV.,  §§  196,  197. 


378  SECRET    TRUST.  §   272 

the  insolvent.^     The  fraud  must  be  established  by  the  party 
alleging  it  by  a  fair  preponderance  of  proof.^ 

§  272.  Secret  trust. — The  most  common  forms  of  fraudu- 
lent conveyances  are  those  in  which  a  secret  trust  or  benefit 
is  reserved  for  the  debtor.  Manifestly  the  law  will  not 
permit  an  insolvent  to  sell  his  land  and  convey  it  without 
apparent  reservation,  and  yet  secretly  retain  for  himself  the 
right  to  occupy  it  for  a  limited  time  for  his  own  benefit.' 
A  transfer  of  this  character,  even  though  founded  upon  a 
good  consideration,  lacks  the  elements  of  good  faith,  is  not 
what  it  purports  to  be,  conceals  the  real  agreement  existing 
between  the  parties,  confers  upon  the  debtor  the  enjoy- 
ment of  a  valuable  right  which  it  is  intended  to  place  be- 
yond the  reach  of  creditors,  and  constitutes  a  fraud  upon 
them.*  It  is  immaterial  whether  the  trust  is  express  and 
apparent  upon  the  face  of  the  deed  or  is  implied  from  ex- 
trinsic circumstances.^  The  whole  estate  of  the  debtor  is 
in  theory  of  law  liable  for  the  payment  of  his  debts,  and  it 
is  fraudulent  to  conceal  or  secrete  any  part  of  the  insol- 
vent's property  from  his  creditors.^  Where  a  father  caused 
foreclosure  proceedings  to  be  brought  against  himself,  and 
his  son  became  the  purchaser,  and  the  creditors  of  the  latter 
proceeded  to  acquire  such  interest,  it  was  held  that  the 
father  would  not  be  permitted  to  give  evidence  of  a  secret 
trust  in  the  son  for  the  benefit  of  the  father." 


'  Clements  v.   Moore,  6  Wall.   315.  Hun  (N.  Y.)  125;  Dean  v.  Skinner,  42 

See  also  Piddock  V.  Brown,  3  P.  Wms,  Iowa  418;    Sims   v.    Gaines,  64  Ala, 

289 ;  Wharton  V.  May,  5  Ves,  49.  392-397;    Rice    v.    Cunningham,    116 

*  Brown  v.  Herr,  21  Neb.  128.  Mass.    469;    Giddings    v.    Sears,    115 

'  Lukins  v.  Aird,  6  Wall.  79.     See  Mass.  505.     See  Macomber  v.  Peck,  39 

Wooten  V.  Clark,  23  Miss.  76;  Arthur  Iowa  351. 

V.  Commercial  &  R.R.  Bank,  17  Miss.         '  Coolidge  v.  Melvin,  42  N.  H.  510  ; 

394;  Towle  V.  Hoit,  14  N.  H.  61 ;  Paul  Rice  v.  Cunningham,  116  Mass.  469. 
V.  Crooker,  8  N.   H.  288  ;    Smith   v.         «  Sparks  v.  Mack,  31  Ark.  670 ;  Paul 

Lowell,  6  N.  H.  67;  Hills  v.  Eliot,  12  v.  Crooker,  8   N.  H.  288;    Moore  v. 

Mass.  26.  Wood,  100  111.  454;  Conover  v.  Beck- 

■*  See  §  22.     Young  v.  Heermans,  66  ett,  38  N.  J.  Eq.  384.     See  Chap.  II. 
N.  Y.  382;  Crouse  v.  Frothingham,  27        "  Conover  v.  Beckett,  38  N,  J.  Eq.  384. 


§  2  73  INSOLVENCY    OF    DEBTOR.  379 

Secret  trusts  are  manifestly  most  difficult  to  establish  in 
court.  Surrounding  circumstances  and  the  relations  of  the 
parties  and  their  conduct  and  bearing  may  be  given  in  evi- 
dence. Sometimes  the  isolated  bits  of  evidence  shadowing 
forth  the  secret  arrangement  or  benefit  seem  most  inconclu- 
sive and  unsatisfactory,  but  when  grouped  together  and 
considered  as  a  whole  the  fraudulent  device  can  be  very 
clearly  made  to  appear. 

§  273.  Proof  of  insolvency  of  debtor. — The  term  insolvent 
is  usually  applied  to  one  whose  estate  is  not  sufficient  to 
pay  his  debts,  or  a  person  who  is  unable  to  pay  all  his  debts 
from  his  own  means.*  On  the  other  hand,  a  party  is  sol- 
vent who  has  property  subject  to  legal  process  sufficient  to 
satisfy  all  his  obligations.^  An  embarrassed  debtor  may  of 
course  effect  any  sales  of  his  property  which  he  deems  ad- 
vantageous, to  enable  him  to  raise  the  necessary  means  for 
paying  off  his  creditors,  and,  within  reasonable  restrictions, 
to  prevent  its  sacrifice  at  forced  sale  under  execution,  and 
for  this  purpose  the  law  generally  recognizes  his  right  to 
sell  either  for  cash  or  on  credit.^ 

Proof  of  insolvency  of  the  debtor  at  the  date  of  the 
alienation  is  frequently  Of  vital  importance  in  creditors' 
suits.  How  can  the  evidence  upon  this  point  be  best  ad- 
duced ?  The  rule  has  been  formulated  that  "the  opinion 
of  a  witness  that  a  person  is  solvent  or  insolvent  is  inad- 


1  Riper  v.  Poppenhausen,  43  N.  Y.  "  open  and  notorious  insolvency,"  is 
68  ;  Marsh  v.  Dunckel,  25  Hun  (N.  Y.)  said  to  imply  not  the  want  of  sufficient 
169,  170.  See  Buchanan  v.  Smith,  16  property  to  pay  all  of  one's  debts,  but 
Wall.  308  ;  Herrick  v.  Borst,  4  Hill  (N.  the  absence  of  all  property  within  reach 
Y.)  652  ;  Brouwer  v.  Harbeck,  9  N.  Y.  of  the  law,  applicable  to  the  payment 
594.  of  any  debt.     Hardesty  v.  Kinworthy, 

2  Herrick   v.    Borst,  4   Hill   (N.  Y.)  8  Blackf.  (Ind.)  304. 

652  ;  approved,  Walkenshaw  v.  Perzel,  ^  Dougherty  v.  Cooper,  77  Mo.  531. 

32  How.  Pr.  (N,  Y.)  240;  Brouwer  v.  See  Hickey  v.  Ryan,  15  Mo.  62  ;  Buck- 

Harbeck,  9  N.  Y.  594.     See  Eddy  v.  ner  v.  Stine,  48  Mo.  407  ;  Waddams  v. 

Baldwin,    32    Mo.    374;    McKown    v.  Humphrey,  22  111.  663;  Nelson  v.  Smith, 

Eurgason,   47   Iowa  637.     The   term  28  111.  495.     See  §  52. 


38o 


INSOLVENCY    OF    DEBTOR. 


§  273 


missible."^  In  Denman  v.  CampbelP  this  question  was 
put:  "  Is  Donal  Campbell  a  man  of  responsibility?"  and 
the  answer  given  under  objection  was  :  "  So  far  as  I  know, 
he  was  not  responsible."  The  reception  of  this  evidence 
was  held  to  be  error.  In  a  case  which  arose  in  New  York, 
in  which  the  primary  and  all-important  question  was  whether 
a  corporation  was  solvent  or  not,  many  of  the  witnesses 
examined  on  the  point  expressed  nothing  more  than  an 
opinion  upon  the  subject,  without  referring  to  any  facts 
from  which  such  opinion  was  formed.  It  was  very  prop- 
erly ruled  that  such  evidence  was  entirely  insufficient,  and 
could  never  form  a  basis  for  any  action  of  the  court.^     Evi- 


'  Lawson  on  Expert  &  Opinion  Evi- 
dence, p.  515.  Citing  Brice  v.  Lide,  30 
Ala.  647 ;  Nuckolls  v.  Pinkston,  38 
Ala,  615  ;  Royall  v.  McKenzie,  25  Ala. 
363.  But  see  Breckinridge  v.  Taylor, 
5  Dana  (Ky.)  114;  Crawford  v.  An- 
drews, 6  Ga.  244 ;  Riggins  v.  Brown, 
12  Ga.  273;  Sherman  v.  Blodgett,  28 
Vt.  149. 

'  7  Hun  (N.  Y.)  88.  In  Babcock  v. 
Middlesex  Sav.  Bank,  28  Conn,  306, 
the  court  said  :  "  We  think  that  the 
court  below  erred  in  receiving  the 
opinion  of  the  judge  of  probate  as  to 
the  pecuniar)'  ability  of  H.  D.  Smith, 
for  the  purpose  of  rebutting  the  evi- 
dence adduced  by  the  defendants  to 
show  that  he  was  destitute  of  property. 
The  witness  did  not  profess  to  have 
any  knowledge  whatever  in  regard  to 
the  property  or  pecuniary  circumstances 
of  Smith,  or  any  means  of  forming  a 
judgment  or  opinion  on  that  subject, 
excepting  from  the  style  in  which  he 
and  his  family  lived,  the  manner  of  his 
leaving  the  State,  and  the  fact  that  he 
had  made,  before  the  court  of  probate, 
no  disclosure  of  his  property  under 
oath,  in  the  proceedings  in  insolvency 
against  him.  Although,  as  to  the  value 
of  property  we  resort  to  the  judgment 
or  opinion  of  persons  acquainted  with 


it,  its  existence  and  ownership  are  facts 
to  be  proved,  whether  directly  or  other- 
wise, like  other  facts,  by  the  knowledge 
of  witnesses,  and  not  by  their  opinions, 
inferences  or  surmises,  derived  from 
whatever  source.  The  present  is  not 
like  the  cases  where  an  opinion  is 
sought  of  an  expert ;  or  those  in  which, 
for  certain  purposes,  the  reputation  of 
a  person  as  to  pecuniary  ability  may  be 
shown  by  witnesses  who  have  no  per- 
sonal knowledge  of  his  situation.  The 
inquiry  here  was  not  whether  Smith 
was  reputed  to  be,  but  whether  he  was 
in  fact,  destitute  of  property.  On  such 
an  inquiry  nothing  could  be  more  dan- 
gerous than  to  receive  the  opinions  of 
persons  founded  on  such  fallacious 
grounds  as  common  rumor,  or  a  man's 
professions  as  to  his  circumstances,  or 
the  representations  or  opinions  of  oth- 
ers, or,  what  in  many  cases  is  still  less 
to  be  relied  on,  his  style  or  manner  of 
living." 

3  See  Brundred  v.  Paterson  Machine 
Co.,  4  N.  J.  Eq.  295.  Compare  Ninin- 
ger  V.  Knox,  8  Minn,  140 ;  Andrews  v. 
Jones,  10  Ala.  460,  In  Sherman  v, 
Blodgett,  28  Vt,  149,  the  court  said  : 
"  The  solvency  of  an  individual  is  a 
matter  resting  somewhat  in  opinion j 
and,  in  the  present  case,  the  witness 


§274  INSOLVENCY    OF    VENDEE.  38 1 

dence  that  a  man  was  generally  reputed  to  be  insolvent  is 
competent  upon  the  theory  that  the  fact  to  be  proved  is  of 
a  negative  character,  scarcely  admitting  of  direct  and  posi- 
tive proof.^  In  the  great  majority  of  cases  it  would  be 
impracticable,  and  exceedingly  tedious  and  expensive,  to 
procure  any  other  proof  of  insolvency  than  that  of  general 
reputation  in  the  community  where  the  debtor  resides  and 
is  known.^  If  the  witness  is  able  to  state  numerous  facts 
touching  the  property  of  the  debtor,  and  the  amount  of  his 
indebtedness,  which  show  a  very  full  and  intimate  acquaint- 
ance with  his  affairs  and  his  utter  insolvency,  he  may  be 
permitted  to  answer  a  question  whether  or  not  the  debtor 
was  able  to  pay  his  debts  at  a  particular  time,  in  the  usual 
course  of  business.  This  is  considered  as  calling  for  a  fact 
and  not  for  the  opinion  of  the  witness.^  We  may  here 
state  that  there  is  no  presumption  of  law,  arising  from 
knowledge  of  insolvency,  that  the  assignee  knew  of  the 
debtor's  intention  to  defraud  creditors.^ 

§  274.  Insolvency  of  vendee. — The  ability  of  the  vendee 
to  pay  the  purchase-money  for  the  property  before  and  at 
the  time  of  the  transaction,  is  a  material  circumstance  for 
the  consideration  of  the  jury,  and  testimony  upon  that 
point  should  be  admitted.^     For  the  purpose  of  showing 

had    stated    what    property    the    bail  kins  v.  Worthington,  2  Bland  (Md.) 

owned  at  the  time  he  entered  bail,  and  509,  540,  541. 

his   means  of  knowing  the   situation  ^  Thompson  v.  Hall,  45  Barb.  (N.  Y.) 

and   circumstances   of  the   bail  ;    cer-  216.     See  Blanchard  v.  Mann,  i  Allen 

tainly  there  could  then  be  no  objection  (Mass.)  433  ;  Iselin  v.  Peck,  2  Rob.  (N. 

to    his   giving    his    opinion    from    his  Y.)  629. 

knowledge  of  the  bail,  and  of  his  af-  ■•  Cannon   v.  Young,  89  N.  C.  264. 

fairs,  what  he  thought  he  was  worth."  On  the  issue  whether  a  conveyance  of 

'  Nininger  v.   Knox,  8    Minn.  148;  real  estate  is  fraudulent  as  to  creditors, 

Griflfith  V.  Parks,  32  Md.  4  ;  Crawford  evidence  of  the  register  of  deeds  for  the 

V.  Berry,  6  Gill  &  J.  (Md.)  63  ;  Metcalf  district  in  which  the  estate  lies,  that  he 

V.    Munson,    10    Allen    (Mass.)    493  ;  has  searched  the  records  of  the  regis- 

Bank  of  Middlebury  v.  Rutland,  33  Vt.  try,  and  found  that  there  was  no  other 

414  ;  Lee  v.  Kilburn,  3  Gray  (.Mass.)  property  standing  in  the  name  of  the 

594.  grantor,  is  admissible.    Bristol  Co.  Sav. 

*  Griffith  V.  Parks,  32  Md.  4;  Wat-  Bank  v.  Keavy,  128  Mass.  298. 

'  Johnson  v.  Lovelace,  51  Ga.  19. 


o 


82  GENERAL    REPUTATION.  §  ^75 


that  a  mortgage  is  fraudulent,  it  is  competent  to  prove  that 
in  the  country  where  the  mortgagee  was  born  and  grew  up, 
and  continued  to  reside,  he  was  never  known  to  have  any 
property  or  means,  or  to  be  engaged  in  any  business,^  and 
was  not  in  a  position  to  lend  money.^  So  the  creditor  may 
show  that  the  grantee  was  a  married  woman,  having  no 
separate  estate,  notoriously  poor,  and  destitute  of  means  to 
make  the  payment  claimed  or  contemplated.^  Testimony 
of  this  kind  is  often  of  vital  importance  to  creditors,  as 
nothing  is  more  common,  or  more  persuasive  to  the  minds 
of  a  court  or  a  jury  as  to  the  presence  of  fraud,  than  proof 
that  the  debtor's  property  has  passed  into  the  hands  of  an 
irresponsible  figurehead  who  was  not  possessed  of  the 
means  with  which  to  purchase  it,  and  had  no  use  for  it. 

§  275.  General  reputation. — Evidence  of  the  general  repu- 
tation of  all  the  parties  to  an  alleged  fraudulent  transaction, 
as  to  their  credit  and  pecuniary  responsibility,  may  be  ad- 
mitted.'^ In  this  respect  the  general  reputation  of  the 
grantor  is  a  fact  which,  with  other  circumstances,  has  some 
tendency  to  show  that  the  grantee  understood  his  motives 
in  making  the  conveyance,  and  possibly  participated  in  his 
unlawful  purpose  ;  and  proof  of  the  grantee's  want  of 
credit  would  have  a  tendency  to  show  that  the  conveyance 
was  not  made  in  good  faith,  especially  if  made  in  reliance 
upon  his  future  ability  to  pay.^  Evidence  that  the  grantee's 
general  credit  was  bad,  though  somewhat  remote,  cannot 
be  said  to  be  incompetent.^  Where  fraud  is  charged  and 
sought  to  be  established  by  proof  of  circumstances,  evi- 


'  Stebbins  v.  Miller,  12  Allen  (Mass.)  S.  C.  sul>  nom.  Gordon  v,  Ritenour,  87 

597.  Mo.  54. 

^  Demeritt  v.  Miles,  22  N.  H.  523.  *  Sweetser  v.  Bates,  117  Mass.  468. 

*  Amsden  v.  Manchester,  40  Barb.  ^  Cook  v.  Mason,  5  Allen  (Mass.) 
(N.  Y.)  163.  See  s.  P.  Danby  v.  Sharp,  212.  Compare  Lee  v.  Kilburn,  3  Gray 
2  MacAr.  (D.  C.)  435  ;  Stevens  v.  Dill-  (Mass.)  594;  Metcalf  v.  Munson,  10 
man,  86  111,  233;  Castle  v.  Bullard,  23  Allen  (Mass.)  491  ;  Amsden  v,  Man- 
How.  186.  Chester,  40  Barb.  (N.  Y.)  163. 

*  Hall  V.  Ritenour,  2  West.  Rep.  496 ; 


§§  276,   2  77  CONCERNING    RES    GEST.€.  38 


0"0 


dence  of  general  good  character  is  admissible  to  repel  it,  as 
in  criminal  cases.^ 

§  276.  Concerning  res  gestae. — Where  it  becomes  neces- 
sary to  discover  the  intention  of  a  person,  or  to  investigate 
the  nature  of  a  particular  act,  evidence  of  what  the  person 
said  at  the  time  of  doing  it  is  received  as  part  of  the  res 
gestcs^  This  important  doctrine  has  been  liberally  applied 
in  the  United  States,  and  especially  in  the  class  of  litiga- 
tion under  consideration.  Thus  a  wife  may  employ  her 
husband  as  an  agent,  and  his  utterances  while  so  acting,  in 
taking  a  bill  of  sale,  constitute  part  of  the  res  gestcB  and 
are  competent  evidence  for  the  wife.^  The  declarations  ac- 
companying an  act  are  admissible  as  explanatory  of  the 
character  and  motives  of  the  act.*  They  in  this  way  be- 
come part  of  the  res  gestae.  It  is  the  duty  of  the  jury  to 
determine  the  weight  of  these  declarations,  by  ascertaining 
whether  they  were  sincere  or  were  made  to  withdraw  atten- 
tion from  the  real  nature  of  the  act,  or  to  hide  the  real 
purpose  of  it.^  But  declarations  which  are  merely  narra- 
tive of  a  past  transaction  are  not  admissible  as  part  of 
the  res  gestce.^' 

§  277.  Declarations  before  sale — Realty  and  personalty. — 
The  conduct  and  declarations  of  the  grantor  respecting  the 
estate  conveyed,  tending  to  prove  a  fraudulent  intention 
on  his  part  before  the  conveyance,  are  proper  evidence  for 
the  jury  upon  an  inquiry  into  the  validity  of  the  convey- 
ance by  a  creditor  or  subsequent  purchaser,  who  alleges 
that  it  is  fraudulent.'^     This  evidence  is  considered  compe- 


'  Werts  V.  Spearman,  22  S.  C.  219.  '  Kelly  v.  Campbell,  i  Keyes  (N.  Y.) 

5  Waldele  v.  New  York  Central  &  H.  2c. 

R.  R.R.  Co.,  95  N.  Y.  274;  Hanover  ■•  See  Stewart  v.  Fenner,  81   Pa.  St. 

Railroad  Co.  v.  Coyle,  55  Pa.  St.  396  ;  177. 

Loos  V.   Wilkinson,    no  N.  Y.   211;  '  Potter  v.  McDowell,  31  Mo.  74. 

Moore   v.    Meacham,    10  N.  Y.  207  ;  *  Waldele  v.  New  York  Central  &  H. 

Schnicker   v.    People,    88   N.  Y.  192;  R.  R.R.  Co.,  95  N.  Y.  274. 

Swift  V.  Mass.  Mutual  Life  Ins.  Co.,  63  '  Bridge  v.  Eggleston,  14  Mass.  245, 

N.  Y.  186.  per  Parker,  C.  J.;  S.  C.  7  Am.  Dec.  209. 


•584  DECLARATIONS    AFTER    SALE.  §   278 

tent  to  prove  that  the  conveyance  was  fraudulent  on  the 
part  of  the  grantor,  and  does  not  prejudice  the  grantee, 
who  is  not  affected  if  he  is  a  bona  fide  purchaser  for  a  valu- 
able consideration.  To  avoid  the  transaction  as  covinous 
fraudulent  intent  must,  as  we  have  said,  be  shown  on  the 
part  of  the  grantee  as  well  as  of  the  grantor.'  So  admis- 
sions made  by  one  who,  at  the  time,  held  the  title  to  land, 
to  the  efifect  that  he  had  contracted  to  sell  it  to  another, 
and  had  received  payment  for  it,  are  competent  evidence 
against  those  claiming  title  under  him.^  The  principle 
upon  which  such  evidence  is  received  is  that  the  declarant 
was  so  situated  that  he  probably  knew  the  truth,  and  his 
interests  were  such  that  he  would  not  have  made  the  ad- 
missions to  the  prejudice  of  his  title  or  possession  unless 
they  were  true.  The  regard  which  one  so  situated  would 
have  for  his  own  interest  is  considered  sufficient  security 
against  falsehood.  In  New  York,  after  some  uncertainty, 
the  rule  was  finally  settled^  that  such  admissions  in  contro- 
versies concerning  personal  property  would  be  excluded.'' 

§  278.   Declarations  of  debtor  after  sale. — As   a  general 
rule  the  declarations  of  a  vendor,  after  transfer  and  delivery 

See  Alexander  v.  Caldwell,  55  Ala.  517  ;  sequent  to  the  assignment."    See  Bush 

Knox  V.  McFarran,  4  Col.  596;   Ran-  v.  Roberts,  in  N.  Y.  278.    This  state- 

degger  v.  Ehrhardt,  51  111.  loi  ;  Chase  ment  of  the  rule  would  seem  to  be  in- 

V.  Chase,  105   Mass.  388  ;    Stowell  v.  accurate.   While  a  party  holds  the  title 

Hazelett,  66  N.  Y.  635  ;  Davis  v.  Stern,  and  possession  it  would  clearly  seem 

15  La.  Ann.  177;   McKinnon  v.  Reli-  to  be  competent  to  give  evidence  of  his 

ance  Lumber  Co.,  63  Texas  31.     See  declarations  made  while  the  possession 

Elliott  V.  Stoddard,  98  Mass.  145  ;  Mc-  continued  as  characterizing  the  nature 

Lane  v,  Johnson,  43  Vt.  48  ;   Wyckoff  of  it.    Compare  in  this  connection  Von 

V.  Carr,  8  Mich.  44.     In  Truax  v.  Sla-  Sachs  v.  Kretz,  72  N.  Y.  548 ;    Loos  v. 

ter,  86  N.  Y.  632,  Earl,  J.,  is  reported  Wilkinson,   no  N.  Y.  195;   Clews  v. 

in  memorandum  to  have  said  :   "  The  Kehr,  90  N.  Y.  633. 

mere  declarations  of  an  assignor  of  a  '  Carpenter  v.  Muren,  42  Barb.  (N. 

chose  in  action,  forming  no  part  of  any  Y.)  300  ;    Hughes  v,    Monty,  24  Iowa 

res  gestcB,  are  not  competent  to  preju-  499.     See  Chap.  XIV. 

dice  the  title  of  his  assignee,  whether  ''  Chadwick  v.  Fonner,  69  N.  Y.  404. 

the  assignee  be  one  for  value,  or  merely  ^  Paige  r.  Cagwin,  7  Hill  (N.  Y.)  361  ; 

a  trustee   for  creditors,  and   whether  Chadwick  v.  Fonner,  69  N.  Y.  407. 

such  declarations  be  antecedent  or  sub-  ••  Chadwick  v.  Fonner,  69  N.  Y.  407. 


§278 


DECLARATIONS  AFTER  SALE. 


385 


of  possession,  cannot  be  given  in  evidence  asjainst  the 
vendee.'^  Such  declarations  are  mere  hearsay,"^  and  not 
made  under  the  sanction  of  an  oath  ;  the  debt(jr  bears  no 
relation  to  the  estate,  and  it  has  been  frequently  held  that 
exceptions  to  the  exclusion  of  this  class  of  evidence  should 
not  be  multiplied.  A  vendor  after  parting  with  his  prop- 
erty has  no  more  power  to  impress  the  title,  eitlier  by  his 
acts  or  utterances,  than  a  mere  stranger.^    The  declarations 


i  Tilson  V.  Terwilliger,  56  N.  Y.  277  ; 
Cuyler  v.  McCartney,  40  N.  Y.  221  ; 
Chase  V.  Horton,  143  Mass.  118; 
Roberts  v.  Medbery,  132  Mass.  100; 
Winchester  &  Partridge  Mfg.  Co.  v. 
Creary,  116  U.  S.  161  ;  Burnham  v. 
Brennan,  74  N.  Y.  597  ;  Redfield  v. 
Buck,  35  Conn.  328 ;  Tabor  v.  Van 
Tassell,  86  N.  Y.  642  ;  Randegger 
V.  Ehrhardt,  51  111.  loi  ;  Kennedy  v. 
Divine,  ^'j  Ind.  493  ;  Garner  v.  Graves, 
54  Ind.  188;  Hirschfeld  v.  Will- 
iamson, I  West  Coast  Rep.  150; 
Meyer  v.  Va.  &  T.  R.R.  Co.,  16  Nev. 
343;  Sumner  v.  Cook,  12  Kans.  165  ; 
Scheble  v.  Jordan,  30  Kans.  353.  In 
Holbrook  v.  Holbrook,  113  Mass.  76, 
Ames,  J.,  said  :  "  It  has  often  been 
held,  and  is  a  well-established  rule,  that 
upon  the  trial  of  the  question  whether 
a  particular  conveyance  was  made  to 
defraud  creditors,  it  is  not  competent 
to  show  the  acts  or  declarations  of  the 
grantor  after  the  conveyance,  to  impair 
or  affect  the  title  of  the  grantee." 
Citing  Bridge  v.  Eggleston,  14  Mass. 
245;  Foster  v.  Hall,  12  Pick.  (Mass.) 
89 ;  Aldrich  v.  Earle,  1 3  Gray  (Mass.) 
578 ;  Taylor  v.  Robinson,  2  Allen 
(Mass.)  562.  See  Clements  v.  Moore, 
6  Wall.  299  ;  Lewis  v.  Wilcox,  6  Nev. 
215  ;  Thornton  v.  Tandy,  39  Tex.  544  ; 
Pier  v.  Duff,  63  Pa.  St.  59 ;  City  Nat. 
Bank  v.  Hamilton,  34  N.  J.  Eq.  163; 
Garrahy  v.  Green,  32  Tex.  202  ;  Taylor 
V,  Webb,  54  Miss.  36  ;  Warren  v.  Will- 
iams, 52  Me.  346  ;  Bullis  v.  Montgom- 
25 


ery,  50  N.  Y.  358 ;  Wadsworth  v.  Will- 
iams, 100  Mass.  126;  Winchester  v. 
Charter,  97  Mass.  140.  Compare 
Truax  v.  Slater,  86  N.  Y.  630;  Bullis 
V.  Montgomery,  50  N.  Y.  358. 

^  In  Winchester  &  Partridge  Mfg. 
Co.  V.  Creary,  116  U.  S.  165,  the  court 
said  :  "  The  plaintiff  was  itself  in  actual 
possession,  exercising  by  its  agent  full 
control.  The  vendors,  it  is  true,  en- 
tered plaintiff's  service  as  soon  as  the 
sale  was  made  and  possession  was  sur- 
rendered, but  only  as  clerks  or  sales- 
men, with  no  authority  except  such  as 
employees  of  that  character  ordinarily 
exercise.  What  they  might  say,  not 
under  oath,  to  others,  after  possession 
was  surrendered,  as  to  the  real  nature 
of  the  sale,  was  wholly  irrelevant.  They 
were  competent  to  testify  under  oath, 
and  subject  to  cross-examination,  as 
to  any  facts  immediately  connected 
with  the  sale,  of  which  they  had  knowl- 
edge ;  but  their  statements  out  of 
court,  they  not  being  parlies  to  the 
issues  to  be  tried,  were  mere  hearsay. 
After  the  sale,  their  interest  in  the 
property  was  gone.  Having  become 
strangers  to  the  title,  their  admissions 
are  no  more  binding  on  tiie  vendee 
than  the  admissions  of  others.  It  is 
against  all  principle  that  their  declara- 
tions, made  after  they  had  parted  with 
the  title  and  surrendered  possession, 
should  be  allowed  to  destroy  the  title 
of  their  vendee." 

'  Stewart  v.  Thomas,  35  Mo.  207. 


386  POSSESSION    AFTER    CONVEYANCE.  §   279 

of  a  former  owner  to  qualify  or  disparage  his  title  are  only- 
admissible  when  made  while  the  title  is  in  him.  Such 
utterances  cannot  be  allowed  to  affect  a  title  which  is  sub- 
sequently acquired.^  The  declarations  of  the  grantee 
while  on  his  way  to  the  magistrate  to  obtain  the  acknowl- 
edgment of  the  grantor,  and  before  the  deeds  were  deliv- 
ered, substantially  to  the  effect  that  the  deeds  were  being 
executed  because  of  apprehensions  on  the  part  of  the 
grantor  that  the  property  would  be  taken  to  satisfy  the 
debt  due  the  demandant  were  excluded,  because  the  deed 
had  not  been  delivered  at  the  time  the  declarations  were 
made,  and  it  was  clear  that  "  as  admissions  in  disparage- 
ment of  title,  the  evidence  was  not  competent."^ 

§  279.  Possession  after  conveyance. — Elsewhere  in  this 
discussion  the  failure  to  effect  a  change  of  possession  is 
shown  to  raise  either  a  prmia  facie  or  absolute  presump- 
tion of  fraud.^  As  proof  of  the  continued  possession  of 
the  vendor  is  competent  evidence  to  impeach  the  supposed 
transfer,  it  would  seem  to  follow  that  any  acts  or  declara- 
tions of  the  possessor  while  so  retaining  the  property  must 
also  be  competent  as  characterizing  his  possession.*  So 
rlong  as  the  debtor  remains  in  possession  of  property  which 
^  once  belonged  to  him,  and  which  his  creditor  is  seeking  to 


'  Noyes  v.  Morrill,  108  Mass.  396;  63  Barb.  (N.  Y.)  311 ;   Hilliard  v.  Phil- 

Stockwell  V.  Blarney,  129  Mass.  312.  lips,  81  N.  C.  104,  Smith,  C.  J.,  dis- 

''■  Stockwell    V.  Blarney,    129   Mass.  senting  upon  the  ground  that  the  dec- 

312.  larations  in   this  latter  case   did  not 

^  See  Chap.  XVII.,  §§  248-252.  qualify  or  explain  the  possession,  nor 

■•  Kirby   v.   Masten,   70  N.  C.  540;  disparage  declarant's  title,  but  related 

Carnahan  v.    Wood,  2  Swan   (Tenn.)  to  a  pre-existing  fact  to  impeach  the 

502 ;  Yates  v.   Yates,  76  N.  C.   142 ;  validity  and  effect  of  his  own  act  in 

Haenschen  V.  Luchtemeyer,  49M0.  51 ;  conveying  title.     Its  incompetency  for 

Carney  v.  Carney,  7  Bax.  (Tenn.)  287  ;  such  a  purpose  he  considered  fully  es- 

Tedrovve  v.  Esher,  56  Ind.  447  :  Unit-  tablished  by  the  authorities,     i  Greenl. 

ed  States  V.  Griswold,  8  Fed.  Rep.  560  ;  Ev.  §§  109,  no;  Ward   v.  Saunders, 

Cahoon  V.  Marshall,  25  Cal.  202;  Oatis  6    Ired.  (N.  C.)   Law   382;    Wise  v. 

v.  Brown,  59  Ga.  716  ;  Mills  v.  Thomp-  Wheeler,    6   Ired.  (N.    C.)    Law  196; 

son,  72  Mo.  369 ;   Adams  v.  Davidson,  Hodges  v.  Spicer,  79  N.  C.  223  ;  Bur- 

jo  N.  Y.  309.     See  Knight  v.  Forward,  bank  v.  Wiley,  79  N.  C.  501. 


§  28o  DECLARATIONS    OF   CO-CONSPIRATORS.  387 

condemn  as  fraudulently  conveyed,  the  res  gestce  of  the 
fraud,  if  any,  may  be  considered  as  in  progress,  and  his 
declarations,  though  made  after  he  has  parted  with  the 
formal  paper  title,  may  be  given  in  evidence  for  the  cred- 
itor against  the  claimant,^  by.  reason  of  the  continuous  pos- 
session which  accompanied  them.  Where  the  assignor 
continues  in  possession  of  the  assigned  property,  his  acts 
and  declarations  while  in  actual  possession  may  be  giv^en  in 
evidence  as  part  of  the  res  gesice,^  especially  if  there  is  ab- 
solutely no  break  made  in  the  continuity  of  the  possession 
after  the  real  or  pretended  sale.^  The  declarations  are  re- 
ceived in  such  cases  upon  the  ground  that  they  show  the 
nature,  object,  or  motives  of  the  act  which  they  accompany, 
and  which  is  the  subject  of  inquiry.  To  be  a  part  of  the 
res  gestce,  however,  the  declarations  must  be  made  at  the 
time  the  act  was  done  which  they  are  supposed  to  char- 
acterize ;  they  must  be  calculated  to  unfold  the  nature  and 
quality  of  the  facts  which  they  purport  to  explain  ;  and 
must  harmonize  with  such  facts  so  as  to  form  one  trans- 
action.* The  declarations  must  be  concomitant  with  the 
principal  act  or  transaction  of  which  they  are  considered  a 
part,  and  so  connected  with  it  as  to  be  regarded  as  the  re- 
sult and  consequence  of  co-existing  motives.^ 

§  280.  Declarations  of  co-conspirators. — Where  it  is  proved 
that  the  debtor  and  others  have  joined  in  a  conspiracy  to 
defraud  creditors  by  a  fraudulent  disposition  of  property, 
the  acts  and  declarations  of  either  of  the  parties,  made  in 


'  Williams   v.    Hart,    10    Rep.    74  ;  it  is  said  that  the  mere  fact  that  a  per- 

citing  Oatis  v.  Brown,  59  Ga.  716.  son,  pending  a  suit  against  him,  is  in 

''■  Newlin  v.   Lyon,   49   N.   Y.  661  ;  possession  of  personal  property  which 

Williamson  v.  Williams,  1 1  Lea  (Tenn.)  he  has  sold  and  constructively  delivered, 

368  ;    Trotter  v.  Watson,    6   Humph,  is  not  prima  facie  evidence  that  the 

(Tenn.)  509.  sale  is  fraudulent  as  against  a  creditor. 

^  Adams  v.  Davidson,  10  N.  Y.  309.  This  is  certainly  a  border  case.     The 

*  Tilson  V.    Terwilliger,    56    N.    Y.  effect  of  the  failure  to  change  posses- 

277.     See  Enos  v.  Tuttle,  3  Conn.  250.  sion    is    elsewhere    considered.      See 

"  In  Towne  v.  Fiske,  127  Mass.  125,  Chap.  XVIL 


388  DECLARATIONS    OF    CO-CONSPIRATORS.  §   280 

the  execution  of  the  common  purpose,  and  in  aid  of  its 
fulfilment,  are  competent  evidence  against  any  of  the 
parties.^  Nor  is  it  of  consequence  that  the  particular  dec- 
larations under  consideration  were  in  reference  merely  to 
proposed  acts  of  fraud  which  may  not  have  been  consum- 
mated in  the  particulars  proposed,  if  such  proposed  acts 
were  sui  ge7ieris  with  those  committed.  A  foundation 
must  first  be  laid,  by  proof,  sufficient  to  establish  prima 
facie  the  fact  of  the  conspiracy  alleged  in  the  complaint. 
That  being  done,  every  declaration  of  the  participants  in 
reference  to  the  common  object  is  admissible  in  evidence. 
It  makes  no  difference  at  what  time  the  defendant  joins  the 
conspiracy.  Every  one  who  enters  into  a  common  design 
is  generally  deemed  in  law  a  party  to  every  act  which  has 
before  been  done  by  the  others,  in  furtherance  of  the  com- 
mon design  ;  and  this  rule  extends  to  declarations.^  The 
statements  of  one  of  the  co-conspirators,  however,  as  to 
past  transactions  not  connected  with  or  in  furtherance  of 
the  enterprise  under  investigation,  are  not  competent.^ 

In  case  of  conspiracy,  where  the  combination  is  proved, 
the  acts  and  declarations  of  the  conspirators  are  not  re- 
ceived as  evidence  of  that  fact,  but  only  to  show  what  was 
done,  the  means  employed,  the  particular  design  in  respect 
to  the  parties  to  be  affected  or  wronged,  and  generally 
those  details  which,  assuming  the  combination  and  the 
illegal  purpose,  unfold  its  extent  and  scope,  and  its  in- 
fluence either  upon  the  public  or  the  individuals  who  suffer 


'  Dewey  v.  Moyer,  72  N.  Y.  79,  80.  Y.  503 ;  Daniels  v.  McGinnis,  97  Ind. 

See   Newlin  v.  Lyon,  49  N.  Y.  661;  552.   See  Kelley  v.  People,  55  N.  Y.  565. 

Cuyler  v.  McCartney,  40  N.   Y,   221,  -  Tyler  v.  Angevine,  isBlatchf.  541  ; 

per  Woodruff,  J.  ;  Tedrowe  v.  Esher,  i  Greenleaf's  Ev.  §111. 

56  Ind.  445  ;   Sherman  v.  Hogland,  73  ^  N.  Y.  Guar.  &  Ind.  Co.  v.  Gleason, 

ind.  472  ;  Stewart  v.  Johnson,  18  N.  J.  78  N.  Y.  503.     See  Johnston  v.  Thomp- 

Law  87  ;  Lee   v.  Lamprey,  43   N.  H.  son,    23    Hun    (N.    Y.)    90 ;    Baptist 

13;  Kennedy  v.  Divine,  ']']  Ind.  493;  Church  v.  Brooklyn  F.  I.  Co.,  28  N. 

Adams  v.  Davidson,  10  N.  Y.  309;  N.  Y.  153;  Cortland  Co.  v.  Herkimer  Co., 

Y.  Guaranty,  etc,  Co.  v.  Gleason,  78  N.  44  N.  Y.  22. 


§   28l  PROOF    OF    CIRCUMSTANCES.  389 

from  the  wrong,  or  show  the  exeadion  of  the  illegal  design. 
But  when  the  only  issue  is  whether  there  was  a  conspiracy 
to  defraud,  these  declarations  do  not  become  evidence  to 
establish  it.^  The  court  may  in  its  discretion  receive  the 
declaration  first  and  the  evidence  of  connection  subse- 
quently,^ though  it  is  conceded  that  the  rule  calling  for 
preliminary  proof  should  not  be  departed  from  except 
under  particular  and  urgent  circumstances.  It  has  been 
said  that  the  testimony  of  one  witness  is  enough  to  let  in 
the  acts  and  declarations  of  a  wrong-doer,  and  that  the 
court  will  not  decide  upon  the  question  of  his  credibility  ;^ 
and  in  Pennsylvania  the  rule  seems  to  prevail  that  the  least 
degree  of  concert  or  collusion  between  parties  to  an  illegal 
transaction  makes  the  act  of  one  the  act  of  all.* 

§  281.  Proof  of  circumstances. — In  litigations  of  the  class  ifj^^J^  Cy 
under  consideration,  great  latitude  should  undoubtedly  be  ^(rr'r/.&  ^6~ 
allowed  in  regard  to  the  admission  of  circumstantial  evi- 
dence for  the  purpose  of  proving  participation  in  manifest 
fraud."      Objections   to   testimony    as   irrelevant    are    not 


'  Woodruff,  J.,  in  Cuyler  v.  McCart-  purpose  that  they  fairly  constitute   a 

ney,  40  N.  Y.  229 ;  Boyd  v.  Jones,  60  part  of  the  res  gestce.     There  was  no 

Mo.  454  ;  N.  Y.  Guaranty,  etc.  Co.  v.  such  independent  evidence  in  this  case, 

Gleason,  7  Abb.  N.   C.    (N.  Y.)   334 ;  and   there   is   no   foundation    for   the 

Kennedy  v.  Divine,  'j'j  Ind.  493.     In  charge   of  a  conspiracy   between   the 

Winchester  &  Partridge   Mfg.  Co.   v,  vendors  and  vendee  to  hinder  credit- 

Creary,  116  U.  S.  166,  the  court  said  :  ors,  outside  of  certain  statements  which 

"  Without  extending  this  opinion  by  a  Webb   is   alleged   to  have  made  after 

review  of  the  adjudged  cases  in  which  his  firm  had  parted  with  the  title  and 

there  was  proof  of  concert  or  collusion  surrendered  possession." 

between  vendor  and  vendee  to  defraud  ^  Place  v.  Minster,  65  N.  Y.  89. 

creditors,    and    in    which    subsequent  ^  Abney  v.  Kingsland,   10  Ala.  355, 

declarations  of  the  vendor  were  offered  361. 

in  evidence  against  the  vendee  to  prove  ^  Confer  v.  McNeal,  74  Pa.  St.  115; 

the  true  character  of  the  sale,  it  is  suffi-  Gibbs  v.  Neely,  7  Watts    (Pa.)    307  ; 

cient  to  say  that  such  declarations  are  Rogers  v.   Hall,  4  Watts  (Pa.)   361  ; 

not    admissible    against    the   vendee,  McDowell  v.  Rissell,  37  Pa.  St.   164; 

unless  the  alleged  common  purpose  to  Hartman  v.  Diller,  62  Pa.  St.  37. 

defraud   is    first   established   by   inde-  '  Curtis  v.  Moore,  20  Md.  96 ;  Shealy 

pendent  evidence,  and  unless  they  have  v.  Edwards,  75  Ala.   416.      See   §  13. 

such  relation  to  the  execution  of  that  Engraham  v.  Pate,  51  Ga.  537. 


290  PROOF    OF    CIRCUMSTANCES.  §  28 1 

favored  in  such  cases,  since  the  force  of  circumstances  de- 
pends SO  much  upon  their  number  and  connection.^  The 
evidence  should  be  permitted  to  take  a  wide  range,  as  in 
most  cases  fraud  is  predicated  of  circumstances,  and  not 
upon  direct  proof.^  Proof  is  said  to  estabhsh  the  truth, 
and  circumstantial  evidence  to  lead  toward  it ;  hence  any 
pertinent  and  legitimate  facts,  conducing  to  the  proof  of  a 
litigated  issue,  constitute  evidence  of  the  disputed  fact, 
stronger  or  weaker,  according  to  the  entire  character  and 
complexion  of  it,  or  as  affected  by  conflicting  evidence.'^ 
Though  the  evidence  to  prove  fraud  may  be  circumstantial 
and  presumptive,  it  "  must  be  strong  and  cogent,  such  as 
to  satisfy  a  man  of  sound  judgment  of  the  truth  of  the 
alleofation."^  But  the  alleo^ation  of  fraud  in  a  civil  action 
need  not,  like  the  charge  of  crime,  be  proved  by  evidence 
excluding  all  reasonable  doubt ;  a  preponderance  of  evi- 
dence will  suffice.^  So  it  is  not  error  to  refuse  to  charge  a 
jury  that  "  they  must  be  satisfied  from  the  clearest  and 
most  satisfactory  evidence,"  since  it  is  the  province  of  the 
jury  to  weigh  the  evidence.*  "  Circumstantial  evidence," 
said  Bradley,  J.,  "is  not  only  sufficient,  but  in  most  cases 
it  is  the  only  proof  that  can  be  adduced." '''  Often  other 
things  which  go  to  characterize  a  transaction  are  more  con- 
vincing than  the  positive  evidence  of  any  single  witness, 
especially  of  an  interested  witness.^  The  only  true  test  is 
whether  the  evidence  can  throw  light  on  the  transaction,  or 
whether  it  is  totally  irrelevant.^     It  is  the  duty  of  the  court, 

'  Sarle  v.  Arnold,  7  R.  I.  586 ;  Castle  Poole,  61  Ga,  374  ;  Sarle  v.  Arnold,  7 

V.  Bullard,  23  How.  187.  R.  I.   585  ;  Castle  v.  Bullard,  23  How. 

^  Ferris  v.  Irons,  83  Pa.  St.  182.   See  187  ;  Winchester  v.  Charter,  102  Mass. 

Wright  V.  Linn,  16  Tex.  34.  275,  276 ;  White  v.  Perry,  14  W.  Va. 

*  Miles  V.  Edelen,  i  Duv.  (Ky.)  270.  66  ;  Butler  v.  Watkins,  13  Wall.  456. 

*  Henry  v.  Henry,  8  Barb.  (N.  Y.)        »  Molitor  v.  Robinson,  40  Mich.  202. 
592.  See  Blue  v.  Penniston,  27  Mo.  274. 

*  Strader  v.  Mullane,  17  Ohio  St.  626.        '  Heath  v.  Page,  63  Pa.  St.  108-126, 

*  Painter  v.  Drum,  40  Pa.  St.  467.         and  cases  cited.     See  Stewart  v.  Fen- 
■■  Rea  V.  Missouri,  17  Wall.  543.  See    ner,  81  Pa.  St.  177  ;  Booth  v.  Bunce, 

Cooke  V.  Cooke,  43  Md.  525  ;  King  v.    33  N.  Y.  159. 


§  28 1  PROOF    OF    CIRCUMSTANCES.  39I. 

however,  to  see  that  such  evidence  has  at  least  a  natural 
and  reasonable  tendency  to  sustain  the  allegations  in  sup- 
port of  which  it  is  introduced  ;  that  it  is  of  such  a  character 
as  to  warrant  an  inference  of  the  fact  to  be  proved,  and 
amounts  to  something  more  than  a  mere  basis  for  con- 
jecture or  vague  speculation.^  Evidence  may  be  legally 
admissible  as  tending  to  prove  a  particular  fact  which  by 
itself  is  utterly  insufficient  for  that  purpose.  "  It  may  be 
a  link  in  the  cham,  but  it  cannot  make  a  chain  unless  other 
links  are  added."  "^  So  in  England  it  is  settled  that  the  pre- 
liminary question  of  law  for  the  court  is  not  whether  there 
is  absolutely  no  evidence,  but  whether  there  is  none  that 
ought  reasonably  to  satisfy  the  jury  that  the  fact  sought  to 
be  proved  is  established.  If  there  is  evidence  on  which  the 
jury  can  properly  find  for  the  party  on  whom  the  onus  of 
proof  lies,  it  should  be  submitted  ;  if  not,  it  should  be  with- 
drawn from  the  jury.^ 

Greater  latitude  is  undoubtedly  allowable  in  the  cross- 
examination  of  a  party  who  places  himself  upon  the  stand 
than  in  that  of  other  witnesses.^    The  cross-examination  of 


1  Battles  V.  Laudenslager,  84  Pa.  St.  it.     Courts  have  the  power,  and  must. 

451.  prevent  such  a  system  of  assault,  other- 

-  Howard  Express  Co.  v.   Wile,   64  wise  fraud  would   ever  be  victorious. 

Pa.  St.  206.  It   is   a  subtle   element,  and  is  to  be 

Latitude  of  the  inquiry. — In  Balti-  traced  out,  if  at  all,  by  the  small  in- 
more  &  Ohio  R.R.  Co.  v.  Hoge,  34  Pa.  dices  discoverable  by  the  wayside  where 
St.  221,  Thompson,  J.,  said:  "It  is  a  it  travels;  and  to  enable  courts  and 
great  error,  generally  insisted  on  by  de-  juries  to  detect  it,  they  must  in  most 
fendants,  in  cases  involving  questions  cases  aggregate  many  small  items,  be- 
of  fraud,  that  each  item  of  testimony  is  fore  the  true  features  of  itarediscerni- 
to  be  tested  by  its  own  individual  in-  ble.  Hence  it  is  that  great  latitude  in 
trinsic  force,  without  reference  to  any-  the  investigation  is  a  rule  never  de- 
thing  else  in  the  case  ;  and  if  on  such  a  parted  from  in  such  cases.  This  rule 
test  it  does  not  prove  fraud,  it  must  be  is  elementary,  and  a  citation  of  author- 
excluded.  The  system  of  destroying  ities  to  prove  it  would  not  only  be  use- 
in  detail  forces  designed  for  concen-  less,  but  superfluous. " 
trated  action  does  well,  doubtless,  in  •  Ryder  v.  Wombwell,  L.  R.  4  Exch. 
military  operations  ;  but  a  skillful  gen-  39;  Jewell  v.  Parr,  13  C.  B.  916. 
eral  never  suffers  such  a  disastrous  ^  Rea  v.  Missouri,  17  Wall.  542. 
result,  except  when  he  cannot  prevent 


392 


OTHER    FRAUDS.  §   282 


a  witness  not  a  party  is  usually  confined  within  the  scope 
of  the  direct  examination.^  Then  again  proof  of  collateral 
facts  tending  to  show  a  fraudulent  intention  is  held  to  be 
admissible  whenever  a  fraudulent  intention  is  to  be  estab- 
lished.^ The  fact  that  at  the  time  of  the  sale  suits  were 
pending  against  the  debtor,  or  that  he  was  apprehensive 
suits  would  be  commenced,  and  also  his  general  pecuniary 
condition,  are  matters  which  the  creditor  should  be  per- 
mitted to  show.^ 

The  maxim  "  Omnia  prcBsumuntur  contra  spoliatorem  " 
is  frequently  invoked  by  creditors  in  cases  where  the  debtor 
or  those  acting  in  collusion  with  him  have  spirited  away 
witnesses,  or  altered,  destroyed,  or  suppressed  documents.'* 
And  curiously  enough  the  maxim  '' De  minimus  non  curat 
lex "  has  been  applied  where  the  sum  claimed  to  have 
been  misappropriated  by  the  debtor  was  insignificant  in 
amount.^ 

We  have  already  glanced  at  the  effect  of  inadequacy  of 
consideration,^  and  have  seen  that  it  may  be  so  gross  as  to 
shock  the  conscience  and  furnish  decisive  evidence  of 
fraud.'''  In  an  Oregon  case  this  language  occurs  :  ''The 
fact  that  one  person  has  obtained  the  property  of  another, 
under  a  form  of  purchase,  without  having  paid  any  consid- 
eration therefor,  and  with  a  design  of  acquiring  it  for 
nothing,  is  fraudulent  in  itself."^ 

§  282.  Other  frauds. — It  is  competent,  in  order  to  estab- 
lish the  fraudulent  intent  of  the  debtor,  to  give  proof  of 


'  Rea    V.    Missouri,    17   Wall.    542;  sor,  24  Beav.  679 ;  Armory  v.  Delamirie, 

Johnston  v.  Jones,  i  Black  216;  Teese  i  Stra.  505.     Compare  State  of  Michi- 

V.  Huntingdon,  23  How.  2.  gan  v.  Phoenix  Bank,  33  N.  Y.  9.     But 

^  United  States  v.  36  Barrels  of  High  we  cannot  enter  this  wide  field.    See  18 

Wines,  7  Blatchf.  474 ;  Wood  v.  United  Am.  Law  Rev.  185. 

States,  16  Pet.  342-361.  ^  Crook  v.  Rindskopf,  105  N.  Y.  484. 

^  Harrell   v.    Mitchell,  61    Ala.  278.  "  See  §  232  ;  Archer  v.  Lapp,  12  Ore. 

See  Chap.  XVI.  202. 

*  See  Wardour  v.  Berisford,  i  Vern.  '  See  Pomeroy's  Eq.  Jur.,  §  927. 

452;  Attorney  General  V.  Dean  of  Wind-  *  Archer  v.  Lapp,  12  Ore.  202. 


§  282  '       OTHER   FRAUDS.  393 

Other  fraudulent  sales  effected  about  the  same  time,  and  of 
his  proposals  to  make  other  covinous  alienations,  together 
with  his  statements  and  declarations  showing  such  intent.^ 
Johnson,  J.,  said  :^  "  In  actions  involving  questions  of 
fraud,  the  intent  is  always  a  material  inquiry,  and  for  the 
purpose  of  establishing  that,  other  acts  of  a  similar  charac- 
ter, about  the  same  time,  may  always  be  shown."  ^  This  is 
especially  the  rule  where  there  is  any  relation  or  connection 
between  the  different  transactions,*  or  they  form  any  part 
of  a  connected  scheme  to  defraud.^  When  the  motives  and 
intent  of  the  parties  to  an  act  become  material,  they  may 
be  shown  by  separate  and  independent  acts  and  declara- 
tions accompanying  or  preceding  the  act  in  question.  How 
far  back  such  proof  may  extend  must  depend  upon  the 
nature  and  circumstances  of  each  particular  case,  and  no 
positive  rule  can  be  laid  down.  In  the  case  of  fraudulent 
conveyances  the  proof  will  usually  be  limited  to  similar 
acts  occurring  about  the  same  time.° 

It  has  been  considered,  however,  not  competent  for 
a  party  imputing  fraud  to  another  to  offer  evidence 
to  prove  that  the  other  dealt  fraudulently  at  other  times 
and  in  transactions  wholly  disconnected  with  the  one 
under  consideration.  It  is  believed  that  such  testimony 
would  tend  to  prejudice  the  minds  of  the  jury  by  impeach- 
ing the  general  character  of  the  party  charged  with  the 
fraud,  when  he  had  no  right  to  expect  such  an  attack,  and 
could  not  be  prepared  to  defend  himself,  however  unim- 
peachable his  conduct  might  have  been.'' 


1  Pomeroy  v.   Bailey,  43  N.  H.  125,         'Warren  v.  Williams,  52  Me.  346; 

and  cases  cited;    Blake  v.  White,   13  Flagg  v.  Willinglon,  6  Me.  386. 
N.  H.  267 ;  Pierce  v.  Hoffman,  24  Vt.         •*  Erfort  v.  Consalus,  47  Mo.  212. 
527.     But  see  Staples  v.  Smith,  48  Me.         '  Smith  v.  Schwed,  9  Fed.  Rep.  483  ; 

470;  Huntzinger  v.  Harper,  44  Pa.  St.  Clarke  v.  White,  12  Pet.  193. 
204  ;  McCabe  V.  Brayton,  38  N.  Y.  198  ;         "  Pomeroy  v.  Bailey,  43  N.  H.  125. 
Withrow  V.  Biggerstaff,  87  N.  C.  176.  '  Somes  v.    Skinner,   16  Mass.  360; 

■  Amsden  v.   Manchester,  40   Barb.  Grant  v.  Libby,  71  Me.  430. 
(N.  Y.)  163. 


394 


SUSPICIONS    INSUFFICIENT.  §§  283,   284 


§  283.  Suspicions  insufficient. — Mere  suspicion  of  the  ex- 
istence of  fraud,  as  we  have  said,^  is  not  sufficient  to  estab- 
lish its  existence,  but  it  must  be  clearly  and  satisfactorily- 
shown.  The  evidence  must  convince  the  understanding 
that  the  transaction  was  entered  into  for  a  purpose  pro- 
hibited by  law.*  Tangible  facts  must  be  adduced  from 
which  a  legitimate  inference  of  a  fraudulent  intent  can  be 
drawn.^  Again  circumstances  amounting  to  a  suspicion  of 
fraud  are  not  to  be  deemed  notice  of  it,  and  where  an  infer- 
ence of  notice  is  to  affect  an  innocent  purchaser,  it  must 
appear  that  the  inquiry  suggested  would  have  resulted,  if 
fairly  pursued,  in  the  discovery  of  the  defect  or  fraud.*  The 
transaction  will  not  be  overturned  even  though  the  court 
finds  "that  there  is  ground  of  suspicion."^ 

§  284.    Proving   value. — As  we  have  seen,  the  value  of 
the  assigned  property  is  always  important  in  the  question 


>  Sherman  v.  Hogland,  73  Ind.  472  ; 
Clark  V.  Krause,  2  Mackey  (D.  C.)  565  ; 
Jaeger  v.  Kelley,  52  N.  Y.  274.     See 

§§  5.  6. 

-  Pratt  V.  Pratt,  96  111.  184. 

'  Sherman  v.  Hogland,  73  Ind.  477  ; 
Jaeger  v.  Kelley,  52  N.  Y.  274.  See 
Chap.  XVI. 

■*■  Simms  V.  Morse,  4  Hughes  583. 
See  Ledyard  v.  Butler,  9  Paige  (N.  Y.) 
132. 

*  Parker  v.  Phetteplace,  i  Wall.  685. 
Mr.  Jenks,  the  learned  counsel  for  the 
creditor  in  this  action,  relied  largely 
upon  the  suspicious  circumstances  in 
evidence,  and  urged  that  proof  of  a 
covenant  to  commit  the  fraud  could  not 
be  adduced,  nor  even  proof  of  words. 
Some  of  the  greatest  crimes  which 
power  has  ever  commanded  have  been 
consunftmated  without  a  word  of  direct 
instruction.  The  learned  reporter  in  a 
note  to  this  case  aptly  quotes  from 
King  John,  Act  III..  Scene  III.: 


King  John 

"  Hear  me  without  thine  ears,  and  make  reply 
Without  a  tongue,  using  conceit  alone. 
Without  eyes,  ears,  and  harmful  sound  of  words; 
Then,  in  despite  of  broad-eyed  watchful  day, 
I  would  into  thy  bosom  pour  my  thoughts  ; 
But  ah,  I  will  not : —        .... 

Dost  thou  understand  me  ? 
Thou  art  his  keeper. 

Hubert.  And  I  will  keep  him  so, 

That  he  shall  not  offend  your  majesty." 

Again,  after  the  murder,  Act  IV., 
Scene  II. 

King  John 

"  Hadst  thou  but  shook  thy  head,  or  made  a 

pause, 
When  I  spake  darkly  what  I  purposed; 
Or  turn'd  an  eye  of  doubt  upon  rny  face, 
As  bid  me  tell  my  tale  in  express  words  ; 
Deep  shame   had  struck  me  dumb,  made  me 

break  off. 
And  those  thy  fears  might  have  wrought  fears 

in  me  : 
But  thou  didst  understand  me  by  my  signs. 
And  didst  in  signs  again  parley  with  sin, 
Yea,  without  stop,  didst  let  thy  heart  consent. 
And,  consequently,  thy  rude  hand  to  act 
The  deed  which    both  our  tongues   held   vile 

to  name. — "  ' 


§  285  TESTIMONY.  395 

of  fraud.^  Experts  may  be  called  to  prove  value.  In 
Bristol  Co.  Savings  Bank  v.  Keavy^  the  witness  was  a 
real  estate  broker  and  auctioneer,  and  was  accustomed  to 
sell  and  value  lands  in  various  parts  of  the  city  in  which 
the  property  was  located,  and  had  appraised  land  on  the 
street  where  the  premises  were  situated.  He  was  held  to 
be  plainly  qualified  to  testify  as  to  the  value  of  the  land. 

§  285.  Testimony  must  conform  to  pleadings. — The  com- 
plainant will  only  be  allowed  to  prove  the  truth  of  the  alle- 
gations contained  in  his  bill.  Evidence  relating  to  other 
matters  will  be  excluded  upon  well-established  principles 
of  pleading  which  require  the  complainant  to  state  the  case 
upon  which  he  seeks  relief,  to  the  end  that  the  court  may 
learn  from  the  pleading  itself  whether  the  creditor  is  enti- 
tled to  the  relief  prayed,  and  that  the  defendant  may  be 
advised  as  to  the  matters  against  which  he  is  to  defend.^ 
Facts  admitted  in  the  pleading  cannot  be  contradicted  or 
varied  by  evidence. 

■  Stacy  V.  Deshaw,  7  Hun  (N.  Y.)        •  128  Mass.  303, 
451.    See  §§  23,  41.  2  Parkhurst  v.  McGraw,  24  Miss.  139. 


CHAPTER  XIX. 


DEFENSES. 


286.  As  to  defenses. 

286a.  Another  action  pending. 

287.  Laches. 


28a  [  L^P'" 


of  time. 


290.  Discovery  of  the  fraud. 

291.  Judge  Blatchford's  views. 

292.  Statute  of  limitations. 


§  293.  Limitations  in  equity. 

294.  Insolvency  or   bankruptcy    dis- 

charges. 

295.  Existing  and  subsequent  credit- 

ors. 

296.  Sufficient  property  left — Gift  of 

land. 

297.  What  sheriff  must  show  against 

stranger. 


§  286.  As  to  defenses. — The  principal  defenses  interposed 
in  suits  prosecuted  to  annul  fraudulent  transfers,  as  is  else- 
where shown,  are,  that  the  purchaser  acquired  the  title  or 
property  bona  fide,  without  notice  of,  or  participation  in, 
the  grantor's  fraudulent  intent,  and  that  adequate  consider- 
ation was  paid  or  given  for  it.  The  principles  and  author- 
ities governing  these  branches  of  our  investigation  have 
been  considered  of  sufficient  moment  to  call  for  treatment 
in  separate  chapters,^  and  need  not  be  again  discussed,  but 
there  are  certain  lines  of  defense  common  to  this  class  of 
litigation  which  command  at  least  passing  attention.  It 
may  be  observed  at  the  outset  that  the  fact  that  forms  of 
law  have  been  pursued  is  no  protection  in  a  court  of 
equity,  if  the  result  aimed  at,  and  reached,  is  a  fraud.^ 
The  transaction  must  be  judged  by  its  real  character, 
rather  than  by  the  form  and  color  which  the  parties  have 
seen  fit  to  give   it.^     What  cannot  be  done  directly  can- 


'  See  Chaps.  XV.,  XXIV.  N.  J.  Eq.  190  ;  Fiedler  v.  Darrin,  50  N. 

2  Metropolitan    Bank   v.  Durant,  22  Y.  440,  where  the  rule   is   applied  to 

N.  J.  Eq.  35,  41.  usurious  transactions.   Judgment-cred- 

^  Ouackenbos  v.  Sayer,  62  N.  Y.  346  ;  itors   are   considered    to   be  acting  in 

Vreeland  v.  New  Jersey  Stone  Co.,  29  privity  with  their  debtor  in  attacking 


§§  2S6a,  287^  LACHES.  397 

not  be  done  by  indirection  ;  and  when  fraud  appears  the 
forms  will  be  discarded  and  the  corrupt  act  exposed  and 
punished.^ 

§  286^.  Another  action  pending. — The  general  and  salu- 
tary principle  of  procedure  that  no  person  shall  be  twice 
vexed  for  the  same  cause,  of  course  applies  to  proceedings 
instituted  by  creditors.  Thus  in  a  case  which  arose  in 
Pennsylvania  where  a  creditor's  bill  was  filed  against  di- 
rectors of  an  insolvent  bank  charging  mismanagement  of 
its  affairs,  and  an  assignee  of  the  bank  subsequently  brought 
an  action  at  law  in  the  name  of  the  bank  against  the  direct- 
ors for  the  same  cause,  it  was  held  that  the  pendency  of 
the  bill  was  well  pleaded  in  abatement  in  the  action  at  law.^ 

§  287.  Laches. — We  have  elsewhere  discussed  the  cases 
relating  to  the  sufficiency  of  pleas  excusing  apparent  laches 
in  filing  a  bill  to  annul  a  fraudulent  transfer.^  Endeavoring 
to  avoid  unnecessary  repetition,  let  us  recur  to  the  subject 
of  laches  considered  as  a  defense  or  bar  to  a  suit.  "  Courts 
of  equity  do  not  impute  laches  by  an  iron  rule.  Circum- 
stances are  allowed  to  govern  every  case."^  It  may  be  as- 
serted at  the  outset  that  equity  will  not  be  moved  to  set 
aside  a  fraudulent  transaction  at  the  suit  of  one  who,  after 
he  had  knowledge  of  the  fraud,  or  after  he  was  put  upon 
inquiry  with  the  means  of  knowledge  accessible  to  him, 
has  been  quiescent  during  a  period  longer  than  that  fixed 
by  the  statute  of  limitations.^     A  stale  and  uncertain  de- 


or   defending    any    usurious    contract  '  Buck  v,  Voreis,  89  Ind.  1 17. 

which  he  may  have  made.     Chandler  ^  Warner  v.   Hopkins,   1 1 1    Pa.    St. 

V.  Powers,  24  N.  Y.  Daily  Reg.,  p.  1201  328. 

(Dec.  28,  1883).     See  Merchants'  Exch.  =  See  §§  148,  149. 

Nat.  Bk.  V.  Com.  Warehouse  Co.,  49  *  Waterman  v.  Spragxie  Manuf.  Co., 

N.  Y.  642,  and  note.     It  seems  that  it  55  Conn.  574. 

is   not   a   fraud    upon    creditors  for  a  '  Burke  v.  Smith,  16  Wall.  401.  Corn- 
debtor  or  assignor  to  provide  for  the  pare  Mcader  v.  Norton,  1 1  Wall.  443  ; 
payment    of    a    usurious    debt.      See  Trenton  Banking  Co.  v.  Duncan,  86  N. 
Chapin  v.  Thompson,  89  N.  Y.    271  ;  Y.  221. 
Murray  v.  Judson,  9  N.  Y.  73. 


398  LACHES.  §   287 

mand,  as  for  instance,  a  bill  filed  to  set  aside  an  alleged 
fraudulent  conveyance  nineteen  years  old,  should  not  be  al- 
lowed in  a  court  of  equity.^  In  Eigleberger  v.  Kibler'^it 
appeared  that  the  complainant  had  permitted  the  convey- 
ance in  question  to  stand  for  nearly  ten  years,  during  which 
period  many  valuable  improvements  had  been  made  by  the 
S^rantee,  and  the  creditor  had  also  suffered  other  creditors, 
junior  in  date  to  him,  to  acquire  prior  liens,  and  thus  con- 
sume the  estate  of  the  debtor.  Upon  this  state  of  facts 
the  court  very  properly  decided  that  the  creditor,  having 
by  his  supineness  allowed  the  fund  to  be  taken  away,  could 
not  subsequently  be  permitted  to  make  his  own  laches  a 
ground  of  injury  to  another.  So  it  has  been  considered  an 
important  element  that  the  transactions  out  of  which  the 
suit  arose  commenced  about  thirteen  years  before  any  at- 
tempt was  made  toward  impeachment,  and  no  efforts  at 
concealment  or  secrecy  were  shown. ^  "  After  such  delay," 
said  Chief-Justice  Waite,  "we  are  not  inclined  to  set  aside 
what  has  been  permitted  to  remain  so  long  undisturbed, 
simply  because  of  an  inability  to  explain  with  exact  cer- 
tainty from  what  precise  source  the  money  came,  which 
went  into  the  purchase  of  each  particular  parcel  of  prop- 
erty." * 

Chancellor  Kent  said:^  "There  is  no  principle  better 
established  in  this  court,  nor  one  founded  on  more  solid 
considerations  of  equity  and  public  utility,  than  that  which 
declares,  that  if  one  man,  knowingly,  though  he  does  it 
passively,  by  looking  on,  suffers  another  to  purchase  and 
expend  money  on  land,  under  an  erroneous  opinion  of  title, 
without  making  known  his  claim,  he  shall  not  afterwards  be 
permitted  to  exercise  his  legal  right  against  such  person. 


'  Dominguez  v.  Dominguez,   7   Cal.  *  Aldridge  v.  Muirhead,  loi   U.  S. 

424.  402. 

*i  Hill's  Ch.  (S.  C.)  113;   S.  C.26  ^  Wendell  V.  Van  Rensselaer,  I  Johns. 

Am,  Dec.  192,  Ch.  (N.  Y.)  354. 

'  Aldridge  v.  Muirhead,  1 01  U.  S.  401 . 


§  288  LAPSE    OF   TIME.  399 

It  would  be  an  act  of  fraud  and  injustice,  and  his  conscience 
is  bound  by  this  equitable  estoppel."  The  Court  of  Ap- 
peals of  New  York  could  "  see  no  reason  why  the  same 
principle  should  not  protect  creditors,  who  have  given  credit 
upon  the  faith  of  the  apparent  ownership  of  property  in  pos- 
session of  the  debtor,  against  a  secret  unrecorded  convey- 
ance, fraudulently  concealed  by  the  grantee  ;  as  when,  with 
knowledge  that  the  debtor  is  holding  himself  out  as  owner, 
and  is  gaining  credit  upon  this  ground,  he  keeps  silence, 
giving  no  sign."^  But  in  this  latter  case  the  creditor's  suit 
failed  because  of  his  laches  in  not  examining  the  record, 
and  because  of  a  lack  of  evidence  of  knowledge  of  cir- 
cumstances which  called  upon  the  defendant  to  record  his 
deed. 

§  288.  Lapse  of  time. — The  general  principle  of  equity 
jurisprudence,  that  lapse  of  time,  independent  of  limita- 
tions or  simple  laches,  may  constitute  a  defense  to  a  suit, 
is  ably  considered  by  McCrary,  J.,  in  United  States  v. 
Beebee,*  in  an  action  brought  to  annul  fraudulent  patents. 
The  court  says  in  substance,  that  the  authorities  support 
the  proposition  that  lapse  of  time  may  be  a  good  defense 
in  equity,  independently  of  any  statute  of  limitations,  and 
they  show  that  the  doctrine  rests  not  alone  upon  laches ; 
it  is  often  put  upon  one  or  all  of  the  following  grounds, 
namely  :  First,  that  courts  of  equity  must,  for  the  peace  of 
society,  and  upon  grounds  of  public  policy,  discourage  stale 
demands  by  refusing  to  entertain  them  ;  second,  that  lapse 
of  time  will,  if  long  enough,  be  regarded  as  evidence  against 
the  stale  claim,  equal  to  that  of  credible  witnesses,  and 
which,  being  disregarded,  would  in  a  majority  of  cases  lead 
to  unjust  judgments  ;  third,  that,  after  the  witnesses  who 
had  personal  knowledge  of  the  facts,  have  all  passed  away, 
it  is  impossible  to  ascertain  the  facts,  and  courts  of  equity 


'  Trenton   Banking  Co.  v.  Duncan,        ^  17  Fed.  Rep.  3; 
86  N.  Y.  229. 


400  LAPSE    OF    TIME.  §  289 

will,  on  this  ground,  refuse  to  undertake  such  a  task.  Thus 
Mr.  Justice  Story  says:  "A  defense  peculiar  to  courts  of 
equity  is  founded  upon  the  mere  lapse  of  time,  and  the 
staleness  of  the  claim,  in  cases  where  no  statute  of  limita- 
tions directly  o-overns  the  case.  In  such  cases,  courts  of 
equity  act  sometimes  by  analogy  to  the  law,  and  sometimes 
act  upon  their  own  inherent  doctrine  of  discouraging,  for 
the  peace  of  society,  antiquated  demands,  by  refusing  to 
interfere  when  there  has  been  gross  laches  in  prosecuting 
rights,  or  long  and  unreasonable  acquiescence  in  the  asser- 
tion of  adverse  rights."^  And  in  Maxwell  v.  Kennedy^ 
the  Supreme  Court  of  the  United  States,  in  answer  to  the 
argument  that  there  was  no  statute  of  limitations  applicable 
to  the  case  at  bar,  said  :  "  We  think  the  lapse  of  time,  upon 
the  facts  stated  in  the  bill  and  exhibits,  is,  upon  principles 
of  equity,  a  bar  to  the  relief  prayed,  without  reference  to 
the  direct  bar  of  a  statute  of  limitations." 

§  289.  —  Again,  in  Clarke  v.  Doorman's  Executors,^  the 
same  court  observed  :  "  Every  principle  of  justice  and  fair 
dealing,  of  the  security  of  rights  long  recognized,  of  repose 
of  society,  and  the  intelligent  administration  of  justice,  for- 
bids us  to  enter  upon  an  inquiry  into  that  transaction  forty 
years  after  it  occurred,  when  all  the  parties  interested  have 
lived  and  died  without  complaining  of  it,  upon  the  sugges- 
tion of  a  construction  of  the  will  different  from  that  held 
by  the  parties  concerned,  and  acquiesced  in  by  them  through 
all  this  time."  In  Brown  v.  County  of  Buena  Vista'*  the 
doctrine  is  expressed  in  these  words  :  "  The  lapse  of  time 
carries  with  it  the  memory  and  life  of  witnesses,  the  muni- 
ments of  evidence,  and  other  means  of  proof.  The  rule 
which   gives   it   the   effect   prescribed   is   necessary  to  the 


'  2  Story's  Eq.,  §1520.  107  U.  S.  11  ;  National  Bank  v.  Car- 

-  8  How.  222.  penter,  loi  U.  S.  568  ;  Kirby  v.  Lake 

3 18  Wall.  509.  Shore  &  M.  S.  R.R.  Co.,  120  U.  S.  136  ; 

■*95U.S.i6r.    See  Embry  V.  Palmer,  Phillips  v.  Negley,  117  U.  S.  675. 


§290  DISCOVERY    OF    THE    FRAUD.  4OI 

peace,  repose,  and  welfare  of  society.  A  departure  from  it 
would  open  an  inlet  to  the  evils  intended  to  be  excluded." 
In  Harwood  v.  Railroad  Co.^  the  principle  is  concisely  and 
clearly  stated  thus  :  "  Without  reference  to  any  statute  of 
limitations,  the  courts  have  adopted  the  principle  that  the 
delay  which  will  defeat  a  recovery  must  depend  upon  the 
particular  circumstances  of  each  case."  Lord  Redesdale 
observed  :  "  It  is  said  that  courts  of  equity  are  not  within 
the  statute  of  limitations.  This  is  true  in  one  respect ; 
they  are  not  within  the  words  of  the  statutes,  because  the 
words  apply  to  particular  legal  remedies  ;  but  they  are 
within  the  spirit  and  meaning  of  the  statutes,  and  have 
been  always  so  considered."  ^  Important  discussions  of  this 
general  principle  may  be  found  in  Elmendorf  v.  Taylor^ 
and  Badger  v.  Badger.'*  In  Boone  v.  Chiles^  the  rule  is 
thus  laid  down  :  "A  court  of  chancery  is  said  to  act  on  its 
own  rules  in  regard  to  stale  demands,  and  independent  of 
the  statute.  It  will  refuse  to  give  relief  where  a  party  has 
long  slept  on  his  rights,  and  where  the  possession  of  the 
property  claimed  has  been  held  in  good  faith,  without  dis- 
turbance, and  has  greatly  increased  in  value."  In  Wilson 
V.  Anthony,^  cited  with  approval  by  the  Supreme  Court  of 
the  United  States  in  Sullivan  v.  Portland,  etc.,  R.R.  Co., 
the  doctrine  is  well  stated  thus :  "  The  chancellor  refuses 
to  interfere  after  au  unreasonable  lapse  of  time  from  con- 
siderations of  public  policy,  and  from  the  difhculty  of  doing 
entire  justice  when  the  original  transactions  have  become 
obscured  by  time,  and  the  evidence  may  be  lost. " '' 

§  290.  Discovery  of  the  fraud. — It  is  a  general  rule  that 
where  the  party  injured  by  the  fraud  remains  in  ignorance 


•  17  Wall.  78,  81.  « 19  Ark.  16. 

•  Hovenden  v.  Lord  Annesley,  2  Sch.        '  94  U.  S.  811.     And  see  Hume  v. 
&  Lef.  607.  Beale,  17  Wall.  343;  Hall  v.  Law,  102 

^  10  Wheat.  172.  U.  S.  465  ;  Godden  v.  Kimmeli,  99  U. 

*  2  Wall.  94.  S.  210;  Pusey  v.  Gardner,  21  W.  Va, 

*  10  Pet.  248.  481. 

26 


402  JUDGE  BLATCHFORD's  VIEWS.  §  29I 

of  it,  without  any  fault  or  want  of  care  on  his  part,  the 
statute  does  not  begin  to  run  until  the  fraud  is  discovered 
by,  or  becomes  known  to,  the  party  suing,  or  those  in  privity 
with  him.^  "  To  hold  that  by  concealing  a  fraud,"  says 
Miller,  J.,  ''or  by  committing  a  fraud  in  a  manner  that  it 
concealed  itself  until  such  time  as  the  party  committing  the 
fraud  could  plead  the  statute  of  limitations  to  protect  it,  is 
to  make  the  law  which  was  designed  to  prevent  fraud  the 
means  by  which  it  is  made  successful  and  secure."^  This, 
as  we  have  already  shown,  is  a  rule  of  pleading,^  as  well  as 
a  matter  of  evidence  or  of  defense. 

§  291.  Judge  Blatchford's  views. — This  subject  was  ably 
discussed  in  Tyler  v.  Angevine,*  by  Blatchford,  J.,  while  a 
circuit  judge.  He  said  :  "  In  suits  in  equity,  the  decided 
weight  of  authority  is  in  favor  of  the  proposition,  that, 
where  the  party  injured  by  the  fraud  remains  in  ignorance 
of  it  without  any  fault  or  want  of  diligence  or  care  on  his 
part,  the  bar  of  the  statute  does  not  begin  to  run  until  the 
fraud  is  discovered,  though  there  be  no  special  circum- 
stances or  efforts,  on  the  part  of  the  party  committing  the 
fraud,  to  conceal  it  from  the  knowledge  of  the  other  party.^ 
On  the  question  as  it  arises  in  actions  at  law,  there  is,  in 
this  country,  a  very  decided  conflict  of  authority.  Many 
of  the  courts  hold  that  the  rule  is  sustained  in  courts  of 
equity  only  on  the  ground  that  these  courts  are  not  bound 
by  the  mere  force  of  the  statute,  as  courts  of  common  law 
are,  but  only  as  they  have  adopted  its  principle  as  express- 
ing their  own  rule  of  applying  the  doctrine  of  laches  in  an- 


«  Upton  V.  McLaughlin,   105  U.  S.  *  15  Blatch.  541, 
640;   Bailey  v.  Glover,  21  Wall.  349;  »  Q^jng  ggoth  v.  Warrington,  4  Bro. 
Gifford  V.  Helms,  98  U.  S.  248;  Erick-  P.  C.  163  ;  South  Sea  Co.  v.  Wymond- 
son  V.  Quinn,  47  N.  Y.  413;   Richard-  sell,  3  P.  Wms.  143;  Hovenden  v.  An- 
son V.  Mounce,  19  S.  C.  477.  nesley,  2  Sch,  &  Lef.  634  ;    Steams  v. 

-  Bailey  V.  Glover,  21  Wall.  349,  Jz<r/r«/  Page,  7  How.  819;   Moore  v.  Greene, 

Kirby  V.  Lake  Shore  &  M.  S.  R.R.  Co.,  19  How.  69;    Sherwood  v.  Sutton,   5 

J  20  U.  S.  136.  Mason  143 ;  Snodgrass  v.  Branch  Bank 

'  See  §§  148,  149.  of  Decatur,  25  Ala.  161. 


§   291  JUDGE    BLATCHFORD's    VIEWS.  4O3 

alogous  cases.  They,  therefore,  make  concealed  fraud  an 
exception  on  purely  equitable  principles.^  On  the  other 
hand,  the  English  courts,  and  the  courts  of  Connecticut, 
Massachusetts,  Pennsylvania,  and  others  of  great  respect- 
ability, hold  that  the  doctrine  is  equally  applicable  to  cases 
at  law.*^  As  the  case  before  us  is  a  suit  in  equity,  and  as 
the  bill  contains  a  distinct  allegation  that  the  defendants 
kept  secret  and  concealed  from  the  parties  interested  the 
fraud  which  is  sought  to  be  redressed,  we  might  rest  this 
case  on  what  we  have  said  is  the  undisputed  doctrine  of 
the'  courts  of  equity,  but  for  the  peculiar  language  of  the 
statute  we  are  considering.  We  cannot  say,  in  regard  to 
this  Act  of  limitations,  that  courts  of  equity  are  not  bound 
by  its  terms,  for  its  very  words  are,  that  no  suit  at  law  or 
in  equity  shall  in  any  case  be  maintained  unless  brought 
within  two  years,  etc.  It  is  quite  clear,  that  this  statute 
must  be  held  to  apply  equally,  by  its  own  force,  to  courts 
of  equity  and  to  courts  of  law,  and,  if  there  be  an  exception 
to  the  universality  of  its  language,  it  must  be  one  which 
applies,  under  the  same  state  of  facts,  to  suits  at  law  as  well 

as  to  suits  in  equity And  we  are  also  of  opinion, 

that  this  is  founded  in  a  sound  and  philosophical  view  of 
the  principles  of  the  statute  of  limitations.  They  were  en- 
acted to  prevent  frauds ;  to  prevent  parties  from  asserting: 
rights  after  the  lapse  of  time  had  destroyed  or  impaired  the- 
evidence  which  would  show  that  such  rights  never  existed, 
or  had  been  satisfied,  transferred  or  extinguished,  if  they 
ever  did  exist.  To  hold  that,  by  concealing  a  fraud,  or  by 
committing  a  fraud  in  a  manner  that   it  concealed  itself^ 


'  Citing  Troup  v.  Smith,  20  Johns.  First  Mass.  Turnpike  Co.  v..  Field,  3 

(N.  Y.)  33  ;   Callis  v.  W^addy,  2  Munf.  Mass.    201  ;    Welles   v.  Fishy   3    Pick. 

(Va.)  511;    Miles  v.  Barry,  i   Hill's  (S.  (Mass.)  75  ;  Jones  v.  Cono\vay,.4  Yeates 

C.)  Law  296 ;  York  v.  Bright,  4  Humph.  (Pa.)  109 ;  Rush  v.  Barr,  i  Watts  (Pa.) 

(Tenn.)  312.  no;    Pennock  v.    Freeman,   r  Watts 

^  Citing  Bree  V.  Holbech,  Doug.  655;  (Pa.)   401;    Mitchell  v.  Thompson,   r 

Clark  V.  Hougham,  3  Dowl.  &  R.  322;  McLean  96;    Carr  v.  Hilton,  1  Curtis' 

Granger  v.  George,  5  Barn.  &  C.  149;  C.  C.  230. 


404  LIMITATIONS    IN    EQUITY.  §§   292,   293 

until  such  time  as  the  party  committing  the  fraud  could 
plead  the  statute  of  limitations  to  protect  it,  is  to  make  the 
law  which  was  designed  to  prevent  fraud,  the  means  by 
which  it  is  made  successful  and  secure."  Mr.  Justice  Har- 
lan has  said:^  "It  is  an  established  rule  of  equity,  as  ad- 
ministered in  the  courts  of  the  United  States,  that,  where 
relief  is  asked  on  the  ground  of  actual  fraud,  especially  if 
such  fraud  has  been  concealed,  time  will  not  run  in  favor 
of  the  defendant  until  the  discovery  of  the  fraud,  or  until, 
with  reasonable  diligence,  it  might  have  been  discovered." 

§  292.  Statute  of  limitations. — It  follows  then,  that  as  to 
a  creditor  who  seeks  to  impeach  a  deed  made  by  his  debtor 
conveying  real  estate  to  a  third  person  in  fraud  of  his 
creditors,  the  statute  of  limitations,  when  applicable,  begins 
to  run  from  the  time  the  fraudulent  deed  is  recorded,  or 
from  the  time  the  creditor  has  actual  notice  of  the  convey- 
ance, whichever  first  occurs. '^  It  is  familiar  learning  that 
in  the  absence  of  a  contrary  rule  established  by  statute,  a 
<3efendant  who  desires  to  avail  himself  of  a  statute  of  limita- 
tions as  a  defense,  must  raise  the  question  either  in  plead- 
ing, or  on  the  trial,  or  before  judgment.^  Ten  years  ad- 
verse possession  is  a  good  defense  in  Alabama  to  a  suit  to 
set  aside  a  deed  as  fraudulent."* 

§  293.  Limitations  in  equity. — In  the  consideration  of 
purely  equitable  rights  and  titles  courts  of  equity  act  in 
analogy  to  the  statute  of  limitations,  but  are  not  bound  by 
it.^  As  was  said  in  the  case  of  Hall  v.  Russell  :^  "When 
an  action  upon  a  legal  title  to  land  would  be  barred  by  the 
statute,  courts  of  equity  will  apply  a  like  limitation  to  suits 
founded  upon  equitable  rights  to  the  same  property.     So, 


1  Kirby  v.  Lake  Shore  &  M.  S.  R.R.  Storm  v.  United  States,  94  U.  S.  81  ; 

Co.,  120  U.  S.  136.  Upton  V.  McLoughlin,  105  U.  S.  640. 

-Hughes   V.    Littrell,    75    Mo.   573;        *  Snedecor  v.  Watkins,  71  Ala.  48. 
Rogers  v.  Brown,  61  Mo.  187.  ^  Manning  v.  Hayden,  5  Sawyer  379. 

^  Retzer  v.   Wood,   109  U.  S.  187  ;        ^3  Sawyer,  515. 


§  294  BANKRUPTCY   DISCHARGES.  405 

in  cases  of  implied  or  constructive  trust,  where  it  is  sought, 
for  the  purpose  of  maintaining  the  remedy,  to  force  upon 
the  defendant  the  character  of  trustee,  courts  will  apply 
the  same  limitation  as  provided  for  actions  at  law."^ 

§  294.  Insolvency  or  bankruptcy  discharges. — The  insolvent 
laws  of  a  State  have  no  extra-territorial  force.  They  affect 
only  contracts  between  citizens  of  the  State  in  which  such 
laws  were  enacted.'  As  was  tersely  stated  in  Cook  v. 
Moffat,^  a  certificate  of  discharge  will  not  bar  an  action 
brought  by  a  citizen  of  another  State  on  a  contract  with 
him.  Such  was  the  conclusion  of  the  Supreme  Court  of 
Maine  in  Felch  v.  Bugbee,^  where  this  question  is  most 
carefully  examined ;  and  in  Baldwin  v.  Hale,^  citing  that 
case  with  approbation,  the  court  decided  that  a  discharge 
under  the  insolvent  law  of  one  State  was  not  a  bar  to  an 
action  on  a  note  given  and  payable  in  the  same  State,  the 
party  to  whom  the  note  was  given  being  a  resident  of  a 
different  State,  and  not  having  proved  his  debt  against  the 
defendant's  estate  in  insolvency,  nor  in  any  manner  having 
been  a  party  to  the  proceedings.*^     In  Pratt  v.  Chase  '^  it  is 


'  Citing    Elmendorf   v.   Taylor,    10  v.  Zacharie,  6  Pet.  635,  64S ;  Soule  v. 

Wheat.  176;  Miller  v.  Mclntyre,  6  Pet.  Chase,  39  N.  Y.  342;  Ogden  v.  Saun- 

66;    Beaubien  v.  Beaubicn,  23   How.  ders,  12  Wheat.  213;  Green  v.  Sarmi- 

207,  to  which  may  be  added,  Wisner  v.  ento,  i  Pet.  C.  C.  74 ;  Palmer  v.  Good- 

Barnet,  4  Wash.  C.  C.  638;    Kane  v.  win,  32  Me.  535;   Very  v.  McHenry, 

Bloodgood,  7  Johns.  Ch.  (N.  Y.)  no;  29  Me.  206;  Fiske  v.  Foster,  10  Met. 

Michoud  V.  Girod,  4  How.  560.  (Mass.)  597 ;  Chase  v.  Flagg,  48  Me. 

*  Hills  V.  Carlton,  74  Me.  156  ;  Rhawn  182  ;  Savoye  v.  Marsh,  10  Met.  (Mass.) 
V.  Pearce,  no  111.  350,  594;  Bell  v.  Lamprey,  i  Am.  Insolv. 

^  5  How.  295.  Rep.  10 ;    Scribner  v.  Fisher,  2  Gray 

"  48  Me.  9.  (Mass.)  43  ;  Smith  v.  Smith,  2  Johns. 

'  I  Wall.  223.  (N.  Y.)  235 ;  Gardner  v.  Oliver  Lee's 

*  See  Guernsey  v.  Wood,  130  Mass.  Bank,  11  Barb.  (N.  Y.)  558 ;  Towne  v. 
503 ;  Bedell  v.  Scruton,  54  Vt.  493 ;  Smith,  i  Woodb.  &  M.  n  5  ;  Peck  v. 
Watson  V.  Bourne,  10  Mass.  337 ;  Phelps  Hibbard,  26  Vt.  698  ;  Hawley  v.  Hunt, 
V.  Borland,  30  Hun  (N.  Y.)  362,  366;  27  Iowa  303;  Woodbridge  v.  Allen,  12 
S.  C.  17  Weekly  Dig.  (N.Y.)  556;  Mc-  Met.  (Mass.)  470;  Beer  v.  Hooper,  32 
Millan  V.  McNeill,  4  Wheat.  209  ;  Hale  Miss.  246;  Anderson  v.  Wheeler,  25 
V.  Baldwin,  i  Cliff.  517,  affirmed  as  Conn.  603;  Crow  v.  Coons,  27  Mo.  512. 
Baldwin  v.  Hale,  i  Wall.  223 ;   Boyle  ■■  44  N.  Y.  596. 


406  EXISTING    CREDITORS.  §  295 

said  that  "  as  to  creditors  of  the  insolvent  who  are  not  citi- 
zens of  the  same  State  where  the  discharge  is  granted,  the 
want  of  binding  force  to  defeat  the  obligation  of  a  contract 
is  founded  upon  the  want  of  jurisdiction  over  such  credit- 
ors."^ So,  a  debt  contracted  and  payable  in  a  foreign 
country  is  not  barred  by  a  discharge  under  the  United 
States  Bankrupt  Act,  where  the  creditor  was  not  a  party 
to  and  had  no  personal  notice  of  the  proceedings  in  bank- 
ruptcy.^ The  discharge  of  the  debtor  is  not  necessarily  a 
bar  to  the  creditor's  proceedings  to  reach  property  fraudu- 
lently alienated.  Thus  in  State  v.  Williams^  it  appeared 
that  A.,  having  made  a  fraudulent  conveyance  of  his  real 
estate,  was  afterward  sued  by  B.  During  the  pendency  of 
the  suit,  A.  filed  his  petition  in  bankruptcy,  and  obtained 
his  discharge  before  judgment  was  had  against  him.  After- 
ward B.  filed  a  bill  to  set  aside  the  fraudulent  conveyance, 
and  to  subject  the  property  to  the  payment  of  the  judg- 
ment against  A.  The  court  held  that  the  discharge  in 
bankruptcy  was  no  bar  to  the  proceeding.  The  creditor's 
proceedings  are  quasi  in  rem} 

§  295.  Existing  and  subsequent  creditors. — It  is  said  in 

'  But  compare  Murray  v.Rottenham,  interposed  as  a  defense  to  any  action 

6  Johns.  Ch.  (N.  Y.)  52.  pending  against  the  bankrupt.    Dimock 

-  McDougall  V.  Page,  55  Vt.  187;  S.  v.  Revere  Copper  Co.,  117  U.  S.  559, 

C.  28  Alb.  L.  J.  372.     See  McMillan  v.  and  cases  cited ;  Bradford  v.  Rice,  102 

McNeill,  4  Wheat.  209;  Smith  v.  Bu-  Mass.  472 ;  Hollister  v.  Abbott,  31  N. 

chanan,  i  East  6  ;  Ellis  v.  McHenry,  H.  442.     As  to  attacking  a  discharge, 

L.  R.  6  C.  P.  228.  see  Poillon  v.  Lawrence,  77  N.  Y.  207, 

'  9  Bax.  (Tenn.)  64.  and  cases  cited.     As  to  claims  barred 

"*  A  plea  of  discharge  under  a  foreign  and    not    barred,    see    Hennequin    v. 

insolvency  law  must  set  forth  the  law  Clews,  in  U.S.  676 ;  Strang  v.  Brad- 

under  which  it  was  procured,  and  show  ner,  114  U.  S.  555.     It  may  be  here 

that  it  discharged  the  debt  sued  upon,  noted  that,  in  New  York,  an  impris- 

Baker  v.  Palmer,  i  Am.  Insolv.  Rep.  oned  debtor  is  not  entitled  to  a  dis- 

67.     No  discharge  was  granted  under  charge  upon  making  a  voluntary  as- 

the   United    States   Bankrupt   Act   to  signment   under   the   statute   if    it    is 

corporations.     Ansonia  B.  &  C.  Co.  v.  shown  that  he  made  a  disposition  of 

New  Lamp  Chimney  Co.,  53  N.  Y.  123.  his   property   with    intent    to   defraud 

To  secure  the  benefit  of  a  discharge  creditors.     Matter  of  Brady,  69  N.  Y. 

in  bankruptcy  it  should  be  promptly  215;  S.  C.  i  Am.  Insolv,  Rep.  102. 


§   296  GIFT    OF    LAND.  407 

Collins  V.  Nelson  ^  that  in  a  suit  by  a  creditor  to  set  aside 
a  conveyance  of  real  estate,  alleged  to  have  been  executed 
by  his  debtor  for  the  fraudulent  purpose  of  cheating,  hin- 
dering, and  delaying  the  creditor  in  the  collection  of  the 
debtor's  indebtedness  to  him,  the  answer  of  the  debtor,  to 
the  effect  that,  at  the  time  of  the  commencement  of  the 
suit,  no  part  of  his  indebtedness  to  the  creditor  was  due 
and  unpaid,  will  constitute  a  complete  defense  in  bar  of 
such  suit.  This  statement  is,  it  seems  to  us,  misleading. 
As  is  elsewhere  shown,  subsequent  creditors  may  attack  con- 
veyances made  with  the  intention  to  avoid  future  liabilities,' 
or  to  place  the  risks  of  new  ventures  and  speculations  upon 
the  creditor's  shoulders.^ 

§  296.  Sufficient  property  left — Gift  of  land. — The  general 
rule  applicable  to  conveyances  of  both  real  *  and  personal 
property,^  as  announced  by  the  Supreme  Court  of  Indiana, 
is,  that  a  sale  cannot  be  impeached  as  fraudulent  unless  it  is 
shown  that  the  debtor  had  no  other  property  subject  to 
execution  at  the  time  the  conveyance  was  made.  This,  it 
seems,  is  also  a  rule  of  pleading.'' 

Where  a  father,  in  solvent  circumstances,  made  an  oral 
gift  of  land  to  his  son,  who  entered  into  possession  and 
made  lasting  improvements  on  it,  the  latter  was  considered 
to  have  a  good  title  as  against  creditors  of  the  father.'^ 
"  Taking  possession  under  a  parol  agreement  with  the  con- 
sent of  the  vendor,  accompanied  with  other  acts  which  can- 
not be  recalled  so  as  to  place  the  party  taking  possession 
in  the  same  situation  that  he  previously  occupied,  has  al- 
ways been  held  to  take  such  agreement  out  of  the  opera- 
tion of  the  statute  "  of  frauds.^ 


*  81  Ind.  75.  «  See  §  140. 

'  See  Chap.  VI.,  §§  96-101.  '  Dozier  v.  Matson,  94  Mo.  328. 

'  See  §  100.  '  Sedg.  &  Wait  on  Trial  of  Title  to 

*  Hardy  v.  Mitchell,  67  Ind.  485;  Land  (2d  ed.),  §321^;  Lowry  v.  Tew, 
Noble  V.  Hines,  72  Ind.  12  ;  Spaulding  3  Barb.  Ch.  (N.  Y.)  407  ;  Freeman  v. 
V.  Blythe,  73  Ind.  93.  Freeman,  43  N.  Y.  34. 

*  Rose  V.  Colter,  76  Ind.  592. 


408  WHAT    SHERIFF    MUST    SHOW.  §   297 

§  297.  What  sheriff  must  show  against  stranger. — As  a 
general  rule  process  regular  on  its  face,  and  issued  by  a 
tribunal  or  officer  having  authority  to  issue  it,  is  sufficient 
to  protect  the  officer,  although  it  may  have  been  irregularly 
issued.  But  when  an  officer  attempts  to  overthrow  a  sale 
by  the  debtor  on  the  ground  that  it  was  fraudulent  as  to 
creditors,  he  must  go  back  of  his  process  and  show  the  au- 
thority for  issuing  it.  If  he  acts  under  an  execution  he 
must  show  a  judgment ;  and  if  he  seizes  under  an  attach- 
ment he  must  show  the  attachment  regularly  Issued.^ 


'  Keys    V.    Grannis,    3    Nev.    550 ;  a  creditor,  that   he  can   question  the 

Thomburgh  v.  Hand,  7  Cal.  561.     See  title  of  the  vendee.     The  authorities  to 

§8r.     In   Damon   v.   Bryant,  2   Pick,  this  point  are   Lake  v.  Billers,  i  Ld. 

(Mass.)  413,  Chief- Justice  Parker  said  :  Raym.  733  ;  Bull.  N.  P.  91,  234  ;  Ack- 

"  Where  the  goods  taken  are  claimed  worth  v.  Kempe,  Doug.  41  ;  Savage  v. 

by  a  person  who  was  not  a  party  to  the  Smith,   2  W.   Bl.    1104;    Back.   Abr. 

suit,  and  he  brings  trespass,  and   his  Trespass,  G.  i."     See,  also,  Harget  v. 

title  is  contested  on  the  ground  of  fraud,  Blackshear,  i  Taylor  (N.  C.)  107  ;  High 

under  the  statute  13  Eliz.  c.  5,  a  judg-  v.  Wilson,  2  Johns.  (N.  Y.)  46  ;  Doe  d. 

ment   must  be   shown,  if  the    officer  Bland  v.  Smith,  2  Stark.  199 ;  Weyand 

justifies  under  an  execution,  or  a  debt  v.   Tipton,   5  Serg.   &   R.   (Pa.)  332 ; 

if  under  a  writ  of  attachment,  because  Casanova  v.  Aregno,  3  La.  211. 
it  is  only  by  showing  that  he  acted  for 


CHAPTER  XX. 

HUSBAND    AND    WIFE FRAUDULENT    MARRIAGE 

SETTLEMENTS. 


§  298.  The  marriage  relationship. 

299.  Wife  as  husband's  creditor. 

300.  Transactions  between,  how  re- 

garded. 

301.  Burden  of  proof. 

302.  Mutuality  of  fraudulent  design. 

303.  Husband  as  agent  for  wife. 

304.  Wife's  separate  property. 

305.  Mingling  property   of  husband 

and  wife. 

306.  Marriage  settlements — Amount 

of  settlement. 


§  307.  Post-nuptial  settlements. 

308.  Purchase  by  wife  after  marriage. 

309.  Valid  gifts  —  Subsequent  insol- 

vency. 

310.  Articles  of  separation. 

311.  Statute  of  frauds. 

312.  Policies  of  insurance. 

313.  Competency  of  wife  as  witness. 

314.  Fraudulent  conveyances  in  con- 

templation of  marriage. 

315.  Fraudulent  transfers  as  affecting 

dower. 


§  298.  The  marriage  relationship. — It  would  be  impracti- 
cable to  devote  separate  chapters  to  the  consideration  of 
the  different  frauds  upon  creditors  incident  to  each  of  the 
various  relationships  recognized  by  law  ;  but,  as  the  fair- 
ness and  good  faith  of  transactions  and  conveyances  be- 
tween husband  and  wife  are  so  frequently  challenged  and 
assailed  by  creditors,  the  rules  and  decisions  governing  this 
branch  of  our  subject  must  be  discussed.  As  will  appear, 
husband  and  wife  have  been  made  by  legislation  independ- 
ent legal  personages.^  A  debtor,  when  threatened  with 
insolvency,  naturally  reposes  confidence  in  his  wife ;  the 
relationship  inspires  this  confidence,  and  it  very  often  re- 
sults   that    she    becomes   wrongfully    possessed   of    "the 


'  See  Moore  v.  Page,  iii  U.  S.  118;  Whiton  v.  Snyder,  88  N.  Y.  304. 


4IO  WIFE    yVS    husband's    CREDITOR.  §   299 

creditors'  trust  fund."  The  statutes  conferring  upon  mar- 
ried women  the  povyer  to  hold  and  convey  property  much 
the  same  as  though  they  were  single,  have  unfortunately 
encouraged  husbands  to  confide  to  the  keeping  of  their 
wives  property  which  should  have  been  turned  over  to 
creditors.  Frauds  committed  by  the  husband  and  wife 
upon  one  another,  or  in  contemplation  of,  or  after  entering 
into,  the  relationship,  will  also  call  for  incidental  discussion 
as  we  proceed. 

§  299.  Wife  as  husband's  creditor. — A  wife  can  become  a 
creditor  of  her  husband,  and  he  may  pay  an  honest  debt  to 
her,^  though  as  to  other  creditors  the  claim  may  appear 
stale  and  ancient.  The  debtor  is  not  compelled  by  law  to 
resort  to  the  statute  of  limitations  as  a  defense,  nor  can 
others  interfere  or  insist  upon  it  for  him,  nor  is  the  wife 
estopped  to  receive  payment  of  a  debt  of  this  character.^ 
The  rule  as  it  prevailed  at  common  law  was,  that  a  husband 
could  not  contract  with  his  wife.  Her  money  not  held  to 
her  separate  use,  coming  into  his  possession,  was  regarded 
as  his  property  ;'  and  his  promise  to  repay  such  money  to 
her  could  not  be  enforced  either  at  law  or  in  equity.^  This 
rule,  as  we  have  said,  has  now  been  almost  universally  ab- 
rogated.^ In  many  respects  a  wife  may,  under  the  existing 
policy  of  the  law,  deal  with   her  husband,  as  regards  her 


1  Patton  V.  Conn,  114  Pa.  St.  183.  U.  S.  54;  Jaffrey  v.  McGough,  83  Ala. 

'  Brookville  Nat.  Bank  v.  Kimble,  76  202. 
Ind.  195.  *  Towers  v.  Hagner,  3  Whart.  (Pa.) 

^Joiner  v.   Franklin,   12   B.  J.  Lea  48  ;  Johnston  v.  Johnston,  i  Grant  (Pa.) 

(Tenn.)  422  ;  Whiton  v.  Snyder,  88  N.  468  ;   Kutz's  Appeal,  40  Penn.  St.  90 ; 

Y.  302.  Grabiil  v.  Meyer,  45  Penn.  St.  530  ;  At- 

*  Atlantic  Nat.  Bank  v.  Tavener,  130  Ian  tic  Nat.  Bank  v.  Tavener,  130  Mass. 
Mass.  409  ;  Alexander  v.  Crittenden,  4  409  ;  Babcock  v.  Eckler,  24  N.  Y.  623  ; 
Allen  (Mass.)  342  ;  Turner  v.  Nye,  7  Whiton  v.  Snyder,  88  N.  Y.  299 ;  Sav- 
AUen  (Mass.)  176;  Phillips  v.  Frye,  14  age  v.  O'Neil,  44  N.  Y.  298;  Stead- 
Allen  (Mass.)  36 ;  Degnan  v.  Farr,  126  man  v.  Wilbur,  7  R.  I.  481  ;  /«  re  Blan- 
(Mass.)  297,  299 ;  Kesner  v.  Trigg,  98  din,  i  Lowell  543  ;    Horton  v.  Dewey, 

53  Wis.  410. 


§  300  TRANSACTIONS    BETWEEN.  4 1  I 

separate  estate,  upon  the  same  terms  as  though  the  rela- 
tionship had  no  existence.  Thus  in  a  recent  case  in  Mas- 
sachusetts, in  which  the  opinion  was  rendered  by  Chief- 
Justice  Gray,  now  one  of  the  Justices  of  the  Supreme 
Court  of  the  United  States,  it  was  decided  that  where  a 
wife  loaned  to  her  husband,  upon  a  promise  of  repayment, 
money  constituting  a  part  of  her  separate  estate,  a  convey- 
ance of  land  made  by  him  to  her,  through  a  third  person, 
in  repayment  of  such  loan,  and  free  from  a  fraudulent  de- 
sign, would  be  valid  against  his  creditors.^ 

Manifestly  a  wife's  relinquishment  of  her  dower  right  is 
a  sufficient  consideration  for  a  reasonable  settlement  upon 
her  out  of  the  husband's  property.'* 

§  300,  Transactions  between — How  regarded. — Transac- 
tions between  husband  and  wife,  to  the  prejudice  of  the 
husband's  creditors,  are,  however,  to  be  scanned  closely,^ 
and  their  bona  fides  must  be  clearly  established.*  Lord 
Hardwicke  said  :  "  I  have  always  a  great  compassion  for 
wife  and  children,  yet,  on  the  other  side,  it  is  possible,  if 
creditors  should  not  have  their  debts,  their  wives  and  chil- 
dren may  be  reduced  to  want,"  The  court  observed  in 
Hoxie  V.  Price  :^  "  On  account  of  the  great  facilities  which 
the  marriage  relation  affords  for  the  commission  of  fraud, 
these  transactions  between  husband  and  wife  should  be 
closely  examined  and  scrutinized,  to  see  that  they  are  fair 


'  Atlantic  Nat.  Bank  v.  Tavener,  130  Robinson  v.  Clark,  76  Mc.  494 ;  Frank 

Mass.  407;    followed  and  approved  by  v.  King,  121  III.  254. 

the  United  States    Supreme  Court   in  ^  Booher  v.  Worrill,  57  Ga.  235.     See 

Medsker  v.  Bonebrake,  108  U.  S.  66.  Thompson  v.  Feagin,  60  Ga.  82 ;  Hin- 

SeeTomlinson  V.Matthews,  98  111.  178;  kle  v.  Wilson,  53  Md.  292;   Seitz  v. 

Jewett  V,  Notevvare,  30  Hun  (N.  Y.)  Mitchell.  94  U.  S.  584 ;  Lee  v.  Cole,  44 

194;  French  v.  Motley,  63   Me.  326;  N.  J.  Eq.  328;  Webb  v.  Ingham,  29 

Grabill  v.  Moyer,  45  Pa.  St.  530 ;  Stead-  W.  Va.  389 ;  Curtis  v.  Wortsman,  25 

man  v.  Wilbur,  7  R.I.  481;    Langford  Fed.   Rep.   893;    Bayne    v.   State,   62 

V.  Thurlby,  60  Iowa  105.  Md.  103.     See  §  308. 

■'  Hershy  v.  Latham,  46  Ark.  542.  '  31  Wis.  86.     See  Fisher  v.  Shelver. 

^  Hershy  v.  Latham,  46  Ark.   550;  53  Wis.  501. 


412  BURDEN  OF  PROOF.  §  3OI 

and  honest,  and  not  mere  contrivances  resorted  to  for  the 
purpose  of  placing  the  husband's  property  beyond  the  reach 
of  his  creditors."  In  all  such  cases  the  parties  are  under 
temptation  to  do  themselves  more  than  justice.^  What  is 
secured  to  the  one  is  apt  to  be  shared  by  the  other.  When 
a  creditor  challenges  such  a  contract  for  fraud,  slight  evi- 
dence will  change  the  07ius  and  cast  on  the  conjugal  pair 
the  duty  of  manifesting  the  genuineness  and  good  faith  of 
the  transaction  by  such  evidence  as  will  satisfy  or  ought  to 
satisfy  an  honest  jury.^  There  is,  however,  no  absolute 
legal  presumption  that  a  conveyance  of  land  made  by  a 
debtor  to  his  wife  is  fraudulent  as  against  a  creditor  of  the 
husband  whose  judgment  was  recovered  after  the  convey- 
ance.^ A  wife  may  be  held  as  trustee  ex  malejicio  for  the 
benefit  of  her  husband's  creditors.^ 

§  301.  Burden  of  proof. — It  is  said  by  Mr.  Justice  Taylor 
in  the  case  of  Horton  v.  Dewey,^  that,  "  in  a  contest  be- 
tween the  creditors  of  a  husband  and  the  wife,  if  the  wife 
claims  ownership  of  the  property  by  a  purchase,  the  burden 
of  proof  is  upon  her  to  prove,  by  clear  and  satisfactory  evi- 
dence, such  purchase,  and  that  the  purchase  was  for  a  valu- 


'  In  Post  V.  Stiger,  29  N.  J.  Eq.  556,  wife  over  other  creditors)  must  be  test- 

the  court   say :   "  A  claim  by  a  wife  ed  by  the  same  principles  as  a  convey- 

against  a  husband,  first  put  in  writing  ance  by  a  debtor  to  a  stranger,  when 

when  his  liabilities  begin  to  jeopardize  brought    into   question    as   fraudulent 

his  future,  should  always  be  regarded  against  creditors."     Kaufman  v.  Whit- 

with  watchful  suspicion,  and,  when  at-  ney,  50  Miss.  108.     Citing  Mangum  v. 

tempted  to  be  asserted  against  credit-  Finucane,   38   Miss.    555 ;  Vertner  v. 

ors  upon  the  evidence  of  the  parties  Humphreys,  22  Miss.  130;   Roach  v. 

alone,  uncorroborated  by  other  proof,  Bennett,  24  Miss.  98 ;  Wiley  v.  Gray, 

should  be  rejected  at  once,  unless  their  36  Miss.  510;  Butterfield  v.  Stanton, 

statements  are  so  full  and  convincing  44  Miss.  15.     This  does  not  seem  to 

as  to  make  the  fairness  and  justice  of  us  to  harmonize  with  the  best  author- 

the  claim  manifest."     See  S.  P.  Lee  v.  ity  relating  to  the  subject. 

Cole,  44  N.  J.  Eq.  328.  ^  Hussey  v.Castle,  41  Cal.  239  ;  Grant 

'  It   has    been   said,   however,   that  v.  Ward,  64  Me.  239.     But  see  §  308. 

"  such  dealings  (though  to  be  carefully  *  James  Goold  Co.  v.  Maheady,  38 

scrutinized  on  account  of  the  tempta-  Hun  (N.  Y.)  296. 

tion  to  give  an  unfair  advantage  to  the  ^  53  Wis.  413. 


§  302  FRAUDULENT    DESIGN.  413 

able  consideration,  paid  by  her  out  of  her  separate  estate, 
or  by  some  other  person  for  her."  ^  And  it  is  further  ob- 
served, in  the  course  of  the  opinion,  that :  "  In  all  such 
cases  the  burden  of  proof  showing  the  bona  fides  of  the 
purchase  is  upon  her,  and  she  must  show  by  clear  and  satis- 
factory evidence  that  the  purchase  was  made  in  good  faith, 
with  her  separate  estate,  or  for  a  consideration  moving 
from  some  person  other  than  her  husband.  In  all  such 
cases  the  presumptions  are  in  favor  of  the  creditors,  and 
not  in  favor  of  the  title  of  the  wife."  The  mere  recital  of 
a  valuable  consideration  in  the  instrument  or  bill  of  sale 
has  been  considered  insufficient  to  support  a  verdict  in 
favor  of  the  wife.^  Such  a  recital  is  regarded  as  evidence 
only  between  the  parties  and  their  privies.^ 

It  must  be  remembered  that  the  presumption  of  posses- 
sion of  the  wife's  property  by  the  husband,  and  that  he  is 
therefore  prima  facie  the  owner,  has  been  impaired  by 
modern  innovations  in  the  law.  Since  under  the  present 
rule  the  wife  may  generally  take  by  gift  from  her  husband  ** 
as  well  as  from  others,  and  by  purchase  from  any  one,  her 
separate  and  personal  possession  of  specifig  articles  must 
draw  after  it  the  presumption  of  ownership,  and  there  is 
no  longer  any  reason  for  making  her  case  exceptional,  or 
excluding  her  from  the  operation  of  the  general  rule.^ 

§  302.  Mutuality  of  fraudulent  design.  —  To  render  an 
ante-nuptial  settlement  fraudulent  and  voidable  as  to  cred- 
itors, it  is,  as  we  have  seen,  necessary  that  both    parties 

'  Citing  Stanton  v.  Kirsch,  6  Wis.  Price,  31  Wis.  82  ;  Carpenter  v.  Tatro, 

338  ;  Horneffer  v.  Duress,  13  Wis.  603 ;  36  Wis.  297. 

Weymouth  v.  Chicago  &  N.  W.  Ry.         '  See  Sillyman  v.  King,  36  Iowa  207. 

Co.,  17  Wis.  550;  Duress  V.  Horneffer,  But  compare,  contra.  Stall  v.  Fulton, 

15  Wis.  195;    Beard   v.    Dedolph,   29  30  N.  J.  Law  430 ;  Horton  v.  Dewey, 

Wis.  136;  Stimson  v.  White,  20  Wis.  53  Wis.  410. 

563  ;  Elliott  V.  Bently,  17  Wis.  591  ;  ^  Sillyman  v.  King,  36  Iowa  213  ; 
Putnam  v.  Bickncll,  18  Wis.  333  ;  Han-  Long  v.  DoUarhide,  24  Cal.  218  ;  Kim- 
nan  V.  Oxley,  23  Wis.  519 ;  Fenelon  v.  ball  v.  Fcnner,  12  N.  H.  248.  See§  220. 
Hogoboom,   31    Wis.   172;    Hoxie   v,        ^  Armitage  v.  Mace,  96  N.  Y.  538. 

»  Whiton  V.  Snyder,  88  N.  Y.  304. 


414  HUSBAND  AS  AGENT  FOR  WIFE.  §  303 

should  concur  in  or  have  cognizance  of  the  intended  fraud. ^ 
If  the  settler  alone  intended  a  fraud,  and  the  prospective 
wife  had  no  notice  of  it,  she  cannot  be  affected  by  it.'  Mar- 
riage, as  already  shown,  is  a  consideration  of  the  highest 
value,  which,  from  motives  of  the  soundest  policy,  is  upheld 
with  a  steady  resolution.^ 

Fraud  may  be  imputed  to  the  parties  either  by  direct  co- 
operation in  the  original  design  at  the  time  of  its  concoc- 
tion, or  by  constructive  co-operation  in  carrying  the  design 
into  execution  after  notice  of  it.^  The  question  of  intent 
must  as  in  other  cases  be  submitted  to  the  jury.° 

§  303.  Husband  as  agent  for  wife. — It  is  settled  beyond 
controversy  that  a  husband  may  manage  the  separate  prop- 
erty of  his  wife  without  necessarily  subjecting  it,  or  the 
profits  arising  from  his  management,  to  the  claims  of  his 
creditors.^  The  wife  being  vested  with  the  right  to  hold 
and  acquire  property  free  from  the  control  of  her  husband, 
the  legitimate  inference  seems  to  result,  that  she  can  employ 
whomsoever  she  desires  as  an  agent  to  manage  it."^  To 
deny  her  the  right  to  select  her  husband  for  that  purpose 
would- constitute  a  very  inequitable  limitation  upon  her 
right  of  ownership,  compelling  her  to  resort  to  strangers 
for  advice  and  assistance,  and  would  perhaps  seriously  mar 
the  harmony  of  the  marriage  relation.  In  Tresch  v.  Wirtz  ^ 
the  vice-chancellor  said  :  "  A  man's  creditors  cannot  com- 
pel him  to  work  for  them.  A  debtor  is  not  the  slave  of 
his  creditors.     The  marital  relation  does  not  disqualify  a 


'  See  Chap.  XIV.,  §§  199,  2cx).  Primrose  v.  Browning,  59  Ga.  70.    See 

«  Prewit  V,   Wilson,   103  U.  S.  22  ;  §  254, 

Herring  v.  Wickham,  29  Gratt.  (Va.)  *  Voorhees  v.   Bonesteel,    16   Wall. 

628;    Magniac   v.  Thompson,    7    Pet.  16;    Aldridge  v.  Muirhead,   loi  U.  S. 

392.  399,  per  Chief-Justice  Waite ;  Tresch 

3  Prewit  V.  Wilson,  103   U.  S.   22,  v.  Wirtz,  34  N.  J.  Eq.  129;   Hyde  v. 

See  Chap.  XV.,  §§  210,  212.  Frey,  28  Fed.  Rep.  819. 

^  Magniac  v.  Thompson,  7  Pet.  393,  '  Hyde  v.  Frey,  28  Fed.  Rep.  823 ; 

per  Story,  J.  Woodworth  v.  Sweet,  51  N.  Y.  11. 

*  Monteith    v.    Bax,    4    Neb.    166;  "  34  N.  J.  Eq.  129.     Compare  §  26. 


§§  304>  305        wife's  separate  property.  415 

husband  from  becoming  the  agent  of  his  wife.  All  the 
property  of  a  married  woman  is  now  her  separate  estate  ; 
she  holds  it  as  di/eme  sole,  and  has  a  right  to  embark  it  in 
business.  She  may  lawfully  engage  in  any  kind  of  trade 
or  barter.  If  she  engages  in  business,  and  actually  furnishes 
the  capital,  so  that  the  business  is  in  fact  and  truth  hers, 
she  has  a  right  to  ask  the  aid  of  her  husband,  and  he  may 
give  her  his  labor  and  skill  without  rendering  her  property 
liable  to  seizure  for  his  debts."  ^  In  Merchant  v.  Bunnell,^ 
Davies,  Ch.  J.,  said  :  "This  court  has  frequently  held  that 
there  is  nothing  in  the  marriage  relation  which  forbids  the 
wife  to  employ  her  husband  as  her  agent  in  the  manage- 
ment of  her  estate  and  property,  and  that  such  employment 
does  not  subject  her  property  or  the  profits  arising  from 
such  business,  to  the  claims  of  the  creditors  of  her  hus- 
band."» 

§  304.  Wife's  separate  property. — It  follows  from  the 
cases  cited,  that  a  creditor  cannot  subject  to  the  payment 
of  his  claim  lands  belonging  to  the  debtor's  wife,  the  pur- 
chase-money of  which  constituted  a  part  of  her  separate 
estate ;  *  and  where  the  wife  was  the  owner  of  a  farm  upon 
which  she  resided,  and  which  the  husband  carried  on  in  her 
name,  without  any  agreement  as  to  compensation,  it  was 
held  that  neither  the  products  of  the  farm,  nor  property 
taken  in  exchange  therefor,  could  be  attached  by  creditors 
of  the  husband. '^ 

§  305,  Mingling  property  of  husband  and  wife. — If  a  wife 
permits  her  husband  to  take  title  to  her  lands,  and  to  hold 
himself  out  to  the  world  as  the  owner  of  them,  and  to  con- 


'  Citing  Voorhees  v.   Bonesteel,    16  ^  Davis  v.  Fredericks,  104  U.  S.  618. 

Wall.  31.     See  §218.  Compare  Rutherford  v.  Chapman,  59 

"  3  Keyes  (N.  Y.)  539,  541.  Ga.  177. 

^  Citing  Sherman  v.  Elder,  24  N.  Y.  '  Gage   v.    Dauchy,    34  N.    Y.   293. 

381  ;   Knapp  v.  Smith,  27  N.  Y.  277;  See  Buckley  v.  Wells,  33  N.  Y.   518; 

Buckley  v.  Wells,  33  N,  Y.  518;  Gage  Garrity  v.    Haynes,  53  Barb.  (N.  Y.) 

V.  Dauchy,  34  N.  Y.  293.  599  ;  Bancroft  v.  Curtis,  108  Mass.  47. 


4l6  MINGLING    PROPERTY.  §  305 

tract  debts  upon  the  credit  of  such  ownership,  she  cannot 
afterward,  by  taking  title  to  herself,  withdraw  them  from 
the  reach  of  his  creditors,  and  thus  defeat  their  claims.*  At 
least  the  courts  of  New  Jersey  so  hold.  And  where  a  hus- 
band and  wife  acquire  property  by  their  joint  industry  and 
management,  the  title  being  taken  and  held  in  the  husband's 
name,  a  conveyance  of  the  property  to  the  wife,  without  con- 
sideration, to  the  prejudice  of  existing  creditors  of  the  hus- 
band, will  not  it  seems  be  supported.^ 

It  is  said  by  the  Supreme  Court  of  the  United  States  : 
"  If  the  money  which  a  married  woman  might  have  had 
secured  to  her  own  use  is  allowed  to  go  into  the  business 
of  her  husband,  and  be  mixed  with  his  property,  and  is  ap- 
plied to  the  purchase  of  real  estate  for  his  advantage,  or  for 
the  purpose  of  giving  him  credit  in  his  business,  and  is  thus 
used  for  a  series  of  years,  there  being  no  specific  agreement 
when  the  same  is  purchased  that  such  real  estate  shall  be 
the  property  of  the  wife,  the  same  becomes  the  property  of 
the  husband  for  the  purpose  of  paying  his  debts.  He  can- 
not retain  it  until  bankruptcy  occurs,  and  then  convey  it 
to  his  wife.  Such  conveyance  is  in  fraud  of  the  just  claims 
of  the  creditors  of  the  husband."^  Humes  v.  Scruggs  is 
discussed  and  analyzed  by  Choate,  J.,  in  Van  Kleeck  v. 


1  City  Nat.  Bank  v.  Hamilton,  34  N.  Besson  v.  Eveland,  26  N.  J.  Eq.  471. 

J.  Eq.  162.     "  Having  constantly  con-  See  Sexton  v.  Wheaton,  8  Wheat.  229. 

sented  he  should  hold  himself  out  to  ^  Langford  v.  Thurlby,  60  Iowa  107. 

the  world  as  the  owner  of  this  prop-  '  Humes  v.   Scruggs,   94  U.  S.  27. 

erty,  and  contract  debts  on  the  credit  Citing  Fox  v.  Moyer,   54  N.  Y.    125, 

of  it,  up  to  the  very  hour  of  his  disaster,  131 ;  Savage  v.  Murphy,  34  N.  Y.  508  ; 

it  would  be  against  the  plainest  prin-  Babcock    v.    Eckler,    24   N.   Y.   623 ; 

ciples  of  justice,  and  utterly  subversive  Robinson  v.  Stewart,   10  N.  Y.   190; 

of  everything  like  fair  dealing,  to  per-  Carpenter  v.  Roe,  10  N.  Y.  227  ;  Hinde 

mit  her  to  step  in  now  and  withdraw  v.  Longworth,  ir  Wheat.  199;    which 

from   the  process  of  the  law,  put  in  cases  do  not  all  seem  to  be  entirely  in 

motion  by  his  creditors,  the  very  prop-  point  for  so  broad  a  proposition.     See 

erty  she  had  permitted  him,  year  after  Wake  v.  Griffin,  9  Neb.  47 ;  Odell  v. 

year,  to  represent  to  be  his,  and   the  Flood,  8  Ben.  543 ;  Besson  v.  Eveland, 

apparent  ownership  of  which  had  given  26  N.  J.  Eq.  468  ;    Moore  v.  Page,  1 1 1 

him  his  business  credit  and  standing."  U.  S.  119. 


§  305 


MINGLING    PROPERTY. 


417 


Miller/  and  it  was  very  properly  considered  that  the  lan- 
guage was  not  to  be  deemed  as  asserting  the  doctrine  that 
the  wife  whose  moneys  were  so  received  by  the  husband 
ceased  to  be  his  creditor  for  the  money  so  retained,  or  for- 
feited by  the  use  wiiich  she  had  allowed  the  husband  to 
make  of  the  money  any  of  her  rights  as  creditor  in  case  of 
bankruptcy.^  If  the  money  is  received  by  the  husband  as 
his  wife's,  and  to  be  accounted  for  or  secured  by  him  to 
her,  he  waiving  his  marital  rights  thereto,  she  has  an  equit- 
able right  to  the  fund  sufficient  to  sustain  a  mortgage  sub- 
sequently given  to  secure  it,  and  the  mere  lapse  of  time 
would  not  invalidate  the  security.^ 


'  19  N.  B.  R.  496.  This  language  is 
employed  by  Hopkins,  J.,  In  re  Jones,  6 
Biss.  68,  73,  in  deciding  a  motion  to 
expunge  a  proof  of  debt  in  bankruptcy 
filed  by  a  wife  against  a  husband :  "  She 
allowed  him  [the  husband]  to  collect, 
deposit,  and  use  the  money  when  col- 
lected as  his  own,  and  to  enjoy  the 
credit  and  reputation  that  the  reception 
and  use  of  the  money  necessarily  gave 
him  ;  and  after  parties  have  dealt  with 
him,  supposing  and  believing  he  was 
the  owner  of  such  money,  she  cannot 
be  heard  to  assert  her  right  to  it,  and 
thus  defraud  honest  creditors  who  have 
trusted  him,  relying  upon  the  truth  of 
appearances  of  ownership  which  she 
permitted  him  to  present."  See  Briggs 
V.  Mitchell,  60  Barb.  (N.Y.)  317,  where 
Potter,  P.  J.,  said :  "  A  quiet  acqui- 
escence that  her  husband  should  use 
her  estate  as  his  own,  mingling  it  indis- 
criminately with  his  own,  in  business, 
for  a  period  of  from  twelve  to  nineteen 
years,  without  the  recognition  of  its 
separate  existence  by  even  a  written 
receipt,  memorandum,  or  separate  in- 
vestment, and  without  ever  having  dur- 
ing that  period  accounted  for  interest 
or  principal,  or  even  having  talked  about 
it,  until  the  bona  fide  creditors  were 
27 


about  to  call  for  it,  is  a  kind  of  trust  or 
settlement  that  cannot  be  recognized 
by  any  rule  of  law  or  equity,  to  stand 
against  the  rights  of  antecedent  credit- 
ors." The  argTiments  advanced  in  the 
cases  last  quoted  tend  strongly  toward 
the  repression  of  fraudulent  transfers 
of  assets  by  husband  to  wife.  Since 
the  emancipation  of  married  women 
from  the  bondage  of  the  common  law 
as  regards  their  right  to  hold  prop- 
erty, they  have  become  the  convenient 
alienees  of  dishonest  husbands  who  are 
seeking  to  elude  the  just  claims  of 
creditors.  Nothing  is  more  natural 
than  that  courts  should  rigidly  ex- 
amine, and,  in  proper  cases,  overturn 
transfers  of  this  character.  The  chief 
ground  usually  assigned,  that  the  hus- 
band gains  a  false  credit  by  the  ap- 
parent ownership  and  use  of  the  wife's 
money  and  property  might,  it  seems  to 
us,  be  urged  against  any  creditor  who 
sold  personal  property  to  the  debtor 
upon  credit,  reserving  title,  or  any  bailor 
who  had  entrusted  the  debtor  with  the 
temporary  custody  of  chattels. 

•  See  Grabill  v.Moyer,  45  Penn.St.530. 

^  Syracuse  Chilled  Plow  Co.  v.  Wing, 
85  N.  V.  426 ;  Woodworth  v.  Sweet, 
51  N.  Y.  9. 


41 8  MARRIAGE    SETTLEMENTS.  §  306 

§  306.  Marriage  settlements — Amount  of  settlement, — If 
the  amount  of  property  settled  is  extravagant,  or  grossly 
out  of  proportion  to  the  station  and  circumstances  of  the 
husband,  this  has  been  regarded  as  of  itself  sufficient  notice 
of  fraud. ^  In  an  able  opinion,  in  the  case  of  Davidson  v. 
Graves,^  Justice  Nott  says :  "There  is  no  case  that  I  have 
seen,  where  a  man  has  been  permitted  to  make  an  intended 
wife  a  mere  stock  to  graft  his  property  upon,  in  order  to 
place  it  above  the  reach  of  his  creditors.  A  marriage  set- 
tlement must  be  construed  like  every  other  instrument. 
The  question  may  always  be  raised,  whether  it  was  made 
with  good  faith,  or  intended  as  an  instrument  of  fraud."  ^ 
The  usual  test  is  that  the  settlement  must  be  reasonable 
considering  the  grantor's  circumstances.^  If  it  complies 
with  this  requirement  it  will  be  upheld.  When  a  person 
possesses  a  large  estate,  and,  owing  debts  inconsiderable  in 
amount,  makes  a  voluntary  settlement  of  a  part  of  his  prop- 
erty upon  a  wife  and  child,  retaining  enough  of  his  prop- 
erty himself  to  pay  his  existing  debts  many  times  over,  it 
would  not  be  a  fair  or  reasonable  inference  that  such  a  trans- 
action was  intended  to  hinder  or  defraud  persons  to  whom 
he  happened  to  owe  trifling  debts.^  A  settlement  upon  a 
wife  of  all  a  man's  property  exempt  from  execution,  can- 
not, of  course,  be  upheld,  unless  the  marriage  was  not  only 
'  the  sole  consideration  for  it,  but  the  agreement  was  entered 
^into  by  the  wife  in  ignorance  of  her  husband's  indebtedness, 
and  without  knowledge  of  circumstances  sufficient  to  put 
her  upon  inquiry.^  In  Colombine  v.  Penhall,''  a  celebrated 
English  case,  the  court  said :  "  Where  there  is  evidence  of 
an  intent  to  defeat  and  delay  creditors,  and  to  make  the 


'  Ex  parte  McBurnie,  i  De  G.,  M.  &  ^  See  Phipps  v.  Sedgwick,  95  U.S.  3. 

G.  441  ;   Croft  v.  Arthur,  3   Dessaus.  *  Crawford  v.  Logan,  97  111.  399. 

(S.  C.)  223.  ^  Dygert  v.  Remerschnider,  32  N.  Y. 

^  Riley's  Eq.  (S.  C.)  236 ;  Colombine  637. 

V.  Penhall,  i  Sm.  &  G.  228  ;  Bulmer  v.  "  Gordon  v.  Worthley,  48  Iowa  431. 

Hunter,  L.  R.  8  Eq.  Cas.  46.  ■  i  Sm.  &  G.  256. 


§§  3'^7>   30S  POST-NUPTIAL    SETTLEMENTS.  419 

celebration  of  a  marriage  a  part  of  a  scheme  to  protect 
property  against  tlie  rights  of  creditors,  the  consideration 
of  marriage  cannot  support  such  a  settlement."  ^ 

§  307.  Post-nuptial  settlements. — The  court  decided  in 
French  v.  Holmes,^  that  a  voluntary  gift  by  a  husband  to 
his  wife,  if  he  was  indebted  at  the  time,  was  prima  facie 
fraudulent  as  to  creditors.  Davis,  J.,  states  the  rule  to  be 
that  a  voluntary  post-nuptial  settlement  will  be  upheld  "  if 
it  be  reasonable,  not  disproportionate  to  the  husband's 
means,  taking  into  view  his  debts  and  situation,  and  clear 
of  any  intent,  actual  or  constructive,  to  defraud  creditors."^ 
Mr.  Justice  Field  observes  :  "A  husband  may  settle  a  por- 
tion of  his  property  upon  his  wife,  if  he  does  not  thereby 
impair  the  claims  of  existing  creditors,  and  the  settlement 
is  not  intended  as  a  cover  to  future  schemes  for  fraud."  ^ 
A  settlement  consummated  after  marriage,  in  pursuance  of 
an  agreement  entered  into  before  marriage,  will  be  upheld 
against  creditors,^  and  a  voluntary  conveyance  for  the 
benefit  of  a  wife  and  children  will  not  be  overturned  at  the 
suit  of  a  mortgage  creditor  who  by  reason  of  his  own 
laches  has  lost  his  ample  security.^ 

§  308.  Purchase  after  marriage. — Purchases  of  either  real 
or  personal  property  made  by  the  wife  of  an  insolvent 
debtor  during  coverture  are  justly  regarded  with  suspicion, 
unless  it  clearly  appears  that  the  consideration  was  paid  out 
of  her  separate  estate.'   The  community  of  interest  between 

'  See  Bulmer  v.  Hunter,  L.  R.  8  Eq.  '  Seitz  v.   Mitchell,   94   U.   S.   582  ; 

Cas.  46.  Hinkle  v.  Wilson,  53  Md.  287  ;  Simms 

^  67  Me.  189.  V.    Morse,  4  Hughes  579  ;    Knowlton 

^  Kehr  v.  Smith,  20  Wall.  35  ;  Cook  v.  Mish,  8  Sawyer  627.     In  Hoey  v. 

V.  Holbrook,  146  Mass.  66.     See  Wis-  Pierron,  67   Wis.  262,   269,  the  court 

well  V.  Jarvis,  9  Fed.  Rep.  87.  said  :  "  Ps.?,  to  whether  the  debtor  made 

■*  Moore  V.  Page,  in  U.  S.  118.    See  iuui  executed  that  mortgage  to  his  wife 

Jones  V.  Clifton,  loi  U.  S.  225.  with    the    intent    to    hinder,  delay,  or 

'"  Kinnard  v.  Daniel,  13  B.  Mon.  (Ky.)  defraud  his  creditors,  the  court  charged 

499.  the  jury  that  the  burden  of  proof  was 

"  Stephenson  v.   Donahue,  40   Ohio  upon  the  defendant  to  show  by  clear 

St.  184.  and  satisfactory  evidence  that  it  was 


420  VALID    GIFTS.  §  3O9 

husband  and  wife  requires  that  purchases  of  this  character 
which  are  so  often  made  a  cover  for  a  debtor's  assets,  and  so 
frequently  resorted  to  for  the  purpose  of  withdrawing  his 
property  from  the  reach  of  his  creditors  and  preserving  it  for 
his  own  use,  should  be  closely  scrutinized,  and  in  a  contest 
between  the  creditors  of  the  husband  and  those  of  the  wife, 
there  is,  and  should  be,  a  presumption  against  her  which 
she  must  overcome  by  affirmative  proof.  This  was  the 
rule  of  the  common  law,  and  it  continues,  though  statutes 
have  modified  the  doctrine  which  gave  the  husband  title  to 
the  wife's  personalty.^ 

§  309.  Valid  gifts — Subsequent  insolvency. — It  is  said  in  a 
recent  case  in  Texas  that  a  gift  from  the  husband  to  the 
wife  is  not  necessarily  fraudulent  and  void  as  to  existing 
creditors.  It  might  be  a  badge  of  fraud,  a  circumstance 
to  be  considered  in  determining  whether  the  intent  was 
fraudulent,  if  it  were  shown  that  he  was  then  heavily  in 
debt.  But  it  does  not  follow  that,  because  a  man  may  be 
indebted    to    an    inconsiderable   or   even    a   considerable 


:made  by  him  with  such  intent.  This  been  held,  in  effect,  by  this  court  that 
is  assigned  as  error.  Undoubtedly  the  the  establishment  of  such  '  actual  in- 
'burden  of  proving  that  the  mortgage  debtedness  and  the  amount  thereof,' 
lo  the  wife  was  given  to  secure  an  satisfies  the  requirements  of  the  sec- 
actual  indebtedness  to  her  from  her  tion  and  shifts  the  burden  of  proof  to 
husband  for  moneys  or  property  ad-  such  defendant."  See  §  300. 
Tranced  by  her  from  her  separate  es-  •  Seitz  v.  Mitchell,  94  U.  S.  582,  583 ; 
tate,  or  by  some  other  person  for  her  Gamber  v.  Gamber,  18  Pa.  St.  366; 
use,  was  upon  the  wife ;  but  when  that  Keeney  v.  Good,  21  Pa.  St.  349; 
■was  proved  and,  in  effect,  admitted.  Walker  v.  Reamy,  36  Pa.  St.  410 ; 
it  shifted  such  burden  to  the  defend-  Parvin  v.  Capewell,  45  Pa.  St.  89  ; 
aat.  Semmens  v.  Walters,  55  Wis.  Robinson  v.  Wallace,  39  Pa.  St.  129  ; 
683,  684 ;  Evans  v.  Rugee,  57  Wis.  Aurand  v.  Schaffer,  43  Pa.  St  363  ; 
^24.  Assuming  that  the  defendant  Bradford's  Appeal,  29  Pa.  St.  513; 
made  a  case  within  the  provisions  of  Glann  v.  Younglove,  27  Barb.  (N.  Y.) 
sec.  2319,  R.  S.,  which,  in  such  case,  480;  Edwards  v.  Entwisle,  2  Mackey 
declares  that  'the  burden  shall  be  upon  (D.  C.)  43;  Ryder  v.  Hulse,  24  N.  Y. 
the  plaintiff  to  show  that  such  mort-  372;  Duncan  v.  Roselle,  15  Iowa  501  ; 
gage  was  given  in  good  faith,  and  Cramer  v.  Reford,  17  N.  J.  Eq.  367  ; 
to  secure  an  actual  indebtedness  and  Elliott  v.  Bently,  17  Wis.  591.  See 
the  amount  thereof,'  yet  it  has  often  Edson.  v.  Hayden,  20  Wis.  682. 


§§  310'  311  ARTICLES    OF    SEPARATION.  42 1 

amount  at  the  time,  he  cannot  settle  a  part  of  his  property 
upon  his  wife  or  children,  provided,  as  we  have  seen,  he 
retains  an  ample  amount  of  property  to  liquidate  his  just 
debts.^  Nor  will  the  settlement  be  affected  because  it  may 
turn  out  afterward,  from  accident  or  ill-fortune,  that  his 
property  has  perished  or  been  swept  away.^  The  general 
rule  then  is  that  a  conveyance  by  a  husband,  solvent  at  the 
time,  to  his  wife  and  children,  will  be  supported^  if  he  re- 
tains ample  means  to  pay  his  debts,*  and  the  gift  or  con- 
veyance is  a  reasonable  one.^ 

§  310.  Articles  of  separation. — Where  a  husband  and  wife 
executed  articles  of  separation  by  which  the  husband  bound 
himself  to  pay,  in  trust  for  his  wife,  a  certain  amount  of 
capital,  and  interest  on  it  till  paid,  it  becomes  a  voluntary 
settlement  if  the  parties  become  reconciled  and  again  co- 
habit, even  though  there  be  an  agreement  that  the  settle- 
ment shall  stand.^  A  settlement  has  been  avoided  upon 
this  theory,  where  it  appeared  that  the  amount  of  the  hus- 
band's estate  was  $16,132,  while  the  settlement  was  $7,000, 
leaving  $9,132,  to  meet  debts  confessedly  due  amounting 
to  $9,306. 

§  311.  Statute  of  frauds. —  In  New  York  every  agreement 
or  undertaking  made  upon  consideration  of  marriage,  unless 
reduced  to  writing,  and  subscribed  by  the  parties,  is  void,''' 
and  a  settlement  made  subsequently,  in  pursuance  of  such 
void  agreement,  is  invalid  as  against  creditors.^ 

'  Van  Bibber  v.  Mathis,  52  Tex.  407 ;  wife,  creditors  of  the  copartnership  may 
Morrison  v.  Clark,  55  Tex.  444.  See  pursue  the  property  in  equity.  Ed- 
Emerson  V.  Bemis,  69  111.  537  ;  Hinde's  wards  v.  Entwisle,  2  Mackey  (D.  C.) 
Lessee  v.   Longworth,  11  Wheat.  199.  43  ;    Emerson   v.  Bemis,  69  111.   537  ; 

-  Ibid.;    Cooper,  Chancellor,  in  Per-  Mattingly  v.  Nye,  8  Wall.  370  ;  Kesner 

kins  V.  Perkins,  i  Tenn.  Ch.  543.  v.  Trigg,  98  U.  S.  54. 

*  Brown  v.  Spivey,  53  Ga.  155.  *  Kehr  v.  Smith,  20  Wall.  31. 

"•  Chambers  v.  Sallie,  29  Ark.  407;  '  Dygert  v,  Remerschnider,  32  N.  Y. 

Kent    V.    Riley,    L.    R.    14    Eq.  Gas.  629. 

190.  "  Reade  v.  Livingston,  3  Johns.  Ch. 

'"  When  a  partner  uses  firm  funds  to  (N.  Y.)  481  ;  Borst  v.  Corey,  16  Barb, 

purchase  property  to  settle  upon  his  (N.  Y.)  136,  and  cases  cited. 


422  INSURANCE    POLICIES.  §§  3 1 2,   313 

§  312.  Insurance  policies. — As  we  have  shown,  in  New- 
York,  policies  of  insurance  may  be  placed  upon  a  husband's 
life  for  the  benefit  of  his  wife,  free  from  the  claims  of  cred- 
itors.^ But  where  assignments  of  policies,  taken  out  by  a 
debtor  who  was  insolvent,  are  made  in  trust  for  the  benefit 
of  his  wife,  such  transfers  may  be  annulled  in  favor  of  cred- 
itors.^ The  court,  however,  say  in  the  case  last  cited,  that 
they  "  do  not  mean  to  extend  it  to  policies  effected  with- 
out fraud  directly  and  on  their  face  for  the  benefit  of  the 
wife,  and  payable  to  her  ;  such  policies  are  not  fraudulent 
as  to  creditors."^  In  cases  where  a  debtor  at  his  own 
expense  effects  insurance  on  his  life  as  security  to  a  cred- 
itor, the  representative  of  the  debtor  gets  title  to  the  surplus 
after  the  debt  is  paid.  And  if  the  debtor  in  his  lifetime 
pays  the  debt,  he  is  entitled  to  have  the  policy  delivered  up 
to  him.*  As  already  shown,  a  man  may  devote  a  portion 
of  his  earnings  to  insurance  for  the  benefit  of  his  family.^ 

§  313.  Competency  of  wife  as  witness. — On  a  creditor's  bill 
to  set  aside  a  conveyance  of  land  by  a  husband  to  his  wife, 
she  is  regarded  in  Illinois  as  a  competent  witness  to  prove 
the  consideration  of  the  conveyance  and  its  good  faith.^  It 
seems,  however,  to  be  doubted  whether  a  wife  can  be  com- 


'  See   §  23.     ^tna    Nat.    Bank    v.  land   v.  Isaac,  20  Beav.  389.     As  to 

United  States  Life  Ins.  Co.,  24  Fed.  who  should  sue  to  reach  the  proceeds 

Rep.  770 ;  Charter  Oak  Life  Ins.  Co.  of  a  policy  where  the  debtor  has  made 

V.  Brant,  47  Mo.  419.  a  general  assignment,  see  Lower)'  v. 

'  Appeal  of  Elliott's  Exrs.,  50  Pa.  St.  Clinton,  32  Hun  (N.  Y.)  267. 

75.  ^  Washington  Central  Bank  v.  Hume, 

^  See  Thompson  v.  Cundiff,  11  Bush.  128  U.  S.  195. 

(Ky.)  567.     Compare  Nippes'  Appeal,  ®  Payne  v.  Miller,  103  111.  443.     The 

75  Pa.  St.  478 ;  Gould  v.  Emerson,  99  testimony  of  a  husband  in  favor  of  his 

Mass.  1 54 ;  Durian  v.  Central  Verein,  wife,  on  a  bill  to  subject  land  in  her 

7  Daly  (N.  Y.)  171 ;  Leonard  v.  Clinton,  name   to   the   payment   of  his   debts, 

26  Hun  (N.  Y.)  290;  Estate  of  Henry  when  not  impeached,  must  be  regarded 

Trough,  8  Phila.  (Pa.)  214.  the  same  as  that  of  any.  other  witness 

*  Re  Newland,  7  N.  B.  R.  477.     See  having  a  personal  interest  or  feeling  as 

Lea  V.  Hinton,  5  De  G.,  M.  &  G.  823  ;  to  the  matters  about  which  he  testifies. 

Drysdale   v.   Piggott,    22   Beav.    238  ;  Eads  v.  Thompson,  109  111.  87. 
Courtenay  v.  Wright,  2  Giff.  337 ;  Mor- 


§  3^4  CONTEMPLATION    OF    MARRIAGE.  423 

pelled  to  testify  against  her  husband  when  he  is  a  co- 
defendant  with  her,  if  the  husband  objects  to  her  examina- 
tion.^ While  the  act  of  Congress'^  cut  up  by  the  roots  all 
objections  in  Federal  courts  to  the  competency  of  a  witness 
on  account  of  interest,  it  is  considered  that  the  statute  has 
no  application  to  a  wife,  as  her  testimony  is  excluded  solely 
upon  considerations  of  public  policy  and  not  of  interest.^ 

§  314.  Fraudulent  conveyances  in  contemplation  of  mar- 
riage.— Alienations  of  real  property  by  a  man  about  to  be 
married,  made  without  the  knowledge  of  his  intended 
bride,  and  with  the  intent  and  object  of  depriving  her  of 
the  rights  which  she  would  otherwise  acquire  in  his  prop- 
erty by  the  marriage,  may,  as  we  have  already  seen,**  be 
avoided  by  the  wife  as  fraudulent.^  In  Smith  v.  Smith^ 
the  chancellor  said  :  "  I  am  of  opinion  that  a  voluntary- 
conveyance  by  a  man,  on  the  eve  of  marriage,  unknown  to 
the  intended  wife,  and  made  for  the  purpose  of  defeating 
the  interest  which  she  would  acquire  in  his  estate  by  the  mar- 
riage, is  fraudulent  as  against  her."  The  doctrine  is  not 
limited  to  covinous  conveyances  of  realty,  but  where  per- 
sonal property  is  disposed  of  by  a  colorable  transfer,  the 
husband  retaining  a  secret  interest,  and  the  ultimate  object 
being  to  deprive  the  wife  of  her  share  of  it,  the  convey- 
ance may  be  avoided.'''  The  rule  is  also  applied  and  en- 
forced where  the  conveyance  is  made  by  the  husband  dur- 
ing coverture  with   a   like  intent  and    purpose.     Thus   in 


'  Clark  V.  Krause,  2  Mackey  (D.  C.)  day,  53  N.  Y.  298;  Petty  v.  Petty,  4  B. 

572.  Mon.  (Ky.)  215  ;  Thayer  v.  Thayer,  14 

"U.  S.  Rev.  Stat.,  §858.  Vt.  107;    Brown  v.  Bronson,  35  Mich. 

'  See  Lucas  v.  Brooks,  18  Wall.  453.  415  ;     Smith    v.    Smith,    12    Cal.    217  ; 

*  See  §  70.  Kelly   v.   McGrath,  70  Ala.  75.     See 

^  DeArmond  v.  DeArmond,  10  Ind.  §  70. 

191 ;    Pomeroy  v.   Pomeroy,  54  How.  *  6  N.  J.  Eq.  522. 

Pr.  (N.  Y.)  228 ;    Swaine  v.  Perine,  5  '  See  Littleton  v.  Littleton,  i  Dev.  & 

Johns.  Ch.    (N.  Y.)    482  ;    Youngs  v.  B.  (N.  C.)  Law  327 ;  Davis  v.  Davis,  5 

Carter,    i    Abb.   N.   C.  (N.  Y.)    I36n.,  Mo.  183;  Stone  v.  Stone,  iS  Mo.  389; 

affi'd  10  Hun  (N.  Y.)  194;    Smith  v.  Tucker  v.  Tucker,  29  Mo.  359 ;  McGee 

Smith,  6  N.  J.  Eq.  515  ;  Simar  v.  Cana-  v.  McGee,  Ired.  Law  (N.C.)  105. 


424 


FRAUDULENT    TRANSFERS.  §   3^5 


Gilson  V.  Hutchinson*  it  appeared  that  a  mortgagor  pro- 
cured a  sale  of  the  mortgaged  estate  under  a  power  con- 
tained in  the  mortgage,  with  a  view  to  evade  Habihties  to 
his  wife,  from  whom  he  had  been  separated,  and  to  deprive 
her  of  her  right  of  dower.  The  court  held  that  she  could 
maintain  a  bill  in  equity  for  the  recovery  of  the  property, 
both  as  administratrix  and  in  her  own  right.^  The  rule  has 
been  said  to  embrace  conveyances  made  by  the  intended 
wife  as  well  as  by  the  husband.^  Brickell,  C.  J.,  said:  "We 
confess  an  inability  to  distinguish  the  ante-nuptial  frauds  of 
the  husband  from  the  ante-nuptial  frauds  of  the  wife,  or  to 
perceive  any  sound  reason  for  repudiating  and  avoiding  the 
one,  while  permitting  the  other  to  work  out  its  injustice 
and  injury."* 

§  315.  Fraudulent  transfers  as  affecting  dower. — It  seems 
to  be  quite  clearly  established  ^  that  where  a  deed  made  by 
a  husband  and  wife  is  set  aside  as  a  fraud  upon  creditors, 
the  judgment  will  not  operate  to  bar  the  wife's  right  of 
dower.     The  creditors  cannot  claim  under  the  conveyance 


■  120   Mass.   27.      See   Killinger  v.  provision  for  persons  having  meritorious 

Reidenhauer,   6   S.   &   R.    (Pa.)    531;  claims  on  him,  and  with  that  view,  and 

Brewer  v.  Connell,  11  Humph.  (Tenn.)  not  with  the  view  to  defeat  nor  for  the 

500;  Jenny  v.  Jenny,  24  Vt.  324  ;   Jig-  sake  of  diminishing  the  wife's  dower." 

gifts  V.  Jiggits,  40  Miss.  718.  Compare  Mcintosh  v.  Ladd,  i  Humph. 

*  In  Littleton  v.  Littleton,  i  Dev.  &  (Tenn.)  459;  Miller  v.  Wilson,  15  Ohio 

B.  Law  (N.  C.)  331,  Chief-Justice  Ruffin  108  ;  Stewart  v.  Stewart,  5  Conn.  317  ; 

observed:  "But  ^^«« ^^^ conveyances,  Kelly  v.  McGrath,  70  Ala.  75. 

that  is  to  say,  such  as  are  not  intended  ^  Kelly  v.  McGrath,  70  Ala.  75. 

to  defeat  the  wife,  do  not  seem  to  be  ■*  See  Butler  v.  Butler,  21  Kans.  522 ; 

within  the  meaning  more  than  within  Spencer  v.  Spencer,  3  Jones'  Eq.  (N. 

the  words  of  the  act.     Such  are  sales,  C)  404 ;   Terry  v.  Hopkins,   i   Hill's 

to  make  which  an  unfettered  power  is  Ch.  (S.  C.)  i ;    W^illiams  v.  Carle,  10 

allowed  the  husband.     Such,  too,  ap-  N.  J.  Eq.  543  ;    Freeman  v.  Hartman, 

pear  to  be  bona  fide  gifts,  whereby  the  45  HI.  57;   Belt  v.  Ferguson,  3  Grant 

husband   actually   and    openly  divests  (Pa.)  289  ;  Duncan's  Appeal,  43  Pa.  St. 

himself  of  the  property  and  enjoyment  67  ;  Fletcher  v.  Ashley,  6  Gratt.  (Va.) 

in  his  lifetime,  in  favor  of  children  or  332. 

others,  thereby  making,  according  to  ^  See  "  Effect  of  Fraudulent  Convey- 

his  circumstances  and  the  situation  of  ances  upon  the  Right  of  Dower."     5 

his  family,  a  just  and  reasonable  present  Cent.  L.  J.  459,  and  cases  cited. 


§  315 


FRAUDULENT    TRANSFERS. 


425 


and  against  it,  or  ask  to  have  it  annulled  as  to  creditors 
and  held  valid  as  against  the  wife.^  The  theory  of  the  law 
is  that  the  wife  cannot  release  her  dower  in  her  husband's 
real  estate,  except  by  joining  with  him  in  a  conveyance;^ 
a  release  to  a  stranger  to  the  title  is  ineffectual,'^  and  as  the 
husband's  deed  is  declared  void  at  the  creditor's  instio^ation, 
the  wife's  release  falls  with  it.^ 

Dower  is  not  barred  by  an  assignment  under  the  Bank- 
rupt Act.^ 


'  Robinsop  v.  Bates,  3  Mete,  (Mass.) 
40;  Summers  v,  Babb,  13  111.  483  ;  Du- 
gan  V,  Massey,  6  Bush  (Ky.)  81  ;  Cox 
V.  Wilder,  2  Dillon  47  ;  Woodworth 
V.  Paige,  5  Ohio  St.  70 ;  Richardson  v. 
Wyman,  62  Me.  280  ;  Morton  v.  Noble, 
4  Chic.  L.  N.  157;  Malony  v.  Horan, 
12  Abb.  Pr.  (N.  Y.)  N.  S,  289  ;  S.  C,  49 


N.  Y.  Ill;  Lo\vry  v.  Smith,  9  Hun 
(N.Y.)5i5. 

-  Tompkins  v.  Fonda,  4  Paige  TN. 
Y.)  448 ;  Merchants'  Bank  v.  Thomson, 
55  N.  Y.  12. 

^  Harriman  v.  Gray,  49  Me.  537. 

■*  Monger  v.  Perkins,  62  Wis.  499. 

^  Porter  v.  Lazear,  109  U.  S.  84. 


CHAPTER   XXI. 


FRAUDULENT    GENERAL    ASSIGNMENTS. 


§316.  Voluntary  assignments. 
2i6a.  Property  transferred  by  assign- 
ment. 

317.  Word  "  void  "  construed. 

318.  Delay  and  hindrance. 

319.  Intent  affecting  assignments. 

320.  Fraud  must  relate  to  instrument 

itself. 

321.  pood  faith. 

322.  Void  on  its  face. 

323.  Constructive  frauds  defined  by 

Story. 

324.  Assignments  contravening  stat- 

utes. 

325.  Transfers  to  prevent  sacrifice  of 

property. 

326.  Reservations — Exempt  property. 

327.  Reserving  surplus. 

328.  Releases  exacted  in  assignments. 

329.  Preferring  claims  in  which  as- 

signor is  partner — Rights  of 
survivor. 

330.  Authorizing  trustee  to  continue 

business. 


§331.  Illustrations  and  authorities. 
„,*  [  Delay — Sales  upon  credit. 

334.  Exempting  assignee  from  liabil- 

ity. 

335.  Providing  for  counsel  fees. 

336.  Authority  to  compromise. 

337.  Fraud  of  assignee. 

338.  Ignorance   or   incompetency   of 

assignee  as  badge  of  fraud. 

339.  Transfers     inuring    as    assign- 

ments. 

340.  Assets  exceeding  liabilities. 

341.  Assignments  to  prevent  prefer- 

ence. 

342.  Threatening    to    make   assign- 

ment. 

343.  Construction  of  assignments. 

344.  Explaining     obnoxious     provis- 

ions. 

345.  Assignments  held  void. 

346.  Foreign  assignments. 

346a.  Assignments  by  corporations. 


§  316.  Voluntary  assignments. — To  discuss  the  general 
phases  of  the  law  regulating  voluntary  assignments  made 
hy  debtors  for  the  benefit  of  creditors  would  require  a  vol- 
ume,^ and  is  foreign  to  our  purposes.     When,  however,  as 


'  See  Burrill  on  Assignments,  5th  ed., 
by  George  L.  Sterling,  Esq.  Baker, 
Voorhis  &  Co.,  New  York.  See,  espe- 
cially, Chapter  XXV.  of  that  work. 
See  §§114,  115  of  the  present  treatise 
for  the  rules  as  to  complainants.  As 
to  election  to  accept  benefits  which 
will  estop  creditors  from  attacking  an 


assignment,  see  Wilson  Bros.  W.  & 
T.  Co.  V.  Daggett,  9  Civ.  Pro.  (N. 
Y.)  408,  and  cases  cited  by  McAdam, 
C.  J.;  also  Ryhiner  v.  Ruegger,  19 
Bradw.  (111.)  162.  In  Wright  v. 
Zeigler,  70  Ga.  512,  the  court  said  : 
"  So  a  creditor  cannot  be  permitted 
both  to  assail  and  claim  under  an  as- 


§  3i6 


VOLUNTARY  ASSIGNMENTS. 


427 


is  frequently  the  case,  these  assignments  are  mere  contriv- 
ances called  into  being  to  hinder,  delay,  or  defraud  credit- 
ors, and,  from  their  surroundings,  or  upon  their  face,  con- 
travene the  provisions  of  the  statute  13  Eliz.  c.  5,  creditors 
may  attack  and  annul  them.  The  principles  of  the  law- 
regulating  this  branch  of  the  subject  are  legitimately  within 
the  line  of  our  discussion,  and  they  will,  upon  investigation, 
he  found  to  constitute  a  prolific  source  of  legal  controversy. 
It  seems  remarkable  that  the  instrument  under  which  an 
insolvent  surrenders  up  his  depleted  estate  to  his  creditors 
should  so  frequently  be  itself  tainted  with  the  poison  of  fraud. 
It  may  be  observed  at  the  outset  that  to  constitute  a 
general  assignment  there  must  be  an  element  of  trust, ^  and 
the  conveyance  must  be  voluntary.^  The  property  in  pos- 
session of  the  assignee  is  not  in  custodia  legist  for  the  rea- 


signment ;  one  or  the  other  of  these 
alternatives  he  must  take.  His  elec- 
tion should  be  made  before  he  com- 
mences proceedings,  and  he  should  not 
be  permitted  to  await  the  result  of  his 
suit  in  order  to  make  his  election.  This 
would  be  unfair  to  others  claiming  under 
the  assignment."  Compare  Haydock 
V.  Coope,  53  N.  Y.  68.  As  to  when  a 
bill  of  particulars  will  not  be  ordered 
in  a  suit  to  annul  an  assignment,  see 
Passavant  v.  Cantor,  21  Abb.  N.  C. 
(N.  Y.)  259.     See  §  i62«. 

'  Hine  v.  Bowe,  46  Hun  (N.  Y.)  196  ; 
Brown  v.  Guthrie,  no  N.  Y.  435. 

*  Lewis  V.  Miller,  23  Weekly  Dig. 
(N.  Y.)  495.  In  Brown  v.  Guthrie, 
no  N.  Y.  441,  Finch,  J.,  said:  "The 
view  of  the  case  which  prevailed  with 
the  General  Term  was,  that  the  mort- 
gage, and  the  agreement  which  led  to 
it,  taken  together,  amounted  to  a  gen- 
eral assignment  by  an  insolvent  debtor, 
which  was  void  because  it  reserved  to 
him  a  possible  surplus  at  the  expense 
of  unpaid  creditors,  and  the  right  to 
make   preferences   subsequent   to   the 


conveyance.  If  the  basis  of  the  rea- 
soning be  sound,  the  result  reached 
was  a  proper  inference  ;  but  we  are 
not  satisfied  that  the  mortgage  and 
agreement  amounted  to  a  general  as- 
signment by  the  debtor.  In  form  it 
was  an  absolute  sale  upon  a  chattel 
mortgage  given  for  a  fixed  and  agreed 
consideration  ;  and  while,  nevertheless, 
such  a  sale,  in  spite  of  its  form,  may  be 
proved  to  be  an  assignment  in  trust 
(Britton  v.  Lorenz,  45  N.  Y.  51),  yet 
in  the  present  case  we  are  unable  to 
discover  any  such  proof.  The  material 
and  essential  characteristics  of  a  gen- 
eral assignment  is  the  presence  of  a 
trust.  The  assignee  is  merely  trustee 
and  not  absolute  owner.  He  buys 
nothing  and  pays  nothing,  but  takes 
the  title  for  the  performance  of  trust 
duties.  There  was  no  such  element  in 
the  transaction  between  these  parties. 
The  purchaser  became  absolute  owner 
and  paid  or  secured  the  full  amount  of 
his  mortgage." 

'  See    Lehman    v.    Rosengarten,    23 
Fed.  Rep.  642. 


428  PROPERTY    TRANSFERRED.  §  3l6« 

son  that  the  assignee  is  not  an  officer  of  the  court,  but  is  a 
trustee  bound  to  account  according  to  the  terms  of  the  in- 
strument, and  his  authority  depends  upon  the  validity  of 
the  assignment,  and  is  not  conferred  by  the  court.^ 

The  assignee  derives  all  his  power  from  the  assignment, 
which  is  both  the  guide  and  measure  of  his  duty.  Beyond 
that  or  outside  of  its  terms  he  is  powerless  and  without  au- 
thority. The  control  of  the  court  over  his  actions  is  limited 
in  the  same  way,  and  can  only  be  exercised  to  compel  his 
performance  of  the  stipulated  and  defined  trust,  and  protect 
the  rights  which  flow  from  it.  He  distributes  the  proceeds 
of  the  estate  placed  in  his  care  according  to  the  dictation 
and  under  the  sole  guidance  of  the  assignment,  and  the 
statutory  provisions  merely  regulate  and  guard  his  exercise 
of  an  authority  derived  from  the  will  of  the  assignor.  The 
courts,  therefore,  cannot  direct  him  to  pay  a  debt  of  the 
assignor,  or  give  it  preference  in  violation  of  the  terms  of 
the  assignment  and  the  rights  of  other  creditors  under  it. 
To  hold  the  contrary  would  be  to  put  the  court  in  the  place 
of  the  assignor,  and  assert  a  right  to  modify  the  terms  of 
the  assignment,  after  it  had  taken  effect,  against  the  will  of 
its  maker,  and  to  the  injury  of  those  protected  by  it.  The 
assignee  is  merely  the  representative  of  the  debtor  and 
must  be  governed  by  the  express  terms  of  his  trust."'*  The 
parties  cannot  change  the  terms  of  the  instrument,  or  with- 
draw the  property  from  the  jurisdiction  of  the  court,  or  ab- 
solve the  assignee  from  its  control.  Nor  can  the  assignor 
substitute  a  successor  if  the  assignee  resigns.  The  new 
appointment  must  be  made  by  the  court.^ 

§  316^.  Property  transferred  by  assignment. — The  discus- 
sion has  already  embraced  the  authorities  declaring  what 
assets  creditors  may  reach  by  bill  or  other  proceeding.''    As 

■  Adler  V.  Ecker,  I  McCrary  257.  '^  Chapin    v.   Thompson,    89    N.  Y. 

'  Finch,  J.,  in  Matter  of  Lewis,  81  N.  280. 

Y.  424.     See  Nicholson  v.  Leavitt,  6  ■*  See  Chap.  II. 
N.  Y.  519. 


§2)^^^  PROPERTY    TRANSFERRED.  429 

creditors  are  frequently  forced  to  accept  upon  their  claims 
whatever  the  assignee  is  able  to  realize  from  the  property, 
it  is  important  to  know  what  estate  is  acquired  by  such  a 
transfer.  Every  interest  to  which  the  personal  representa- 
tives of  a  deceased  person  could  succeed  may  pass  by  a 
properly  framed  assignment.^  The  assignee  may  acquire  title 
to  a  claim  for  conversion  ;  ^  may  gain  a  right  to  recover  in 
replevin,'^  and  to  sue  a  common  carrier  for  the  loss  of  goods.* 
He  takes  moneys  deposited  in  bank^  and  lands*'  which  be- 
longed to  the  assignor.  In  Warner  v.  Jaffray  "^  the  court 
said  :  "The  assignment  was  a  mere  voluntary  conveyance, 
and  can  have  no  greater  effect,  so  far  as  passing  title  to  the 
property  assigned,  than  any  other  conveyance,"  In  New 
York  State  by  statute  the  assignee  is  clothed  with  power  to 
assail  fraudulent  alienations  of  property.^  Rights  of  action 
for  personal  torts  which  die  with  the  person  are  not  assign- 
able ;^  as  for  instance  damages  for  an  assault  and  battery  ;  ^^ 
so  the  title  to  trust  property  does  not  pass  ;  "  nor  does  prop- 
erty in  transit ;  ^^  nor  a  wife's  dower  right  ; "  nor  exempt 
property.^^ 

'See  Zabriskie  v.   Smith,  13  N.  Y.  ter  of  Cornell,  iioN.  Y.  360.     The  as- 

322,335.  See  Bishop  on  Insol.  Debtors,  signee  cannot  divest  himself  or  be  di- 

§  143.  vested  of  his  right  to  sue  for  assets  so 

^  Whittaker  v.  Merrill,  30  Barb.  (N.  long  as  the  trust  continues.     Stanford 

Y.)  389;  Richtmeyer  v.  Remsen,  38  N.  v.  Lockwood,  95  N.  Y.  582. 

Y.  206;  Sherman  v.  Elder,  24  N.  Y.  "  People  v.  Tioga  Common  Pleas,  19 

381 ;  McKee  v.  Judd,  12  N.  Y.  622.  Wend.  (N.  Y.)  73  ;  Brooks  v.  Hanford, 

'  Jackson  v.  Losee,  4  Sandf.  Ch.  (N.  15  Abb.  Pr.  (N.  Y.)  342  ;   Hodgman  v, 

Y.)  381.  Western  R.R.  Co.,  7  How.  Pr.  (N.  Y.) 

*  Merrill  v.  Grinnell,  30  N.  Y.  594 ;  492. 

McKee  v.  Judd,  12  N.  Y,  622,  '"  See  Pulver  v.  Harris,  52  N.  Y.  73  ; 

*  Beckwith  v.  Union  Bank,  9  N.  Y.     Bishop  on  Insol.  Debtors,  §  143. 

211.  "  Kip  v.  Bank  of  New  York,  10  Johns. 

«  Matter  of  Marsh,  3  Cow.  (N.Y.)  69.  (N.  Y.)  63. 

'  96  N.  Y.  254.  '•'  Lacker  v.  Rhoadcs,  51  N.  Y.  641, 

'  Southard  v.  Benner.  72  N.  Y.  424 ;  ''  Dimon  v.  Delmonico,  35  Barb.  (N. 

Spring  v.  Short,  90  N.  Y.  538  ;  Ball  v,  Y.)  554. 

Slaften,  98  N.  Y.  622  ;    Fort  Stanwix  '^  Heckman  v.  Messinger,  49  Pa.  St. 

Bank  v.  Leggett,  51  N.Y.  552;  Matter  465  ;    Baldwin    v.  Pcet,  22  Tex.  708  ; 

of  Raymond,  27  Hun  (N.  Y.)  508  ;  Mat-  Smith  v.  Mitchell,  12  Mich.  180. 


430  WORD  "void"  construed.         §§317,318 

The  assignment,  it  may  be  here  recalled,  takes  effect 
from  the  time  of  its  delivery.^ 

^317.  Word  "void"  construed. — The  distinction  between 
void  and  voidable  acts  will  be  defined  and  discussed  at 
length  presently.'  It  will  be  shown  that  the  term  "  void  " 
is  constantly  interpreted  to  mean  nothing  more  than  "  void- 
able," and  that  this  construction  is  especially  true  as  applied 
to  voluntary  assignments.^  Though  the  statute  in  chai^c- 
terizing  assignments  constantly  uses  the  term  "void  as  to 
creditors,"  it  is  obvious  that  "  nothing  more  is  intended 
than  inoperative  or  voidable";*  or,  as  was  observed  by 
Chief-Justice  Shaw,  "such  conveyance  is  not  absolutely 
void,  but  voidable  only  by  creditors."  ^  It  is  the  distin- 
guishing characteristic  of  avoid  act^  that  it  is  incapable 
of  ratification,  but  an  assignment  which  is  fraudulent  upon 
its  face  is  capable  of  confirmation  by  creditors,''  and  is 
good  between  the  parties,  hence  it  is  not  logically  speaking 
void. 

^  318.  Delay  and  hindrance. — Mr.  Burrill  says  :^  "  The  term 

»/&"      delay  has  alf  obvious  reference  to  time,  and  hindrance  to 

r      the  interposition  of  obstacles  in  the  way  of  a  creditor  ;  but, 

to  a  certain  extent,  the  one  involves  and  includes  the  other. 

\^       In  point  of  fact,  and  as  actually  applied  by  the  courts,  they 

are  always  taken  together.     The  following  are  prominent 

instances  in  which  assignments  have  been  declared  void  on 

the  ground  of  hindrance  and  delay  :   Where  the  time  of 

sale,^  or  of  collection  by  the  assignee,^^  or  of  finally  closing 


1  Nicoll  V.   Spowers,    105   N.  Y.  i ;  "  See  White  v.  Banks,  21  Ala.  713. 

Warner  v.  Jaffray,  96  N,  Y.  248.  Compare  Hone  v.  Henriquez,  13  Wend. 

-  See  infra,  Void  and  Voidable  Acts.  (N.  Y.)  242  ;  Geisse  v.  Beall,  3  Wis. 

^  See    Burrill   on  Assignments,    5th  367. 

ed.,  §  319,  p.  502.  "Burrill   on   Assignments,   5th    ed., 

••  Per  Redfield,  Ch.  J.,  in  Merrill  v.  1887,  §  335,  p.  527. 

Englesby,  28  Vt.  155.     See  §  445.  ''  Citing  Hafner  v.  Irwiii,  i   Ired.  (N. 

'  Edwards  v.  Mitchell,  i  Gray  (Mass.)  C.)  Law  490. 

241.  '"  Citing  Storm  v.  Davenport, i  Sandf. 

'  See  infra,  Void  and  Voidable  Acts.  Ch.  (N.  Y.)  135. 


§3^9  INTENT    AFFECTING    ASSIGNMENTS.  43 1 

the  trust/  has  been,  by  the  terms  of  the  assignment,  unrea- 
sonably or  indefinitely  postponed  ;  where  the  assignee  has 
been  expressly  authorized  to  sell  at  retail,  and  on  credit,^ 
or  on  credit  simply  ;^  where  the  assignment  has  been  made 
with  a  view  to  prevent  a  sacrifice  of  the  property;^  where 
the  proceeds  of  the  assigned  property  have  been  directed 
to  be  used  in  defending  all  suits  which  might  be  brought 
by  creditors  to  recover  their  debts  ;  ^  and  where  creditors 
who  should  sue  have  been  expressly  debarred  from  the 
benefit  of  the  assignment, '^  or  postponed  until  all  the  other 
creditors  are  paid.''  All  these  were  instances  of  delaying 
and  hindering  creditors  in  the  prosecution  of  their  reme- 
dies in  the  strict  sense  of  the  terms  used  in  the  statute." 
In  the  famous  Sprague  litigation,  it  is  said  that  a  debtor 
has  no  right  to  postpone  or  put  in  peril  the  claims  of  his 
creditors  without  their  consent,  and  that  a  conveyance 
which  attempts  so  to  do,  or  which  is  executed  for  the  pur- 
pose of  depriving  creditors  of  their  right  to  enforce  their 
just  claims  against  the  property  of  their  debtor,  by  placing 
it  beyond  their  reach  or  control  for  an  unlimited,  indefinite, 
or  uncertain  period,  is  in  conscience,  as  well  as  in  law,  fraud- 
ulent.^ 

§  319,  Intent  affecting  assignments. — "  It  is  clear,  how- 
ever," says  Mr.  Burrill,  "from  the  language  of  the  English 
statute  of  13  Elizabeth,  that  its  provisions  were  directed 
exclusively  against  conveyances  made  with  an  actual  inletii, 
on  the  part  of  debtors,  to  hinder,  delay,  or  defraud  creditors. 


'  Citing    Arthur    v.   Commercial   &  *  Citing  Planck  v.  Schermerhorn,  3 

R.R.  Bank,  17  Miss.  394.  Barb.  Ch.  (N.  Y.)  644;   Mead  v.  Phil- 

'^  Citing    Meacham     v.    Stemes,     9  lips,  i  Sandf.  Ch.  (N.  Y.)  83. 

Paige  (N.  Y.)  398,  406.  *  Citing  Spence  v.  Bagwell,  6  Gratt. 

^  Citing  Barney  v.  Griffin,  2  N.Y.  365;  (Va.)  444 ;    Berry  v.  Riley,  2  Barb.  (N. 

Nicholson  v.  Leavitt,  6  N.  Y.  510.  Y.)  307. 

■*  Citing  Van  Nest  v.  Yoe,    i  Sandf.  ''  Citing  Marsh  v.  Bennett,  5  McLean 

Ch.  (N.Y.)  4;    Vernon  v.  Morton,  8  117. 

Dana  (Ky.)   247.      But   see  Cason    v.  '  De  Wolf  v.  Sprague  Mfg.  Co.,  49 

Murray,  15  Mo.  378.  Conn.  325. 


432 


INTENT    AFFECTING    ASSIGNMENTS. 


§  319 


as  distinguished  from  the  mere  effect  or  operatioji  of  such 
conveyances.  The  expressions  in  the  preamble — 'devised 
and  contrived,'  'to  the  end,  purpose,  and  intent  to  delay,' 
etc.,  leave  no  room  for  doubt  on  this  point.  Hence,  it  has 
sometimes  been  very  expressively  designated  as  the  '  statute 
against  fraudulent  intents  in  alienation.'"^  It  will  be  pres- 
ently shown  that  the  learned  writer  has  stated  the  rule  too 
broadly,  for  a  fraudulent  intent  is  often  imputed  by  the 
law  in  cases  where  the  assignor's  motives  were  undoubtedly 
honest.^  Generally  speaking  the  subject  of  inquiry  in  these 
cases  is  the  intent  of  the  assignor  or  debtor,^  though  there 
is  authority  tending  to  establish  the  rule  that  the  fraudulent 
purpose  sufficient  to  defeat  the  instrument  must  be  partici- 


'  Burrill  on   Assignments,    5th   ed., 

§  332,  p.  524- 

''  See  §§  8,  9,  19,  322. 

^  Wilson  V.  Forsyth,  24  Barb.  (N.  Y.) 
120  ;  Mathews  v.  Poultney,  33  Barb. 
(N.  Y.)  127;  Griffin  v.  Marquardt,  17 
N.  Y.  28  ;  Cuyler  v.  McCartney,  40  N. 
Y.  221  ;  Bennett  v.  Ellison,  23  Minn. 
242 ;  S.  C.  I  Am.  Insol.  Rep.  36 ;  Peck 
V.  Grouse,  46  Barb.  (N.  Y .)  157  ;  Put- 
nam V.  Hubbell,  42  N.  Y,  106  ;  Ruhl  v. 
Phillips,  48  N.Y.  125;  Lesher  V.  Get- 
man,  28  Minn.  93  ;  Jaeger  v.  Kelley,  52 
N.  Y.  274;  Dudley  v.  Danforth,  61  N. 
Y.  626 ;  Main  v.  Lynch,  54  Md.  658 ; 
Bennett  v.  Ellison,  23  Minn.  242 ; 
Forbes  v.  Waller,  25  N.  Y.  439.  "  An 
assignee  for  the  benefit  of  creditors 
stands  in  the  place  of  the  assignor,  and 
is  so  affected  with  his  intent,  that  if  it 
is  unlawful  the  instrument  cannot 
stand."  Tabor  v.  Van  Tassel),  86  N. 
Y.  643.  See  §316.  In  Adler  V.  Ecker, 
I  McCrary  256,  the  court  remark  that 
the  only  mtent  which  will  determine 
the  validity  of  an  assignment  is  that  of 
the  assignor,  at  the  time  it  is  made, 
and  contemporaneous  fraudulent  acts 
are  evidence  of  this  intent.  It  is  then 
observed  of  the  case  under  consider- 


ation, that  it  is  in  proof  that  one  E.  be- 
ing insolvent,  and  owing  debts  amount- 
ing to  more  than  double  the  value  of 
his  assets,  took  from  his  business, 
within  four  weeks  before  his  assign- 
ment, a  sum  equal  to  one-half  of  the 
value  of  the  property  assigned^  and 
with  it  erected  a  building  upon  a  lot 
owned  by  his  wife.  Within  a  short 
time  thereafter  he  joined  with  his  wife 
in  giving  a  mortgage  upon  this  prop- 
erty to  his  father-in-law,  for  three  times 
the  amount  of  any  debt  owing  either 
by  him  or  his  wife,  and  this  mortgage 
and  accompanying  notes  were  sent  to 
the  father-in-law,  without  any  request 
on  his  part,  or  any  information  on  the 
subject,  until  the  papers  were  received. 
The  court  comment  upon  the  fact  that 
there  is  no  evidence  to  counteract  or 
explain  why  the  mortgage  was  given 
for  so  large  a  sum,  after  one-fourth  cf 
the  debtor's  entire  assets  had  been 
taken  from  his  business  in  the  manner 
stated,  and  under  circumstances  calcu- 
lated to  show  an  intent  to  put  a  portion 
of  his  available  means  beyond  the  reach 
of  his  creditors,  and  arrive  at  the  con- 
clusion that  the  assignment  was  fraudu- 
lent and  void. 


§  319  INTENT    AFFECTING    ASSIGNMENTS.  433 

pated  in  by  the  assignee  or  beneficiaries.*  The  testimony 
of  both  the  assignor  and  assignee  upon  the  question  of  in- 
tent is  proper.'^  Recognizing  the  general  rule,  elsewhere 
discussed,  that  a  voluntary  conveyance  or  gift  may  be 
annulled  at  the  instigation  of  creditors,  without  proof  of 
an  absolute  fraudulent  intent  on  the  part  of  the  donee,^  it 
would  seem  to  follow  by  analogy  that  the  cases  which  hold 
that  proof  of  the  fraudulent  intent  of  the  debtor  or  assignor 
is  sufficient,  establish  the  more  logical  and  salutary  rule. 
In  a  case  which  arose  in  New  York  it  was  expressly  de- 
cided that  an  assignment  by  a  debtor,  with  the  intent  to 
hinder  or  defraud  creditors,  may  te  avoided  although  the 
assignees  were  free  from  all  imputation  of  participation  in 
the  fraudulent  design,  and  were  themselves  bo7ia  Jide  crtdxt- 
ors  of  the  assignor."*  In  Loos  v.  Wilkinson,'  Earl,  J.,  said  : 
"An  innocent  assignee  may  not  be  permitted  to  act  under 

a  fraudulent  assignment It  may  be  true  that  in  a 

particular  case  an  honest  assignee  may  ....  undo  all  the 
fraudulent  acts  of  the  assignor  preceding  and  attending  the 
assignment  and  the  preparation  of  the  schedules  under  it. 
Yet,  if  the  assignment  was  made  by  the  assignor  with  the 
fraudulent  intent  condemned  by  the  statute,  the  assignment 
may  be  set  aside  at  the  suit  of  judgment-creditors,  and  all 
powers  of  the  assignee,  however  honest  he  may  be,  taken 
away.     In  assailing  a  voluntary  assignment  for  the  benefit 


'  See  Thomas  v.  Talmadge,  16  Ohio  for  a  valuable  consideration,'  however 

St.  433  ;  Governor  v.  Campbell,  17  Ala.  innocent  he  may  be  of  participation  in 

566 ;    Byrne  v,   Becker,  42   Mo.  264 ;  the   fraud   intended    by   the  assignor. 

Abercrombie  v.  Bradford,  16  Ala.  560;  The     uprightness    of    his    intentions, 

State  V.  Keeler,  49  Mo.  548 ;   Wise  v.  therefore,  will  not  uphold  the  instru- 

Wimer,  23  Mo.  237 ;   Mandel  v.  Peay,  ment,  if  it   would  otherwise,   for  any 

20  Ark.  329.  reason,   be    adjudged    fraudulent    and 

'^  Forbes  v.  Waller,  25  N.Y.  439.   See  void."     Griffin  v.  Marquardt,  17  N.  Y. 

§  205.  30.     See  Loos  v.  Wilkinson,  1 10  N.  Y. 

»  See  §  200.  195  ;  Starin  v.  Kelly.  88  N.  Y.  418,  and 

*  Rathbun  v.  Platner,  18  Barb.  (N.  compare  Sipe  v.  Earman,  26  Gratt.(Va.) 

Y.)  272.    "  An  assigTiee  in  trust  for  the  570. 

benefit  of  creditors  is  not  'a  purchaser  '  no  N.  Y.  209. 
28 


434  FRAUD.  §  320 

of  creditors,  it  is  important  only  to  establish  the  fraudulent 
intent  of  the  assignor/  and  when  that  has  been  established 
the  assignment  may  be  set  aside,  and  creditors  may  then 
pursue  their  remedies  and  procure  satisfaction  of  their 
judgments  as  if  the  assignment  had  not  been  made." 

§  320.  Fraud  must  relate  to  instrument  itself, — Where  it 
is  sought  to  annul  a  fraudulent  transfer,  the  evidence  must 
ascertain  and  establish  the  assignor's  intent  at  the  time  of 
the  execution  of  the  instrument.*  If  the  assignment  was 
valid  in  its  creation,  having  been  honestly  and  properly  ex- 
ecuted and  delivered,  no  subsequent  illegal  acts,  either  of 
omission  or  commission,  can  in  any  manner  invalidate  it.^ 
The  subsequent  acts  should,  however,  be  considered,  as 
they  "  may  reflect  light  back  upon  the  original  intent,"  and 
help  to  characterize  and  discern  it  more  correctly.*  It  may 
be  observed  that  neither  conveyances  without  considera- 
tion, nor  other  frauds  committed  by  a  failing  debtor  prior 
to  a  general  assignment  for  the  benefit  of  his  creditors,  will 
operate  to  make  it  void  as  matter  of  law.  These  are  cir- 
cumstances which  may  be  taken  into  consideration  by  a 
court  and  jury,  if  nearly  contemporaneous,  but  are  not  con- 
clusive of  a  fraudulent  intent.^  To  render  the  assignment 
invalid,  when  good  on  its  face,  the  fact  of  a  fraudulent  in- 
tent in  making  it  must  be  legitimately  found  from  evidence 
that  will  fairly  support  the  finding,  and  it  must  also  be  an 
intent  to  commit  a  fraud  on  creditors  by  making  the  as- 
signment, and  not  by  some  entirely  independent  act  which 
might  and  probably  would  have  been  done  precisely  as 
it  was,  had  no  assignment  been  made  or   contemplated.^ 


'  Citing   Starin  v.  Kelly,  88  N.  Y.  Shirk,  13  Pa.  St.  589;  Owen  v.  Arvis, 

418.  26  N.  J.  Law  22. 

'  Shultz  V.  Hoagland,  85  N.  Y.  467  ;  '  Hardmann  v.  Bowen,  39  N.  Y.  200. 

Mathews  v.  Poultney,  33  Barb.  (N.  Y.)  "  Shultz  v.  Hoagland,  85  N.  Y.  468. 

1 27  ;  Beck  v.  Parker,  65  Pa.  St.  262  ;  *  Livermore  v.  Northrup,   44  N.  Y. 

Bailey  v.  Mills,  27  Tex.  434-438  ;  Cor-  in  ;  Probst  v.  Welden,  46  Ark.  408. 

nish  V.  Dews,  18  Ark.  172;  Klapp  v.  ^  Wilson  v.  Forsyth,  24  Barb.  (N.  Y.) 


§  320  FRAUD.  435 

Proof  of  an  intentional  omission  from  the  schedules  of  as- 
signed property,  of  items  of  valuable  property,  is  sufficient 
to  establish  a  fraudulent  intent.  Referring  to  this  subject, 
Finch,  J.,  said  :  "  The  intentional  omission,  calculated  to 
deceive,  and  to  lull  into  slumber  and  inactivity  the  interest 
and  diligence  of  the  creditor,  would  plainly  argue  a  fraudu- 
lent purpose.  Not  so,  however,  if  shown  to  have  been  un- 
intentional, and  the  result  of  accident  or  oversight.  It 
would  be  hard  to  find  any  schedules  absolutely  perfect,  or 
any  debtor  who  could  inventory  every  item  of  his  property 
with  strict  accuracy.  Room  must  be  allowed  for  honest 
mistake,  and  possibly  even  for  careless  and  thoughtless 
error  ;  but,  where  the  omission  cannot  thus  be  explained  or 
excused,  the  inference  of  a  fraudulent  intent  must  follow."  ^ 
The  motive  to  prevent  creditors  from  gaining  a  preference 
will  of  course  not  avoid  the  assignment.^  It  may  be  here 
remarked  that  if  an  assignment  is  made  in  the  form  and 
manner  provided  by  law,  and  duly  recorded  so  as  to  pass 
all  the  property  of  the  assignor,  it  is  difficult  to  see  how 
the  motive  existing  in  the  assignor's  mind  can  affect  its 
validity.  If  in  morals  the  motive  be  a  bad  one,  yet  in  law 
it  produces  no  forbidden  result.  In  so  far  as  it  hinders  or 
delays  creditors  it  is  a  lawful  hindrance  and  delay,  and  can- 
not be  held  fraudulent.  The  commission  of  a  lawful  act 
is  not  made  unlawful  by  the  fact  that  it  proceeded  from  a 
malicious  motive.^ 


128.     In  Aaronson  v.  Deutsch,  24  Fed.        '  Shultz  v.  Hoagland,  85  N.  Y.  469. 

Rep.  466,  the  court  said:  "The   rule  See  Baird  v.  Mayor,  etc.,  of  N.  Y.,  96 

which  the  defendant  seeks  to  invoke,  N.  Y.  593. 

that  a  deed  valid  in  its  inception  will         ''  See  §341.     Horwitz  v.  Ellinger,  31 

not  be  rendered  invalid  by  any  subse-  Md.  504. 

quent  fraudulent  or  illegal  act  of  the  ^  Wilson  v.  Berg,  88  Pa.  St.  172;  S. 
parties,  has  no  application  where  the  C.  i  Am.  Insolv.  Rep.  169;  Jenkins  v. 
fraudulent  or  illegal  act  is  the  con-  Fowler,  24  Pa.  St.  308 ;  Prowler  v.  Jen- 
summation  of  an  illegal  agreement  kins,  28  Pa.  St.  176;  Glendon  Iron  Co. 
made  contemporaneously  with  the  v.  Uhler,  75  Pa.  St.  467 ;  Smith  v. 
deed."  Johnson,  76  Pa.  St.  191. 


436  VOID    ON    ITS    FACE.  §§  32 1,  322 

§  321.  Good  faith. — The  term  "good  faith,"  if  interpreted 
to  mean  "  sincerity  or  honesty  of  purpose,"  can  scarcely  be 
applied  in  that  sense  to  assignments,  for  these  instruments 
are  often  annulled  from  considerations  of  public  policy  in 
cases  where  nothing  was  more  foreign  to  the  intention  of 
the  debtor  than  a  dishonest  design.  The  usual  presump- 
tion of  good  faith  incident  to  acts  and  transactions  gener- 
ally,J.  appertains  to  an  assignment,  and  it  will  be  upheld 
where  the  language  of  the  instrument  justifies  a  construc- 
tion which  will  support  it."^ 

§  322.  Void  on  its  face. — An  assignment  for  the  benefit  of 
creditors  may  undoubtedly  contain  a  clause  so  plainly  in- 
dicative of  the  fraudulent  intent  pointed  out  by  the  statute, 
or  recognized  by  the  policy  of  the  law,  "  as  to  carry  its 
death-wound  upon  its  face."  An  instance  of  this  might  be 
a  gratuitous  provision  out  of  the  assigned  property  for  the 
insolvent  assignor  or  his  family.^  The  New  York  cases 
clearly  establish  the  rule  that  where  the  assignment  shows 
upon  its  face  that  it  must  necessarily  have  the  effect  of 
hindering  and  defrauding  the  creditors  of  the  assignor,  it  is 
conclusive  evidence  of  a  fraudulent  intent,  and  may  be 
avoided.*  The  actual  motive  and  belief  of  the  debtor  in 
such  cases  is  immaterial.  Where  it  is  apparent  from  the 
face  of  the  instrument  itself  that  it  is  a  conveyance  to  the 
use  of  the  assignor,  it  is  the  duty  of  the  court  trying  the 


^  See  §§  5,  6,  224,  271.  creditors,  it  affords  no  protection  to 

'  Townsend  v.  Steams,  32  N.  Y.  209,  the    assignee    against   a  sheriff",   who 

218;   Brainerd  v.  Dunning,  30  N.  Y.  seeks  to  enforce  by  execution  a  judg- 

211;   Campbell  v.  Woodworth,  24  N.  ment  against  the  debtor." 

Y.  304;  Shultz  V,  Hoagland,  85  N.  Y.  *  Kavanagh    v.  Beckwith,  44  Barb. 

464;  Coyne  v.  Weaver,  84  N.  Y.  386,  (N.  Y.)  192;    Goodrich   v.  Downs,  6 

and  cases  cited.  Hill   (N.  Y.)  438.     See  Wakeman   v. 

3  Nightingale  v.  Harris,  6  R.  I.  329.  Dalley,  44  Barb.  (N.  Y.)  503,  affi'd  51 

Danforth,   J.,   said,   in    McConnell    v.  N.  Y.  27  ;  Griffin  v.  Marquardt,  21  N. 

Sherwood,   84   N.  Y.    526  :    "  Where,  Y.  121 ;  Coleman  v.  Burr,  93  N.  Y.  31  ; 

upon  the  face  of  an  assignment  or  by  s.  P.  Bigelow  v.  Stringer,  40  Mo.  205, 

proof  aliunde,  it  appears  to  have  been  and  cases  cited. 

made  with  intent  to  hinder  or  delay 


§323  CONSTRUCTIVE    FRAUDS.  437 

cause  to  tell  the  jury  as  a  matter  of  law  that  the  convey- 
ance is  fraudulent  as  against  creditors/  In  the  case  of 
Dunham  v.  Waterman, '^  Mr.  Justice  Selden,  referring  to 
the  opinion  of  the  Court  of  Errors  in  Cunningham  v. 
Freeborn,'^  remarked  :  "  It  follows  from  the  reasoning  of 
Mr.  Justice  Nelson,  which  I  regard  as  unanswerable,  that 
wherever  an  assignment  contains  provisions  which  are  cal- 
culated/^r  se  to  hinder,  delay,  or  defraud  creditors,  although 
the  fraud  must  be  passed  upon  as  a  question  of  fact,  it  never- 
theless becomes  the  duty  of  the  court  to  set  aside  the  find- 
ing, if  in  opposition  to  the  plain  inference  to  be  drawn 
from  the  face  of  the  instrument.  A  party  must  in  all  cases 
be  held  to  have  intended  that  which  is  the  necessary  conse- 
quence of  his  acts."  ^ 

§  323.  Constructive  frauds  defined  by  Story. — "  By  con- 
structive frauds,"  observes  Mr.  Justice  Story,  "  are  meant 
such  acts  or  contracts  as,  although  not  originating  in  any 
actual  evil  design  or  contrivance  to  perpetrate  a  positive 
fraud  or  injury  upon  other  persons,  are  yet,  by  their  tend- 
ency to  deceive  or  mislead  other  persons,  or  to  violate 
private  or  public  confidence,  or  to  impair  or  injure  the 
public  interests,  deemed  equally  reprehensible  with  positive 
fraud,  and  therefore  are  prohibited  by  law,  as  within  the 
same  reason  and  mischief  as  acts  and  contracts  done  malo 
animoy^  Again  the  commentator  says:  "Another  class 
of  constructive  frauds  upon  the  rights,  interests,  or  duties 
of  third  persons,  embraces  all  those  agreements  and  other 
acts  of  parties,  which  operate  directly  or  virtually  to  delay, 
defraud,  or  deceive  creditors.  Of  course  we  do  not  here 
speak  of  cases  of  express  and  intentional  fraud  upon  cred- 
itors, but  of  such  as  virtually  and  indirectly  operates  the 


'  Bigelow  V.  Stringer,  40  Mo.  205,  Wakeman  v.  Dalley,  44  Barb.  (N.  Y.) 

'  17  N.  Y.  9,  21.  503  ;    Gere   v.  Murray,  6   Minn.   305. 

=•  II  Wend.  (N.  Y.)  240-251.  See  §§  9,  10. 

*•  See   opinion   of    Ingraham,   J.,   in  *  i  Story's  Eq.  Jur.  §  258. 


438  ASSIGNMENTS    CONTRAVENING    STATUTES.  §  324 

same  mischief,  by  abusing  their  confidence,  misleading  their 
judgment,  or  secretly  undermining  their  interest.  It  is  dif- 
ficult, in  many  cases  of  this  sort,  to  separate  the  ingredients 
which  belong  to  positive  and  intentional  fraud,  from  those 
of  a  mere  constructive  nature,  which  the  law  pronounces 
fraudulent  upon  principles  of  public  policy.  Indeed,  they 
are  often  found  mixed  up  in  the  same  transaction."  ^ 

§  324.  Assignments  contravening  statutes. — We  may  state 
as  a  general  rule  that  an  assignment  which  contravenes  the 
provisions  of  a  statute,  or  vests  the  assignee  with  a  discre- 
tion contrary  to  the  terms  of  an  express  provision  of  law, 
and  authorizes  him  to  effect  sales  of  the  assigned  property 
in  a  manner  not  permitted  by  the  statute,  will  be  declared 
void.^  This  principle  is  learnedly  discussed  in  a  case  re- 
cently decided  in  the  Supreme  Court  of  the  United  States.^ 
The  assignment  provided  as  follows  :  "  The  party  of  the 
second  part  [the  assignee]  shall  take  possession  of  all  and 
singular  the  property  and  effects  hereby  assigned,  and  sell 
and  dispose  of  the  same,  either  at  public  or  private  sale,  to 
such  person  or  persons,  for  such  prices  and  on  such  terms 
and  conditions,  either  for  cash  or  upon  credit,  as  in  his 
judgment  may  appear  best  and  most  for  the  interest  of  the 
parties  concerned,  and  convert  the  same  into  money."  It 
will  be  observed  that  the  assignment  did  not  by  its  terms 
prevent  the  assignee  in  the  administration  of  his  trust  from 
following  the  directions  of  the  statute  in  all  particulars. 
Counsel  contended  that  the  assignment  was  valid  (i)  be- 
cause the  discretion  given  the  assignee  by  the  assignment 
left  him  at  liberty  to  follow  the  law,  and  (2)  because  even 
if  the  assignment  required  him  to  administer  the  trust  in  a 


'  I  Story's  Eq.  Jur.  §  349.  &  Aid.  691  ;    Miller   v.  Post,  i  Allen 

^  Jaffray  v.  McGehee,  107  U.  S.  361-  (Mass.)  434;  Parton  v.  Hervey,  i  Gray 

365;    Collier   v.   Davis,  47  Ark.  369.  (Mass.)  119;  Hathaway  v.  Moran,  44 

See  Peck  v.  Burr,  10  N.  Y.  294;  Mac-  Me.  67. 

gregor  v.  Dover  &  Deal  R.R.  Co.,  18         ^  j^ffray    v.    McCehee,    107    U.    S, 

Q.  B.  618  ;  Jackson  v.  Davison,  4  Bam,  361. 


§324  ASSIGNMENTS    CONTRAVENING   STATUTES.  439 

manner  different  from  that  prescribed  by  the  law,  only  such 
directions  as  conflicted  with  the  law  would  be  void,  and  the 
assignment  itself  would  remain  valid.  The  Supreme  Court 
of  the  United  States,  however,  did  not  adopt  this  view,  but 
followed  the  construction  given  to  the  assignment  law  of 
Arkansas  by  the  Supreme  Court  of  that  State  in  Raleigh 
V.  Griffith,^  to  the  effect  that  such  an  assignment  was  void 
as  to  creditors,  and  held  that  the  construction  put  upon  the 
law  by  the  highest  court  of  the  State  where  the  assignment 
was  made,  was  binding  on  the  courts  of  the  United  States.' 
The  substance  of  the  opinion  in  Raleigh  v.  Griffith,'^  is  that 
the  statute  is  disregarded  in  the  deed  of  assignment,  the 
assignee  being  authorized  to  sell  at  private  or  public  sale, 
and  for  cash  or  on  credit.  The  assignee  was  vested  with  a 
discretion  to  prolong  the  closing  of  the  trust  for  an  indefi- 
nite period.  The  legislature  having  deemed  it  expedient, 
as  a  matter  of  public  policy,  to  require  an  assignee  for  the 
benefit  of  creditors  to  sell  the  property  within  a  specified 
time  and  prescribed  manner,  the  dissenting  creditors  are 
not  barred  by  a  deed  made  in  direct  contravention  of  a 
plain  provision  of  the  statute.  The  provisions  of  the  stat- 
ute are  mandatory  and  not  directory,*  and  it  follows,  in  the 
words  of  Mr.  Justice  Woods,  that  an  assignment  "  which 
vests  the  assignee  with  a  discretion  contrary  to  the  man- 
dates of  the  statute,  and  in  effect  authorizes  him  to  sell  the 
property  conveyed  thereby  in  a  method  not  permitted  by 
the  statute,  must  be  void,  for  contracts  and  conveyances  in 
contravention  of  the  terms  or  policy  of  a  statute  will  not 
be  sanctioned."^ 


'  37  Ark.  153.  Citing  Peck  v.   Burr,  10  N.  Y.   294; 

'^  Brashear  v.  West,  7  Pet.  608  ;  Sum-  Macgregor  v.  Dover  &  Deal  R.R.  Co., 

ner  v.  Hicks,  2  Black  532;  Leffingwell  18  Q.  B.  618;   Jackson  v.  Davison,  4 

V.  Warren,  2  Black  599.     See  §71.  Barn.  &  Aid.  695;    Miller  v.  Post,  i 

^  37  Ark.  153.  Allen  (Mass.)  434;  Parton  v.  Hervey, 

■'See  French  v.  Edwards,  13  Wall,  i  Gray  (Mass.)  119;  Hathaway  v.  Mo- 

506.  ran,  44  Me.  67. 

'  Jaffray  v.  McGehee,  107  U.  S.  365. 


440  SACRIFICE    OF    PROPERTY.  §§  325,   326 

§  325.  Transfer  to  prevent  sacrifice  of  property. — In  Ger- 
man Insurance  Bank  v.  Nunes^  the  material  part  of  the 
deed  read  :  "  That  whereas,  the  said  first  party  is  indebted 
to  sundry  persons  in  various  sums,  amounting  in  the  aggre- 
gate to  about  thirty-eight  thousand  dollars,  and  is  the  owner 
of  a  large  amount  of  assets,  estimated  to  be  worth  more 
than  fifty  thousand  dollars ;  and  whereas,  the  said  first  party 
is  unable  to  convert  his  said  assets  into  money  fast  enough 
to  discharge  his  said  indebtedness  as  it  matures,  and  is  de- 
sirous that  the  same  shall  not  be  sacrificed,  but  so  managed 
and  disposed  of  that  they  will  realize  their  fair  value  at  as 
little  cost  as  possible,  and  satisfy  his  creditors  in  full,  and 
leave  a  residue  for  him,  etc."  The  court  said  that  it  was 
the  intention  which  controlled,  and  that  this  could  not  be 
better  determined  than  from  the  language  of  the  convey- 
ance. The  deed  declared  that  it  was  made  "  to  prevent  a 
sacrifice"  of  the  property  and  "to  leave  a  residue"  to  the 
debtor.  It  also  avowed  that  the  assets  were  largely  in  ex- 
cess of  the  liabilities,  and  it  would  seem  to  follow  that  the 
primary  object  of  the  deed  was  not  to  secure  creditors,  but 
on  the  contrary  to  obstruct  them  in  the  enforcement  of 
their  legal  remedies  in  order  that  the  debtor  might  be  ben- 
efited. The  deed  was  declared  to  be  fraudulent  upon  its 
face  and  was  set  aside.^ 

§  326.  Reservations — Exempt  property. — A  favorite  ground 
of  attacking  assignments  made  by  debtors  for  the  benefit 
of  creditors  is,  that  a  reservation  has  been  made  in  the 
debtor's  interest,^  or  that  there  has  not  been  a  complete 
surrender  of  the  debtor's  dominion  and  control  over  the 
property.  The  question  comes  up  in  various  phases.  Da- 
vis, P.  J.,  observes  :  "  It  is  well  settled  that  the  reservation 


'  80  Ky.  334,  335.  3  Mon.  (Ky.)  i  ;  Bigelow  v.  Stringer, 

'  See,  also,  Vernon  v.  Morton,  8  Dana  40  Mo.  195. 

(Ky.)  247,  264;  Van  Nest  v.  Yoe,  i  'Means  v.  Dowd,  128  U.  S.  273; 

Sandf.  Ch.  (N.  Y.)  4;  Ward  v.  Trotter,  McReynolds  v.  Dedman,  47  Ark.  351. 


§  326  RESERVATIONS.  44 1 

of  the  least  pecuniary  character  by  the  assignor  or  his  fam- 
ily, and  any  device  to  cover  up  the  property  for  the  benefit 
of  the  assignor,  or  secure  to  him  directly  or  indirectly  any 
benefit,  is  fraudulent,  and  has  always  received  the  condem- 
nation of  the  courts.  The  debtor  who  makes  an  assignment 
of  this  character  must  devote  all  his  property  to  the  pay- 
ment of  his  debts,  except  such  as  is  by  law  exempt  from 
execution.  The  withholding  of  any  considerable  sum  of 
money  at  the  time  of  making  an  assignment,  from  the  as- 
signee, must,  we  think,  in  some  form  be  explained,  other- 
wise it  is  sufficient  to  establish  a  fraudulent  intent."^  An 
assignment  is  void  which  does  not  include  the  assignor's 
real  estate.'''  A  reservation  of  $800  worth  of  property^ 
renders  an  assignment  void  on  its  face.  And  an  assign- 
ment is  invalid  if  the  debtor  prefers  his  landlord's  claim  for 
rent  of  a  dwelling-house  with  intent  to  secure  occupation 
for  himself  and  family  subsequent  to  the  assignment  with- 
out further  payment.* 

We  have  already  shown  that  according  to  the  weight  of 
the  best  authority,  a  conveyance  of  a  debtor's  exempt  prop- 
erty cannot  be  annulled  as  fraudulent.  The  same  principle 
appertains  in  the  law  regulating  fraudulent  voluntary  as- 
signments reserving  property  exempt  by  statute.  The  as- 
signment is  not  rendered  void,  for  the  reason  that  creditors 
are  "  not  hindered  or  delayed  by  the  reservation  of  that 
which  they  have  no  right  to  touch."  ^  This  is  an  exception 
to  the  rule  clearly  deducible  from  the  cases,  "  that  no  debtor 
can,  in  an  assignment,  make  a  reservation  at  the  expense 


'  White  V.  Fagan,  25   N.  Y.  Daily  '  Hildebrand  v.  Bowman,  100  Pa.  St. 

Reg.,  p.  269  (Feb.  8,  1884).     See  S.  C.  582.     See  Mulford  v.  Siiirk,  26  Pa.  St. 

18  Weekly  Dig.  (N.  Y.)  358.  474;  Ehrisman  v.  Roberts,  68  Pa.  St. 

'  Price  V.  Haynes,  37  Mich.  487,  per  311.    To  the  same  effect  is  Richardson 

Cooley,  C.  J. ;  s.  C.  i  Am.  Insolv.  Rep.  v.  Marqueze,  59  Miss.  80 ;  s.  C.  42  Am. 

138.  Rep.   353  ;    See   Derby  v.  Weyrich,  8 

*  Clark  V.  Robbins,  8  Kans.  574.  Neb.  176  ;  S.  C.  30  Am.  Rep.  827.    See 

*  Elias  V.  Farley,  2  Abb.  Ct.  App.  §§  46-50. 
Dec.  (N.  Y.)  II. 


442  RESERVING    SURPLUS.  §  327 

of  his  creditors  of  any  part  of  his  income  or  property  for 
his  own  benefit,  nor  can  he  stipulate  for  any  advantage 
either  to  himself  or  family."^  Another  reservation  must 
be  considered. 

§  327.  Reserving  surplus. — Where  a  debtor  assigned  all 
his  property  in  trust  to  pay  certain  specified  creditors,  and 
then,  without  making  provision  for  other  creditors,  to  re- 
convey  the  residue  of  the  property  to  the  debtor,  the  instru- 
ment was  declared  fraudulent  upon  its  face.  The  court 
held  that  it  could  not  be  made  effectual  by  showing  that 
there  was,  as  matter  of  fact,  no  surplus  resulting  to  the 
debtor  after  the  preferred  creditors  were  paid.  Bronson, 
J.,  observed  :  "  The  parties  contemplated  a  surplus,  and 
provided  for  it  ;  and  they  are  not  now  at  liberty  to  say 
that  this  was  a  mere  form  which  meant  nothing.  And 
although  it  should  ultimately  turn  out  that  there  is  no  sur- 
plus, still  the  illegal  purpose  which  destroys  the  deed  is 
plainly  written  on  the  face  of  the  instrument,  and  there  is 
no  way  of  getting  rid  of  it."^  The  Supreme  Court  of 
Nebraska,^  however,  refused  to  follow  this  doctrine,  and 
considered  that  such  a  reservation  was  partial  and  only  in- 
cidental. It  merely  stipulated  for  that  which,  had  it  been 
omitted,  the  law  would  have  implied,  and  required  to  be 
done.*  So  in  Hubler  v.  Waterman^  the  court  observed  : 
"The  reversionary  clause  is  mere  surplusage,  for  it  w^ould 
have  been  implied  if  it  had  not  been  expressed."*^  The 
principle  set  forth  in  these  latter  cases  certainly  embodies 
the  more  logical  rule.  There  is,  however,  an  obvious  dis- 
tinction in  these  cases.  In  Griffin  v.  Barney  the  surplus 
was  to  revert  before  all  the  creditors  were  paid,  which  was 


'  McCIurg  V.  Lecky,  3  P.  &  W.  (Pa.)         '  Morgan  v.  Bogue,  7  Neb.  433. 
91.  ■*  See  Curtis  v.  Leavitt,  15  N.  Y.  9. 

'  Griffin  V.  Barney,  2  N.  Y.  371.   See        *  33  Pa.  St.  414. 
Smitli  V.  Howard,  20  How.  Pr.  (N.  Y.)         «  See  S.  P.  Johnson  v.  McAllister,  30 

128.     Compare  Nicholson  v.  Leavitt,  6  Mo.  327;   Richards  v.  Levin,   16  Mo. 

N.  Y.  521.  598. 


§  S^^  RELEASES.  443 

palpably  fraudulent,  while  in  the  other  cases  the  surplus 
contemplated  was  that  remaining  after  a/l  the  creditors 
had  been  satisfied.  Of  course  the  law  will  not  permit  a 
debtor  in  failing  circumstances  to  convey  all  his  property 
to  trustees,  with  a  view  to  exempt  it  from  execution  for  an 
indefinite  time,  to  authorize  them  to  hold  it  against  credit- 
ors until  the  profits  pay  all  charges,  expenses,  and  debts, 
and  then  to  reconvey  it  or  permit  it  to  revert  to  the  original 
owner.  Property  cannot  be  thus  withdrawn  from  the 
operation  of  the  law  in  its  due  course  against  the  consent 
of  existing  creditors.^ 

§  328.  Releases  exacted  in  assignments. — Assignments  ex- 
acting releases  from  creditors  are  looked  upon  with  great 
disfavor  by  the  courts.'  The  law  seems  to  be  settled  that 
assignments  will  be  declared  fraudulent  and  void  if  creditors 
are  preferred  o/i  condition  of  their  subsequently  executing 
releases  of  their  respective  demands.  The  reason  is  ob- 
vious.^ It  is  a  clear  attempt  on  the  part  of  the  debtor  to 
coerce  his  creditors  to  accede  to  his  terms,  and  a  withhold- 
ing of  his  property  from  them  unless  they  do  so  accede. 
As  was  observed  in  Hyslop  v.  Clarke : '*  "It  does  not  ac- 
tually give  a  preference,  but  is,  in  effect,  an  attempt  on  the 
part  of  the  debtors  to  place  their  property  out  of  the  reach 
of  their  creditors,  and  to   retain  the  power  to  give  such 

preference  at  some  future  period If  they  can  keep 

it  locked  up  in  this  way  in  the  hands  of  the  trustees,  and 
set  their  creditors  at  defiance,  for  three  months,  they  may 
do  so  for  three  years,  or  for  any  indefinite  period."^     The 


1  Arthur  V.  Commercial  &  R.R.  Bank,  ^  Spaulding  v.  Strang,  38  N.  Y.  12; 

17  Miss,  433.  Brown  v.  Knox,  6  Mo.  303  ;  Bennett  v. 

^  Hubbard  v.  McNaughton,  43  Mich,  Ellison,  23    Minn.  242 ;    S.  C.   i  Am. 

224.    See  Lawrence  V.  Norton,  4  Woods  Insolv.    Rep.   36;    May  v.  Walker,   35 

406;   Leitch  V.  Hollister,  4  N.  Y.  211  ;  Minn.  194;   Greeley  v.  Dixon,  21   Fla. 

Baldwin  v,  Peet,  22  Tex.  708 ;    Barney  425. 

V.  Griffin,  2  N.  Y.  365  ;   Bennett  v.  El-  •*  14  Johns.  (N.  Y.)  458, 

lison,  23  Minn.  242  ;  S,  C.  i  Am.  Insolv.  '  See  Grover  v.  Wakeman,  11  Wend, 

Rep.  36.  (N.  Y.)  187, 


444  PREFERRING    CLAIMS.  §  329 

right  of  giving  preferences  cannot  be  so  exercised  as  to 
secure  to  the  debtor  the  future  control  of  the  assigned 
property  or  its  proceeds,  as  continuing  the  business  in  an- 
other's name.* 

It  has  been  considered  competent  for  a  debtor  in  failing 
circumstances  to  make  an  assignment  for  the  benefit  of 
creditors,  providing  that  accommodation  creditors  shall  be 
paid  fir^t  ;  secondly,  those  creditors  who  had  executed  a 
conditional  release  should  receive  fifty  per  cent.  ;  and 
thirdly,  the  residue  of  the  creditors  should  be  paid.'  The 
whole  estate  was  by  this  instrument  devoted  to  the  pay- 
ment of  the  debts.  It  was  considered  that  in  no  sense 
could  it  be  said  that  an  agreement  by  a  debtor  with  a  cred- 
itor to  prefer  him  for  one-half  of  his  demand  in  an  assign- 
ment, on  condition  or  in  consideration  that  the  balance 
should  be  released,  was  a  fraud  upon  those  who  refused 
to  become  parties  to  the  contract.  These  cases  certainly 
go  to  the  verge  in  upholding  an  assignment  of  this  char- 
acter ;  ^  and  where  it  is  apparent  from  the  face  of  the 
deed,  or  is  a  moral  certainty,  that  nothing  will  be  left  to 
the  non-assenting  creditors,  the  court  will  annul  the  assign- 
ment.* 

§  329.  Preferring  claims  in  which  assignor  is  partner — 
Rights  of  survivor. — It  was  contended  by  counsel  in  Welsh 
v.  Britton,^  that  if  an  insolvent  person  made  an  assignment 
for  creditors,  and  preferred  a  debt  due  another  firm,  one 
member  of  which  was  also  a  member  of  the  assigning  firm, 
this  constituted  such  a  reservation  to  one  of  the  assignors 
as  would  avoid  the  assignment.  The  case  of  Kayser  v. 
Heavenrich  ^  was  cited,  but  the  court  said  that  it  could  not 
be  said  to  establish  so  broad  a  principle.     There  a  prefer- 

'  Haydock  v.  Coope,  53  N,  Y.  68.  *  Seale  v.   Vaiden,  4   Woods   661. 

'  Spaulding  v.  Strang,  37  N.  Y.  135  ;  See   Lawrence   v.   Norton,   4  Woods 

S.  C,  38  N.  Y.  9  ;  explained,  Haydock  406. 

V.  Coope,  53  N.  Y.  74.  '  55  Tex.  122. 

^  Seale  v.  Vaiden,  4  Woods  661.  *  5  Kan.  324. 


§  3^9  PREFERRING    CLAIMS.  445 

ence  was  given  to  one  Lowentholl,  and  one  of  the  assign- 
ing firm  was  an  equal  partner  with  Lowentholl  in  the  pre- 
ferred claim.  This  was  held  to  be  a  secret  trust  for  the 
benefit  of  that  member  of  the  firm  and  to  invalidate  the  as- 
signment. The  fact  of  secrecy  was  also  given  prominence. 
On  the  other  hand,  the  case  of  Fanshawe  v.  Lane  ^  asserts 
the  absolute  right  of  an  assigning  firm  to  prefer  such 
debts.  The  Supreme  Court  of  Texas  followed  this  latter 
case.  We  may  here  state  that  the  insolvent  cannot  dele- 
gate to  the  assignee  the  power  to  give  preferences  at  his 
discretion.^ 

A  special  partner  cannot  be  preferred  for  the  amount  of 
his  investment,^  and  where  a  limited  partnership  becomes 
insolvent  its  assets  are  a  special  fund  for  the  payment  of 
its  debts  except  those  due  to  the  special  partner.^  A  sur- 
viving partner  may  make  a  general  assignment  of  the  firm 
assets.^  Mr.  Justice  Harlan  said  :  "  But,  while  the  sur- 
viving partner  is  under  a  legal  obligation  to  account  to  the 
personal  representative  of  a  deceased  partner,  the  latter  has 
no  such  lien  upon  joint  assets  as  would  prevent  the  former 
from  disposing  of  them  for  the  purpose  of  closing  up  the 
partnership  affairs.  He  has  a  standing  in  court  only  through 
the  equitable  right  which  his  intestate  had,  as  between  him- 
self and  the  surviving  partner,  to  have  the  joint  property 
apphed  in  good  faith  for  the  liquidation  of  the  joint  liabili- 
ties. As  with  the  concurrence  of  all  of  the  partners  the 
joint  property  could  have  been  sold  or  assigned,  for  the 
benefit  of  preferred  creditors  of  the  firm,  the  surviving 
partner — there  being  no  statute  forbidding  it — could  make 
the  same  disposition  of  it.     The  right  to  do  so  grows  out 

'  i6  Abb.  Pr.  (N.  Y.)  82.  '  Emerson  v.  Senter,  118  U.  S.  3 

'  Boardman   v.    Halliday,    10  Paige  Williams  v.  Whedon,  109  N.  Y.  341 

(N.  Y.)  223.  Haynes  v.  Brooks,  42  Hun  (N.  Y.)  528 

8  Whitcomb  v.  Fovvle,   10  Daly  (N.  Beste  v.  Burger,  17  Abb.  N.  C.  (N.  Y.) 

Y.)  23  ;  s.  C.  I  Am.  Insolv.  Rep.  160.  162,  and  note  on  the  rights  of  surviv- 

•*  Innes  v.  Lansing,  7  Paige  (N,  Y.)  ing  partners,  and  representatives  of  a 

583.  deceased  partner. 


446  TRUSTEE.  §  330 

of  his  duty,  from  his  relations  to  the  property,  to  administer 
the  affairs  of  the  firm  so  as  to  close  up  its  business  without 
unreasonable  delay ;  and  his  authority  to  make  such  a  pref- 
erence— the  local  law  not  forbidding  it — cannot,  upon  prin- 
ciple, be  less  than  that  which  an  individual  debtor  has  in 
the  case  of  his  own  creditors.  It  necessarily  results  that 
the  giving  of  preference  to  certain  partnership  creditors  was 
not  an  unauthorized  exertion  of  power  by  Moores,  the  sur- 
viving partner."  ^ 

§  330.  Authorizing  trustee  to  continue  business. — It  may 
be  observed  that  an  assignment  drawn  precisely  as  it  ought 
to  be  will  not  undertake  to  speak  to  the  assignee  in  regard 
to  his  duties  under  the  trust.  These  duties,  unless  the 
creditors  themselves  direct  otherwise,  are  simply  to  con- 
vert the  estate  and  pay  the  debts  in  the  order  and  with  the 
preferences  indicated  in  the  instrument.^  There  are  numer- 
ous cases  reported  in  which  assignments  in  trust  for  the 
benefit  of  creditors  have  been  sustained,  although  they  con- 
tained provisions  for  the  continuance  of  the  business  of  the 
assignor,  either  by  himself  or  by  his  trustee.^  It  will  be 
found  upon  examination  that  in  many  of  these  cases,  the 
business  authorized  to  be  carried  on  by  the  assignment  was 
merely  ancillary  to  winding  up  the  debtor's  aJffairs,  and  that 
the  authority  was  given  with  the  view  of  more  effectually 
promoting  the  interests  of  the  creditors.^     In  cases  where 


1  Emerson  v.  Senter,  118  U.  S.  3,  8,  property."     Selden,  J.,  in  Dunham  v. 

2  Ogden  V.  Peters,  21  N.  Y.24.  "The  Waterman,  17  N.  Y.  20. 

true  principle   applicable  to  all  such  '  De  Forest  v.  Bacon,  2  Conn.  633 ; 

cases  is,  that  a  debtor  who  makes  a  Kendall  v.  The  New  England  Carpet 

voluntary  assignment  for  the  benefit  of  Co.,    13   Conn.    383;   Foster   v.    Saco 

his    creditors   may   direct,   in   general  Manuf.    Co.,    12   Pick.    (Mass.)    451  ; 

terms,  a  sale  of  the  property  and  col-  Woodward     v.     Marshall,     22     Pick, 

lection  of  the  dues  assigned,  and  may  (Mass.)   468 ;    Hitchcock   v.    Cadmus, 

also   direct   upon   what   debts  and   in  2  Barb.  (N.  Y.)  381  ;   Ravisies  v.  Al- 

what  order  the  proceeds  shall  be  ap-  ston,  5  Ala.  297  ;  Janes  v.  Whitbread, 

plied  ;  but  beyond  this  can  prescribe  no  11  C.  B.  406. 

conditions  whatever  as  to  the  manage-  ■•  See  De  Wolf  v.  Sprague  Mfg.  Co., 

ment   or  disposition   of  the    assigned  49  Conn.  326. 


^  ^S'^  ILLUSTRATIONS    AND    AUTHORITIES.  447 

the  authority  is  given  chiefly  for  the  benefit  of  the  debtor, 
or  where  it  is  intended  or  calculated  to  hinder  and  delay 
creditors  for  an  unreasonable  period  in  the  collection  of 
their  debts,  it  renders  the  deed  fraudulent  and  void. 

§331.  Illustrations  and  authorities. — Cases  relating  to  this 
class  of  assignments  are  numerous.  In  Owen  v.  Body^ 
the  assignment,  which  was  to  trustees  for  the  benefit  of 
creditors,  giving  preferences,  contained  provisions  invest- 
ing the  trustees  with  power  to  carry  on  the  trade  of  the 
debtor,  and  for  that  purpose  to  lay  out  money  in  payment 
of  rent  and  keeping  up  the  stock  in  trade.  The  deed  was 
adjudged  void  as  being  an  instrument  to  which  creditors 
could  not  reasonably  be  expected  to  assent.  Lord  Wens- 
leydale,  in  giving  his  opinion  in  the  House  of  Lords  in 
the  case  of  Wheatcroft  v.  Hickman,^  referring  to  this  deed 
said  that  the  provisions  contained  in  it  allowing  the  effects 
of  the  debtor,  which  ought  to  have  been  divided  equally 
amongst  his  creditors,  to  be  put  in  peril  by  being  employed 
in  trade,  prevented  it  from  being  a  fair  deed  and  good 
against  creditors.  In  American  Exchange  Bank  v.  Inlocs^ 
the  deed  contained  a  provision  empowering  the  trustee  at 
his  discretion  to  sell  the  property  conveyed  gradually,  in 
the  manner  and  on  the  terms  in  which,  in  the  course  of 
their  business,  the  assignors  had  sold  and  disposed  of  their 
merchandise.  For  that  reason  the  deed  was  adjudged  void. 
Mason,  J.,  said  :  "  Without  adverting  to  other  objection- 
able, if  not  fatal,  provisions  in  this  deed,  the  one  to  which 
we  have  just  referred  is  sufficient,  in  the  judgment  of  this 
court,  to  render  the  deed  null  and  void  as  against  creditors. 
It  simply  seeks,  through  the  instrumentality  of  a  trustee, 
to  provide  for  carrying  on  the  business  of  the  concern  in 
the  same  manner  in  which  it  had  been  before  conducted, 
and  for  an  indefinite  period,  free  of  all  control  or  intcrfer- 


'  5  Adol.  &  El.  28  (31  Eng.   C.  L.        *  9  C.  B.  [N.  S.]  loi. 
254).  2  7  Md.  380. 


448  ILLUSTRATIONS    AND    AUTHORITIES.  §  33 1 

ence  on  the  part  of  creditors.  Surely  if  such  a  provision  in 
a  deed  is  not  calculated  to  hinder  and  delay  creditors,  we 
are  at  a  loss  to  know  what  could  have  such  an  effect,  short 
of  a  conveyance  in  trust  for  the  benefit  of  the  grantor  him- 
self. A  debtor  cannot  thus  postpone  his  creditors  to  an 
indefinite  period  without  their  assent.  A  conveyance  which 
thus  attempts  to  deprive  creditors  of  their  just  rights  to 
enforce  their  claims  against  the  property  of  their  debtor, 
by  placing  it  beyond  their  control  for  an  uncertain  and  in- 
definite period,  must  be  regarded  in  conscience  and  law  as 
a  fraud,"  In  a  later  case  in  the  same  State  ^  an  assignment 
in  trust  for  the  benefit  of  creditors,  authorizing  the  trustee 
to  carry  on  and  conduct  the  business  "for  such  time  as  in 
his  judgment  it  shall  be  beneficial  to  so  do,"  or  to  sell  all 
the  goods  and  stock  in  trade  "  at  such  times,  in  such  man- 
ner, and  for  such  prices  as  he  may  deem  proper,"  was  ad- 
judged void  as  against  creditors.  The  court  said  :  "  It  is 
obvious,  the  certain  effect  of  this  clause  would  be  to  hinder 
and  delay  creditors ;  and  as  against  them  such  provision 
renders  the  deed  utterly  void.  It  is  an  attempt  on  the 
part  of  the  debtor  to  place  his  property,  for  an  uncertain 
and  indefinite  period,  beyond  the  reach  of  his  creditors, 
and  to  make  their  rights  in  a  great  measure  dependent 
upon  the  uncontrolled  discretion  of  a  trustee  of  the  debt- 
or's own  selection.  The  law  will  tolerate  no  such  attempt, 
but  treats  the  act  as  a  fraud  upon  creditors,  and  the  instru- 
ment of  conveyance  as  simply  void  as  against  them."^ 


*  Jones  V.  Syer,  52  Md.  211.  better  performance  of  the  trust  that  the 

"^  See,  also,  Dunham  v.  Waterman,  party  of  the  second  part  shall  have  full 

17  N.  Y.  9.     Authority  given  in  the  as-  power  and   authority    to    finish    such 

signment  to  the  assignee  to  finish  up  work  as  is  unfinished,  to  complete  such 

unfinished  work   will    not  necessarily  buildings  as  are  incompleted,  and  to  pay 

avoid     the    instrument.      Robbins    v.  all  necessary  charges  and  expenses  for 

Butcher,  104  N.  Y.  575.     In  this  case  such  completion  prior  to  the  payment 

the  assignment  contained  the  following  of  all  debts  and  liabilities  hereinbefore 

clause :   "  And   it  is  further  provided  mentioned  and  provided."    Finch,  J., 

that  should  it  be  necessary  and  to  the  said :   "  The    repetition   of   the   word 


§332  DELAY.  449 

§  332.  Delay— Sales  upon  credit.  —  An  insolvent  debtor 
cannot  deprive  his  creditors  of  their  right  to  have  his  prop- 
erty converted  into  money  without  delay.  He  can  make 
an  assignment  with  preferences,  but  he  cannot  authorize 
his  assignee  to  sell  on  credit.^  No  delay  is  permitted  other 
than  such  as  is  reasonably  necessary  to  secure  the  applica- 
tion of  the  property  to  the  payment  of  his  debts.^  In  Dun- 
ham V.  Waterman,^  Selden,  J.,  following  the  reasoning  of 
Nelson,  J.,  in  Cunningham  v.  Freeborn,'*  said:  "That 
wherever  an  assignment  contains  provisions  which  are  cal- 
culated per  se  to  hinder,  delay,  or  defraud  creditors,  al- 
though the  fraud  must  be  passed  upon  as  a  question  of 
fact,  it  nevertheless  becomes  the  duty  of  the  court  to  set 
aside  the  finding,  if  in  opposition  to  the  plain  inference  to 
be  drawn  from  the  face  of  the  instrument.  A  party  must 
in  ail  cases  be  held  to  have  intended  that  which  is  the  neces- 
sary consequence  of  his  acts."^  It  follows  that  when  this 
objectionable  feature  is  embodied  in  the  face  of  the  assign- 
ment, the  court  itself  will  stamp  it  as  fraudulent.     In  Beus 


'  that '  permits  it  to  be  said  that  this  prior  permission  and  approval,  must  be 

provision  is  an  unfinished  sentence  and  so  exercised  at  his  peril  and  subject  to 

confers  no  authority  at  all,  but  no  such  their   prohibition   or   direction  at  any 

criticism   is  made,  and  the  meaning  of  moment,  and  upon   the  application  of 

the  language  is   more   accurately  ex-  any  person  interested  or  aggrieved,  and 

pressed  by  disregarding  the  word  '  that '  so  does  not  involve  an  intent  to  hinder, 

where  it  occurs  the  second  time.    Both  delay,  or  defraud   the  creditors  of  the 

parties  have  argued  the  case  upon  such  assignor.     We  think  the  latter  view  of 

construction.     The    appellant    claims  the  instrument  discloses  its  true  and 

that   the   provision    confers   upon  the  intended  meaning." 

assignee  an  authority  derived  from  the  '  Nicholson  v.  Leavitt,  6  N.  Y.  510; 

assignor  to  unduly  delay  the  execution  Barney  v.  Griffin,  2  N.  Y.  365.     Com- 

of  the  trust  and  divert  the  trust  funds,  pare  Brackett  v.  Harvey,  91  N.  Y.  220. 

in  the  exercise  of  his  discretion,  and  free  -Bennett  v.  Ellison,  23  Minn.  242  ; 

from  the  supervision  and  control  of  the  S.  C.  i  Am.  Insolv.  Rep.  36.    See  Keevil 

courts,  and  so  is  fraudulent  and  void  v.  Donaldson,  20  Kans.  165  ;   S.  C.    I 

upon   its   face.     The  respondent  con-  Am.  Insolv.  Rep.  153. 

tends  that  the  authority  given  is  upon  a  '  17  N.  Y.  21. 

condition  which  rests  in  the  discretion  *  11  Wend.  (N.  Y.)  251-254. 

and  judgment  of  the  courts,  and  if  ex-  '  See  Coleman  v.  Burr,  93  N.  Y.  31  ; 

ercised  by  the  assignee  without  their  also  §§  9,  10. 
29 


450 


SALES    UPON    CREDIT.  §33^ 


V.  Shaughnessy^  the  insolvent  directed  that  the  "times, 
places,  and  terms  of  selling  the  property  shall  be  agreed 
on  by  the  trustee  and  the  majority  in  interest  of  the  first 
and  second  class  creditors,"  and  that  if  they  did  not  agree, 
then  two-thirds  of  all  of  the  creditors  should  direct  such 
"times,  places,  and  terms."  The  court  said  there  seemed 
to  be  but  one  question  to  consider,  and  that  turned  entirely 
upon  the  construction  to  be  placed  upon  the  words  "  terms 
of  selling,"  whether  these  words  in  the  deed  of  trust  em- 
braced the  power  to  sell  upon  credit.  Continuing,  it  was 
said  that  the  courts  generally  held  that  deeds  of  assign- 
ment, giving  authority  to  the  assignee  to  sell  upon  credit, 
were  fraudulent  and  void  as  to  creditors  not  assenting 
thereto,  and  especially  was  this  the  case  where  the  deeds 
made  preferences  between  creditors.  In  New  York  this 
general  rule  is  fully  recognized.  The  case  of  Kellogg  v. 
Slauson,^  at  first  reading  would  seem  to  be  a  departure 
from  the  rule,  but  upon  a  more  careful  consideration  it 
will  be  found  to  be  consistent  with  it.  The  assignees  in 
that  case  were  authorized  to  sell  the  property  "on  such 
terms  as  in  their  judgment  might  be  best  for  the  parties 
concerned,  and  convert  the  same  into  money."  The  court, 
in  upholding  the  assignment  said  that  this  discretion  must 
he  exercised  within  legal  limits.  In  Brigham  v.  Tilling- 
faast^  the  case  of  Kellogg  v.  Slauson  is  referred  to,  and  the 
court  says  that  the  words  "  convert  the  same  into  money," 
limited  the  disposition  of  the  property  to  sales  for  cash,  and 
that  such  was  the  purport  of  the  ruling  in  that  case.  The 
same  rule  is  reiterated  in  Rapalee  v.  Stewart."^    The  assign- 


'  2  Utah  499.     See  McCleery  v.  Al-  with  or  without  preferences ;  but  such 

len,  7  Neb.  21.  assignees  are  bound  to  make  an  imme- 

-  1 1  JSf.  Y.  302.  diate  application  of  the  property.    And 

^  13  N.  Y.  215.  any  provision  contained  in  the  assign- 

*  27 _N.  Y.  311.     "The  true  rule  to  ment  which  shows  that  the  debtor,  at 

be   observed    is    this :     An   insolvent  the  time  of  its  execution,  intended  to 

debtor  may  make  an  assignment  of  all  prevent    such    immediate   application, 

his  estate  .to  trustees  to  pay  his  debts  will  avoid   the  instrument,  because  it 


§333  SALES    UPON    CREDIT. 


451 


ment  held  to  be  valid  in  the  case  of  Sumner  v.  Hicks ^ 
contained  language  similar  to  that  found  in  Kellogg  v. 
Slauson,  and  indeed  the  closing  words  of  the  objectionable 
provision  were  precisely  the  same,  viz.:  "And  convert 
the  same  into  money.  "^  The  inference  from  these  cases 
is  that  if  these  last  words  had  been  omitted  the  assi^m- 
ments  would  have  been  held  void  as  authorizing  sales  upon 
credit. 

The  word  "term "  signifies,  among  other  things,  " a  limit," 
"  a  boundary."  If  we  say  the  power  of  sale  is  granted  with- 
out "  limit,"  without  "  boundary,"  it  can  be  exercised  to  an 
unlimited  extent  and  without  bounds.  In  the  case  of  Beus 
V.  Shaughnessy^  there  was  no  restriction  whatever  upon 
the  power  of  sale  granted  to  the  trustees  and  a  fixed  pro- 
portion of  the  creditors.  They  were  authorized  to  sell 
upon  such  "terms"  as  they  might  deem  proper,  and  this 
power  had  no  limits,  no  bounds.  This  broad  grant  cer- 
tainly would  necessarily  embrace  the  power  to  sell  upon 
credit. 

§  333-  — Ir»  Wisconsin,  in  the  case  of  Hutchinson  v.  Lord,* 
where  the  assignment  empowered  the  assignee  to  sell  in 
such  manner  and  "upon  such  terms  and  for  such  prices  as 
to  him  shall  seem  advisable,"  it  was  held  that  this  language 
gave  power  to  sell  upon  credit,  which  would  necessarily 
operate  to  hinder  and  delay  creditors,  and  rendered  the 
assignment  fraudulent  and  void.  In  the  case  of  Keep  v. 
Sanderson,^  although  the  objectionable  words  were  exactly 
those  found  in  Kellogg  v.  Slauson,  yet  the  court  held  that 
they  conferred  an  authority  to  sell  upon  credit,  and  thus 


shows  that  it  was  made  with  '  intent  to  courts."      Brigham  v.  Tillinghast,    13 

hinder  and  delay  creditors  in  the  coi-  N.  Y.  215-220. 

lection  of  their  debts.'     Such  an  intent  '  2  Black  532. 

expressed  in  the  instrument  .or  proved  '  See  Keep  v.  Sanderson,  12  Wis.  362. 

aliunde,  is  fatal  alike  by  the  language  ^  2  Utah  499. 

of  our  statute  and  the  well-settled  ad-  •»  i  Wis.  286. 

judications  of  the  English  and  American  '  2  Wis.  42. 


452  EXEMPTING    ASSIGNEE.  §   334 

avoided  the  whole  assignment.  In  Woodburn  v.  Mosher^ 
the  authority  to  the  assignees  was  to  convert  the  property 
into  money  "within  convenient  time  as  to  them  shall  seem 
meet."  It  was  held  that  the  assignment  was  void  upon  its 
face.  In  Keep  v.  Sanderson^  it  was  decided  that  a  clause 
in  an  assignment  authorizing  the  assignee  to  sell  and  dis- 
pose of  the  assigned  property  "  upon  such  terms  and  con- 
ditions as  in  his  judgment  may  appear  best  and  most  to 
the  interest  of  the  parties  concerned,"  was  authority  to  sell 
on  credit,  and  that  it  was  void  as  to  creditors,  in  accord- 
ance with  the  decision  on  the  former  appeal.^ 

§  334.  Exempting  assignee  from  liability. — Another  sub- 
terfuge of  insolvent  debtors  must  be  noticed.  In  De  Wolf 
V.  Sprague  Mfg.  Co.^  the  deed  contained  a  clause  which 
provided  that  "in  case  the  same  (meaning  the  mill,  etc.)  are 
thus  run  by  him  or  otherwise,  he  shall  not  be  liable  person- 
ally for  the  expenses  or  losses  arising  therefrom,  but  the 
same  shall  be  chargeable  to  the  trust  fund  vested  in  him." 
This  was  held  in  connection  with  the  right  to  run  the  mills 
and  print  works,  to  furnish  additional  evidence  of  the 
fraudulent  purpose  for  which  the  assignment  was  executed. 
A  failing  debtor  cannot  be  permitted  to  put  at  hazard  the 
trust  fund  which  justly  belongs  to  his  creditors  by  author- 
izing the  trustee  to  manage  it  without  due  prudence  and 
caution.  This  question  was  before  the  New  York  Court 
of  Appeals  in  Litchfield  v.  White.^  In  that  case  the  assign- 
ment contained  a  clause  by  which  it  was  mutually  agreed 
between  the  parties  to  it  that  the  assignee  should  not  be 
held  liable  or  accountable  for  any  loss  that  might  result 
to  the  trust  property  or  the  proceeds  of  it,  unless  the  same 


'  9  Barb.  (N.  Y.)  255.  the  benefit  of  creditors.   Traer  v.  Clews, 

M 2  Wis.  361.  115U.  S.  528. 

3  A  trustee  in    bankruptcy  may  sell  *  49  Conn.  328. 

the  property  of  the   estate   on  credit  *  7  N.  Y.  442. 
where  he  deems  such  action  most  for 


§  335         PROVIDING  FOR  COUNSEL  FEES.  453 

should  happen  by  reason  of  the  gross  negligence  or  willful 
misfeasance  of  the  assignee.  The  assignment  was  adjudged 
void.  Chief-Justice  Ruggles  said  :  "  A  failing  debtor  by 
an  assignment  puts  his  property  where  it  cannot  be  reached 
by  ordinary  legal  process.  He  puts  it  into  the  hands  of  a 
trustee  of  his  own  selection,  often  his  particular  friend, 
sometimes  a  man  to  whom  the  creditors  would  not  have 
been  willing  to  confide  such  a  trust.  The  debtor  has  an 
interest  in  the  application  of  the  trust  funds  to  the  pay- 
ment of  his  debts ;  but  the  creditors  have  usually  a  far 
greater  interest  therein  ;  and  that  interest  depends  in  many 
cases  on  the  competency  and  diligence  of  the  assignee. 
The  debtor  cannot  be  permitted,  by  creating  a  trust  for  his 
creditors,  to  place  his  property  where  it  cannot  be  reached 
by  ordinary  legal  remedy,  and  at  the  same  time  exempt  the 
trustee  from  his  proper  responsibility  to  his  creditors."^ 

§  335-  Providing  for  counsel  fees. — The  question  of  the 
right  of  the  assignor  to  provide  for  or  interfere  in  the  mat- 
ter of  the  assignee's  counsel  fees  has  been  before  the  courts 
in  various  forms.  In  Heacock  v,  Durand^  the  assi2:nee 
was  a  lawyer,  and  by  the  provisions  of  the  assignment  was 
to  be  entitled  to  "  a  reasonable  and  lawful  compensation 
or  commission  for  his  own  services,  both  as  assignee  as 
aforesaid,  and  as  the  lawyer,  attorney,  solicitor,  and  counsel 
in  the  premises."  The  assignment  was  annulled  on  the 
theory  that  the  power  given  to  charge  counsel  fees  tended 
so  directly  to  the  impairment  of  the  fund  and  the  injury  of 
creditors,  that  it  was  impossible  to  offer  a  valid  reason  in 
its  support.  The  provision  places  the  assignee  in  two  in- 
consistent positions.  This  question  was  before  the  New 
York  Court  of  Appeals  in  Nichols  v.  McEwen,^  and  the 


'  Compare  Casey  v.  Janes,  37  N,  Y.         -  42  111.  231. 
611  ;  Matter  of  Cornell,  no  N.  Y.  357  ;         ^  17  N.  Y.  22. 
Matter  of  Dean,  86  N.  Y.  398,  as  to 
duties  of  assignee. 


454  AUTHORITY  TO  COMPROMISE.  §  336 

court  held  that  such  a  clause  was  fraudulent  in  its  character, 
and  would  vitiate  the  assignment.  Roosevelt,  J.,  observed 
that  to  sanction  such  a  clause  "  would  be  establishing  a 
practice  pregnant  in  many  cases  with  the  most  mischievous 
consequences."  Denio,  J.,  says,  that  an  insolvent  debtor 
has  no  right  "  to  create  such  an  expensiv^e  agency  for  the 
conversion  of  his  property  into  money,  and  distributing  it 
among  his  creditors.  Besides  being  wrong  in  principle,  it 
is  calculated  to  lead  to  obvious  abuses."^  It  is  no  objec- 
tion, however,  to  the  instrument,  that  provision  is  made  for 
the  payment  of  a  reasonable  attorney's  fee  for  the  examin- 
ation of  the  facts,  and  for  advice  and  services  in  drawing 
up  the  assignment  and  securing  it  to  be  properly  acknowl- 
edged and  placed  on  record.  But  at  this  point  the  control 
of  the  assignor  ceases.^ 

§  336.  Authority  to  compromise. — The  authority  given  to 
the  assignees  "  to  compromise  or  compound  any  claim  by 
taking  a  part  for  the  whole,  when  they  shall  deem  it  expe- 
dient so  to  do,"  was  considered  by  the  New  York  Supreme 
Court  not  to  expressly  authorize  or  require  an  illegal  act  to 
be  done,  and  the  court  refused  to  vitiate  the  assignment.^ 
And  where  the  instrument  authorized  the  assignee  to  com- 
pound "  choses  in  action,  taking  a  part  for  the  whole  when 
he  shall  deem  it  expedient,"  the  assignment  was  sustained. 
This  clause  was  held  to  vest  no  arbitrary  power  in  the  as- 
signee to  compromise  where  such  action  was  neither  neces- 
sary nor  proper,  but  merely  to  confer  the  discretion  which 
the  law  recognizes  to  compound  doubtful  and  dangerous 
debts  in  cases  where  the  safety  and  interest  of  the  fund  de- 
manded such  action.  "  It  confers  upon  the  assignee,"  said 
Finch,  J.,  "  no  unlawful  or  arbitrary  power,  and  takes  away 
from  the  creditors  no  just  protection."^     On  the  other  hand, 

1  Compare  Campbell  v.  Woodworth,  ^  Ginther  v.  Richmond,  18  Hun  (N. 

24  N.  Y.  305  ;  Dimon  v.  Hazard,  32  N.  Y.)  234. 

Y.  71.  ■*  Coyne  v.  Weaver,  84  N.  Y.  391  ; 

-  Hill  V.  Agnew,  12  Fed.  Rep.  233.  s.  C.  i  Am.   Insolv.   Rep.   395;   S.   P. 


§337  FRAUD    OF    ASSIGNEE.  455 

the  power  given  in  the  assignment  to  the  assignee  to  com- 
promise with  creditors,  is  held  to  restrain  the  creditors  until 
the  attempt  to  compromise  is  made.  Thus  they  would  be 
hindered,  and  a  delay  even  for  a  single  day  would  be  fatal 
to  the  assignment,  and  whether  the  delay  was  directed  by 
the  instrument,  or  justified  by  its  provisions,  or  made  neces- 
sary in  the  execution  of  its  provisions,  made  no  difference.^ 

§  337-  Fraud  of  assignee. — The  fiduciary  character  of  his 
position  precludes  the  assignee  from  taking  any  advantage 
of  his  influence  as  such,  or  from  using,  for  purposes  of  per- 
sonal gain  or  profit,  any  information  acquired  while  acting 
in  that  capacity.  Every  agreement  having  such  an  object 
in  view,  made  with  the  assignors,  or  with  any  of  the  cred- 
itors, especially  if  not  approved  by  and  communicated  to 
all  the  parties  in  interest,  is  looked  upon  by  the  courts  with 
great  suspicion  and  distrust,  and  if  tainted  with  the  slight- 
est evidence  of  fraud,  concealment,  or  misconduct  on  the 
part  of  the  assignee  in  its  procurement,  will  be  set  aside  as 
inequitable  and  unjust,  and  he  will  not  be  permitted  to 
reap  any  personal  advantage  from  it.~ 

An  assignment  honestly  made  for  a  lawful  purpose  can- 
not be  defeated  by  proof  that  the  assignee  abused  his  trust, 
misappropriated  the  property,  or  acted  dishonestly  in  its 
disposal.^  Where  the  assignee  is  guilty  of  neglect  or  mis- 
feasance, the  creditor  feeling  aggrieved  should  apply  to  the 
court  for  a  compulsory  accounting,*  or  seek  his  removal, 
and  secure  the  appointment  of  a  new  trustee  or  assignee.^ 
Brown,  J.,  said,  in  Olney  v.  Tanner  i'^  "  If  an  assignment 


McConnell  v.  Sherwood,  84  N.  Y.  522  ;  ••  Shattuck  v.  Freeman,  i  Met.  (Mass.) 

Bagley  v.  Bowe,  105  N.  Y.  177.  15. 

'  McConnell  v.  Sherwood,  84  N.  Y.  ^  Olney  v.  Tanner,  10  Fed.  Rep.  115. 

531.  Compare  Glanny  v.  Lani^tlon,  98  U.  S. 

'  Clark  V.  Stanton,  24  Minn.  232  ;  S.  29,  and  cases  cited.     Benfield  v.  Solo- 

C.  I  Am.  Insolv.  Rep.  86.  mons,  9  Ves.  83 ;  Matter  of  Cohn,  78 

**  Cuyler  V.  McCartney,  40  N.  Y.  237 ;  N.  Y.  248;  S.  C.  i   Am.  Insolv.  Rep. 

Olney  V.  Tanner,  10  Fed.  Rep.  114,  115;  221. 

Eicks  V.  Copeland,  53  Tex.  581.  *  10  Fed.  Rep.  114,  115. 


456  INCOMPETENCY    OF    ASSIGNEE.  §  338 

is  legally  complete  and  perfect,  and  is  intended  to  devote, 
and  does  devote,  all  the  debtor's  property  to  the  payment 
of  his  debts,  it  cannot  be  invalidated  through  the  subse- 
quent remissness  or  inefficiency  of  the  assignee.  Creditors 
have  ample  remedy  against  the  assignee  for  his  misconduct, 
if  any  ;  and  they  should  be  held  to  these  remedies,  rather 
than  be  allowed  to  subvert  the  assignment  on  the  claim 
that  such  remissness  is  an  evidence  of  original  fraudulent 
intent."^  On  the  other  hand,  if  the  assignment  is  set  aside 
as  fraudulent,  the  acts  of  the  assignee,  performed  in  good 
faith  in  the  execution  of  the  trust,  will  not  be  disturbed  ; 
whether  the  assignment  be  fraudulent  in  fact  or  construct- 
ively so,  the  assignee  will  not  be  held  to  account  for  the 
property  or  its  proceeds  which  have  been  paid  out  by  him 
in  good  faith. ^ 

§  33^-  Ignorance  or  incompetency  of  assignee  as  badge  of 
fraud. — The  selection  of  an  incompetent  assignee  is  regarded 
in  the  law  as  a  badge  of  fraud.^  Blindness  in  the  assignee 
is  considered  an  indicuwi  of  fraud  on  the  part  of  the  as- 
signor who  selects  him.^  So,  choosing  an  insolvent  assignee 
\s  prima  facie  evidence  of  an  intent  to  defraud  ;**  as  is  the 
selection  of  an  assignee  unfit  to  attend  to  business  by  rea- 


'  Citing  Hardmann  v.  Bowen,  39  N.  must  be  assented  to,  and  the  instru- 

Y.  200 ;  Shultz  V.  Hoagland,  85  N.  Y.  ment  acknowledged  by  the  assignee. 

465.  Rennie  v.  Bean,  24  Hun  (N.  Y.)  123  ; 

'^  Smith  V.  Craft,  II  Biss.  351 ;  Wake-  S.  C.  i  Am.  Insolv.  Rep.  420;  Hard- 
man  V.  Grover,  4  Paige  (N.  Y.)  23.  In  mann  v.  Bowen,  39  N.  Y.  196;  Britton 
Pennsylvania  the  assignment  vests  the  v.  Lorenz,  45  N.  Y.  51.  If  a  party 
title  although  the  assignee  may  be  ig-  allows  his  name  to  be  used  in  a  fraud- 
norant  of  the  assignment ;  it  is  valid  ulent  assignment  and  suffers  the  prop- 
whether  the  assignee  accepts  the  trust  erty  to  be  squandered  he  may  be  com- 
or  not,  for  a  trust  will  not  fail  for  want  pelled  to  account  to  creditors.  Hughes 
of  a  trustee  (Mark's  Appeal,  85  Pa.  St.  v.  Bloomer,  9  Paige  (N.  Y.)  269. 
231  ;  S.  C.  Slid  nom.  First  Nat.  Bank  ^  Guerin  v.  Hunt,  6  Minn.  395. 
of  Newark  v.  Holmes,  i  Am.  Insolv.  *  See  Cram  v.  Mitchell,  i  Sandf.  Ch. 
Rep.  150.     See  Johnson  v.  Herring,  46  (N.  Y.)  252. 

Pa.  St.  415;  Blight  V.  Schenck,  10  Pa.         ^  Reed  v.  Emery,  8  Paige  (N.  Y.) 

St.  285),  but  in  New  York  the  trust  417. 


§  339  ASSIGNMENTS.  457 

son  of  a  lingering  disease.^  It  was  with  much  doubt  and 
hesitation  that  entire  hititude  in  the  selection  of  the  trustee 
or  assignee  was  confided  to  the  debtor,^  and  the  insolvent 
having  the  choice  of  his  own  assignee,^  without  consulta- 
tion with  or  consent  of  his  creditors,  must  see  to  it  that  he 
appoints  a  person  competent  to  protect  the  rights  of  all 
parties  interested  under  the  assignment.  If  it  appears  that 
the  selection  of  an  incompetent  assignee  was  made  in  order 
to  allow  the  assignor  to  control  the  administration  of  the 
estate,  then  the  assignment  will  be  avoided,  because  such 
an  intent  would  be  a  fraud  upon  creditors.  Where  the 
assignee,  however,  is  selected  without  any  improper  motive, 
and  proves  incompetent,  he  may  be  removed  upon  a  proper 
application,  and  a  suitable  person  substituted  by  the  court 
to  carry  out  the  trust.*  The  words  "misconduct"  and 
"  incompetency,"  as  used  in  the  New  York  statute  relat- 
ing to  the  removal  of  an  assignee,  are  construed  to  have 
no  technical  meaning,  but  were  intended  to  embrace  all  the 
reasons  for  which  an  assignee  ought  to  be  removed.^ 


§  339-  Transfers  inuring  as  assignments. — Preferences  in 
the  absence  of  a  bankrupt  act  are  usually  upheld,  though 
avoided  by  the  statutory  system  prevailing  in  some  parts 
of  the  Union,  A  curious  policy  exists  upon  this  subject 
in  some  of  the  States.  Thus  in  Alabama  it  is  said  to  be  a 
settled  proposition  of  law  that  a  mortgage  or  deed  of  trust 


'  Currie  v.  Hart,  2  Sandf.  Ch.  (N.  Y.)  goner,  28  Pa.  St.  430  ;  Shultz  v.  Hoag- 

353.  land,  85  N.  Y.  464 ;  Baldwin  v.  Buck- 

''  See  Cram  v.  Mitchell,  i  Sandf.  Ch.  land,  1 1   Mich.  389 ;  Matter  of  Cohn, 

(N.  Y.)  253.  78  N.  Y.  248 ;  s.  C.  I  Am.  Insolv.  Rep. 

^  See  Burr  v.  Clement,  9  Col.  i.  221 ;  Montgomery  v.  Kirksey,  26  Ala. 

*  See  Guerin  v.  Hunt,  6  Minn.  395.  172;  Burrill  on  Assignments,  5th  ed., 

*  Matter  of  Cohn,  78  N.  Y.  248  ;  S.  C.  §  92.  The  fact  that  the  assignee  is  re- 
I  Am.  Insolv.  Rep.  223.  As  to  the  quired  to  give  a  bond  will  not  relieve 
effect  of  the  selection  of  an  incompe-  the  assignor  from  the  exercise  of  pru- 
tent  assignee,  see  Jennings  v.  Prentice,  dence  in  his  selection.  Holmberg  v. 
39  Mich.  421  ;  Connah  v.  Sedgwick,  i  Dean,  21  Kans.  73. 

Barb.  (N.  Y.)  210;  Shryock  v.  Wag- 


458  ASSETS    EXCEEDING    LIABILITIES.  §  34O 

which  conveys  substa^itially  all  the  debtor  s  property  for 
the  security  of  one  or  more  particular  creditors  to  the  ex- 
clusion of  others,  the  intention  of  which  is  to  give  a  pref- 
erence or  priority  of  payment  to  the  former,  operates  as  a 
general  assia:nmcnt  under-  the  statute,  and  inures  to  the 
benefit  of  all  the  creditors  equally.^  In  Illinois  the  sur- 
render by  an  insolvent  of  dominion  over  his  entire  estate, 
with  intent  to  evade  the  operation  of  the  assignment  act, 
and  to  create  preferences,  whether  made  by  one  or  more 
instruments,  operates  as  an  assignment  under  the  act,  the 
benefit  of  which  can  be  claimed  by  any  unpreferred  cred- 
itor.''^ In  New  York,  however,  it  was  held  that  a  specific 
assignment  of  property  by  a  debtor  for  the  benefit  of  one 
or  a  portion  of  his  creditors  did  not  come  within  the  pro- 
visions of  the  assignment  act  of  that  State,  and  was  not 
void  by  reason  of  its  not  being  executed  in  compliance 
with  the  provisions  of  the  assignment  act.^ 

§  340.  Assets  exceeding  liabilities. — The  question  often 
arises  as  to  what  persons  are  entitled  to  make  assignments. 
Where  it  is  clear  that  the  assets  are  largely  in  excess  of  the 
liabilities  of  the  debtor,  it  may  raise  a  presumption  of  an 
intent  to  hinder  and  delay  creditors  in  the  collection  of 
their  just  demands,  and  amount  to  a  prhna  facie  case  of 
fraud. ^  In  the  Missouri  Court  of  Appeals  an  assignment 
which,  after  reciting  that  the  assets  amounted  to  three 
times  the  liabilities,  clothed  the  trustees  with  discretionary 
power  to  carry  on  the  business  of  the  firm  "  for  such  time 
as  the  trustees  shall  deem  for  the  best  interest  of  the  cred- 


'  Shirley  V.  Teal,  67  Ala.  451  ;  Code,  Corby,    21    Fed.    Rep.    737;   Clapp  v. 

Ala.  (1876),  §  2126;  Warren  V.  Lee,  32  Dittman,   21   Fed.  Rep.   15;  Kerbs  v. 

Ala.  440  ;  Stetson  V.  Miller,  36  Ala.  642.  Evving,  22  Fed.  Rep.  693. 

"^  White    V.  Cotzhausen,   129  U.   S.  *  Royer  Wheel  Co.  v.  Fielding,  loi 

329.      See   Kellog  v.    Richardson,    19  N.  Y.  504. 

Fed.  Rep.  70,  72  ;  Martin  v.  Hausman,  *  Livermore  v.  Northrup,  44  N.  Y. 

14  Fed.  Rep.  160;  Freund  v.  Yaeger-  109;    Guerin   v.    Hunt,   8  Minn.  477. 

man,  26  Fed.  Rep.  812,  814;  Perrj'  v.  See  Bates  v.  Ableman,  13  Wis.  644. 


§  340  ASSETS    EXCEEDING    LIABILITIES.  459 

itors,  and  necessary  for  the  purpose  of  preventing  shrinkage 
and  loss,  and  of  closing  out  and  liquidating  the  same  to  the 
best  advantage,"  was  declared  voidable  as  tending  to  hinder, 
delay,  and  defraud  creditors.^  It  is  sometimes  contended 
that,  as  assignments  for  the  benefit  of  creditors  are  generally 
made  by  embarrassed  and  insolvent  debtors,  such  disposi- 
tions of  property  can  only  be  made  by  that  class  of  per- 
sons. "This  doctrine,"  said  Comstock,  J.,  "  has  no  foun- 
dation in  principle  or  authority.  These  assignments  are  in 
their  nature  simply  trusts  for  the  payment  of  debts.  The 
power  to  create  such  trusts  is  certainly  not  peculiar  to  in- 
solvent men.  On  the  contrary  it  is  a  power  more  unques- 
tionably possessed  by  men  who  are  entirely  solvent 

This  right  of  disposition,  on  general  principles  of  law  and 
justice,  was  never  doubtful  except  in  case  of  a  debtor's  in- 
ability to  meet  his  engagements.  In  that  condition  the 
claims  of  creditors  are  in  justice  paramount,  and  the  debt- 
or's power  to  dispose  of  his  estate,  even  for  their  benefit, 
was  not  established  without  a  struggle.  In  short,  it  was 
the  insolvency  rather  than  the  solvency  of  a  debtor  which 
suggested  the  doubt  in  regard  to  the  right  of  putting  the 
whole  or  any  part  of  his  property  in  trust  for  the  benefit  of 
creditors."^  As  gathered  from  the  authorities,  the  vital 
question  in  these  cases  is,  whether  the  transfer  is  honestly 
made  with  the  sole  intention  of  applying  the  property  in 
satisfaction  of  the  creditors'  demands,  or  whether  it  is 
merely  a  scheme  or  contrivance  to  place  the  debtor's  estate, 
for  a  time,  beyond  the  reach  of  the  creditors'  remedies,  pre- 
vent a  sacrifice  of  the  property,  secure  the  payment  of  the 
creditors'  claims,  and  ultimately  realize  a  surplus  to  the  as- 
signor. In  the  latter  case  it  should  clearly  be  regarded  as 
a  plan  devised  to  hinder  and  delay  creditors.  Resort  by  a 
solvent  man  to  the  methods  devised  for  insolvents  is  justly 


'  First  Nat.  Bank  v.  Hughes,  loMo.        '  Ogden  v,  Peters,  21  N.  Y.  24. 

App.  14. 


460  ASSIGNMENTS    TO    PREVENT    PREFERENCE.  §  341 

calculated  to  arrest  attention  and  excite  the  most  searching 
inquiry  as  to  hidden  motives. 

§  341.  Assignments  to  prevent  preference. — According  to 
the  doctrines  of  the  common  law,  the  validity  of  an  as- 
signment cannot  be  assailed  simply  because  its  effect  is  to 
prevent  a  party  from  obtaining,  by  judgment  and  execu- 
tion, a  priority  and  preference  over  other  creditors.^  Tem- 
porary interference  with  particular  creditors  in  the  prosecu- 
tion of  their  claims  by  the  ordinary  legal  remedies,  is  a 
necessary  and  unavoidable  incident  to  a  just  and  lawful 
act,  which,  however,  in  no  respect  impairs  the  validity  of 
the  transaction.^  The  rule  of  equity  requires  the  equal  and 
ratable  distribution  of  the  debtor's  property  for  the  benefit 
of  all  his  creditors.  It  would  be  strange  indeed  if  the 
debtor,  by  making  a  disposition  of  his  property  with  the 
design  to  effectuate  the  application  of  this  rule,  should  be 
adjudged  guilty  of  hindering  and  delaying  his  creditors. 
This  precise  question  arose  in  Pickstock  v.  Lyster.^  In 
that  case  a  debtor,  being  sued,  made  an  assignment  by 
deed  of  all  his  effects,  for  the  equal  benefit  of  his  credit- 
ors. The  jury  having  been  instructed  that  they  must  find 
the  deed  void  if  made  with  the  intent  to  defeat  the  plain- 
tiff in  his  execution,  returned  a  verdict  in  his  favor.  But 
the  verdict  was  set  aside  upon  the  ground  that  the  jury 
were  misdirected.  Lord  Ellenborough  held  that  the  as- 
signment was  "to  be  referred  to  an  act  of  duty  rather  than 
of  fraud,  when  no  purpose  of  fraud  is  proved.  The  act 
arises  out  of  a  discharge  of  the  moral  duties  attached  to 
his  character  of  debtor,  to  make  the  fund  available  for  the 

whole  body  of  creditors It  is  not  the  debtor  who 

breaks  in  upon  the  rights  of  the  parties  by  this  assignment, 
but  the  creditor  who  breaks  in  upon  them  by  proceeding 
in  his  suit.     I  see  no  fraud ;  the  deed  was  for  the  fair  pur- 


'  Reed  v.  Mclntyre,   98  U.  S.  510.         '  Mayer  v.  Hellman,  91  U.  S.  500. 
See  Chap.  XXV.  '  3  Maule  &  S.  371. 


§  341  ASSIGNMENTS    TO    PREVENT    PREFERENCE.  46 1 

pose  of  equal  distribution."  In  the  same  case,  Bayley,  J., 
said  :  "  It  seems  to  me  that  this  conveyance,  so  far  from 
being  fraudulent,  was  the  most  honest  act  the  party  could 
do.  He  felt  that  he  had  not  sufficient  to  satisfy  all  his 
debts,  and  he  proposed  to  distribute  his  property  in  liqui- 
dation of  them  ;  this  was  not  acceded  to,  for  the  plaintiff 
endeavored  by  legal  process  to  obtain  his  whole  debt,  the 
obtaining  of  which  would  have  swept  away  the  property 
from  the  rest  of  the  creditors."^  If  the  assignment  has 
been  fairly  and  legally  made,  and  creditors  obtain  a  ben- 
efit from  it,  their  rights  cannot  be  divested  by  proof  of 
any  stratagem  practiced  by  the  assignor  to  prevent  at- 
tachments till  this  object  could  be  secured.  If  no  attach- 
ments were  issued,  even  fraud  practiced  by  the  debtors  to 
defeat  such  process  would  give  the  creditor  no  lien  upon 
the  property  ;  notwithstanding  the  grossest  dishonesty  of 
this  kind,  it  would  remain  as  it  was;  and  so  long  as  it 
continued  the  property  of  the  debtors,  unaffected  by  any 
attachments,  no  fraudulent  conduct,  calculated  to  impose 
upon  a  creditor  and  keep  him  at  bay,  would  disqualify  the 
debtor  from  making  a  valid  assignment  under  the  statute 
for  the  benefit  of  creditors  generally."  Fraud  or  misrepre- 
sentation on  the  part  of  the  assignor,  entering  into  or  affect- 
ing the  debt  of  a  particular  creditor,  will  not  be  sufficient 
to  annul  a  general  assignment  in  favor  of  creditors.^ 


'  See  Pike    v.   Bacon,  21  Me.  281  ;  whereby  some  of  the  creditors  might 

Hauselt  V.  Vilmar,  2  Abb.  N.   C.  (N.  obtain   an   unjust   preference,    and    to 

Y.)  222,  afli'd  76  N,  Y.  630 ;    Baldwin  secure  it  to  be  applied  for  the  benefit 

V.  Peet,  22  Tex.  708  ;  Bowen  v.  Bram-  of  all  the  creditors,  the  assignment  was 

idge,  6  C.  &  P.  140.     See  Holbird  v.  fraudulent  and  void. 

Anderson,    5   T.   R.  235.     It  is  said,  -  Pike  v.  Bacon,  21  Me.  286. 

however,  in  Dalton  v.  Currier,  40  N.  '  Kennedy  v.  Thorp,  51   N.  Y.  174; 

H.    246,  that   as  the  avowed   purpose  Spencer  v.  Jackson,  2  R.  I.  35  ;  Lin- 

and  aim  of  the  assignment,  and  its  only  inger  v.  Raymond,   12  Neb.  19;  Hor- 

object  and  consideration,  as  stated  in  witz   v.    Ellinger,    31    Md.    504.      But 

the  instrument,  was  to  defeat  the  lia-  compare  Wavcrly  Nat.  Bank  v.  Halsey, 

bility  of  the  property  to  be  attached,  57  Barb.  (N.  Y.)  249. 


462  THREATENING    TO    MAKE    ASSIGNMENT.  §  342 

Jaques  v.  Greenwood^  constitutes  a  possible  exception 
to  the  rule  above  stated.  A  judgment  had  been  entered 
against  a  firm  by  default ;  they  secured  a  stay  of  proceed- 
ings upon  pretence  of  a  defense  to  the  action,  which  they 
failed  to  show,  and  upon  an  assurance  given  by  their  attor- 
nev  that  no  assio^nment  would  be  made.  Meanwhile  a 
preferential  assignment  was  filed,  and  the  judgment-cred- 
itors were  prevented  from  realizing  anything  upon  execu- 
tion. The  assignment  was,  upon  this  state  of  facts,  ad- 
judged to  be  made  to  hinder  and  delay  the  creditors  in  the 
collection  of  their  debt. 

§  342.  Threatening  to  make  assignment. — Threatening  to 
make  an  assignment  seems  to  constitute  no  ground  for  pro- 
visional relief  by  attachment  in  New  York,^  provided  the 
threat  is  not  to  make  a  fraudulent  assignment.  "An  un- 
lawful coercion  of  a  creditor,"  says  Fullerton,  J.,  "cannot 
be  predicated  of  the  declaration  of  an  intention  by  a  debtor 
to  do  what  the  law  sanctions  as  right  and  proper."^ 

'  12  Abb.  Pr.  (N.  Y.)  234.  they  were  insolvent,  and  proposed  to 
*  Kipling  V.  Corbin.  66  How.  Pr.  their  creditors  a  compromise  of  fifty 
(N.  Y.)  13;  Evans  V.  Warner,  21  Hun  cents  on  the  dollar,  payable  in  nine, 
(N.  Y.)  574 ;  Dickerson  v.  Benham,  20  twelve,  and  fifteen  months  without  se- 
How.  Pr.  (N.  Y.)  343.  curity.  The  evidence  tended  to  show 
^  Spaulding  v.  Strang,  37  N.  Y.  139.  that  they  had  been  engaged  in  a  pros- 
In  the  case  of  National  Park  Bank  v.  perous  business,  yielding  them  large 
Whitmore,  104  N.  Y.  305,  Earl,  J.,  said  :  profits,  and  they  gave  no  satisfactory 
"  But  we  think  there  were  sufficient  or  intelligible  explanation  of  their  sud- 
facts  set  forth  in  the  affidavits  to  give  den  alleged  insolvency.  They  threat- 
the  court  jurisdiction  to  determine  ened  that  unless  their  offer  of  compro- 
whether  or  not  the  defendants  in  threat-  mise  was  accepted  they  would  make  an 
ening  to  make,  and  in  making  the  as-  assignment,  preferring  Whiting,  and 
signment,  were  actuated  by  a  fraudu-  that  then  the  rest  of  their  creditors 
lent  intent,  A  few  days  before  the  would  get  Httle  or  nothing.  The  efforts 
assignment  was  made  the  defendants  of  the  defendants,  with  the  co-opera- 
reported  that  they  were  entirely  solvent  tion  of  their  assignee  after  the  assign- 
and  could  pay  all  their  debts  in  full,  ment,  apparently  to  coerce  a  compro- 
and  they  made  a  statement  of  their  mise  at  twenty-five  cents  on  the  dollar, 
affairs  showing  a  large  surplus  of  assets  their  offer  '  to  fix  it  up  '  with  a  creditor 
over  liabilities.  Soon  after  these  repre-  afterward  if  he  would  assent  to  the 
sentations  they  claimed  that  they  could  compromise,  their  selection  of  a  foreign 
not  pay  their  debts   in  full,  and  that  assignee,  the  relations  between  him  and 


§  343  CONSTRUCTION    OF   ASSIGNMENTS.  463 

On  the  other  hand  there  are  cases  tending  to  support  the 
view  that  a  debtor  cannot  use  the  power  he  possesses  of 
assigning  his  property  preferentially  to  intimidate  creditors 
into  abstaining  from  pressing  the  remedies  allowed  by  law 
to  collect  debts,  without  being  chargeable  with  intent  to 
defraud  creditors.^  In  Gasherie  v.  Apple ^  the  court  ob- 
served: "The  law  allows  a  debtor  to  assign  his  property 
to  pay  his  debts,  and  even  to  make  preferences ;  but  com- 
pels him  to  make  his  selection  without  any  conditions  for 
personal  gain  to  himself  ;  thus  he  cannot,  by  an  assignment, 
hold  out  a  hope  of  an  extra  share  of  his  assets,  or  a  fear  of 
loss  of  any  participation  therein,  as  a  means  to  induce  a 
creditor  to  abandon  all,  or  any  part  of  his  claim,  or  to  for- 
bear pursuing  his  legal  remedies  therefor."  This  certainly 
embodies  the  safer  rule. 

§  343.  Construction  of  assignments. — In  construing  the 
provisions  of  a  general  assignment,  we  are  to  be  governed 
by  the  rules  applicable  to  ordinary  conveyances.^  Prefer- 
ential assignments  are  not  to  be  encouraged.*  The  law 
tolerates  rather  than  approves  such  instruments,  and  they 
can  only  be  supported  when  they  make  a  full  and  uncondi- 
tional surrender  of  the  property  to  the  payment  of  debts.^ 
In  Read  v.  Worthington,^  in  construing  a  general  assign- 


them,  and  the  secret  promise  of  a  fu-  Pr.  (N.  Y.)  64;   Livermore  v.  Rhodes, 
ture  preference,  are  also  pertinent  facts.  27  How.  Pr.  (N,  Y.)  506. 
The  court  at  General  Term,  looking  at  M4  Abb.  Pr.  (N.  Y.)  64.,  68, 
no  one  fact,  but  at  all  the  facts,  before  •*  Townsend  v.  Stearns,  32  N.  Y.  213  ; 
and  after   the   assignment,  could,   we  Bagley  v.  Bowe,  105  N.  Y.  171  ;  Knapp 
think,  find   that   the   assignment  was  v.   INIcGowan,  96  N.  Y.  75  ;   Crook  v. 
threatened  and  made  by  the  assignors,  Rindskopf,  105  N.  Y.  485  ;   Ginther  v. 
not  solely  for  the  honest  purpose  of  de-  Richmond,  18  Hun  (N.  Y.)  234.    Corn- 
voting  their  assets  to  the  payment  of.  pare  Rapalee  v.  Stewart,  27  N.  Y.  315, 
their  just  debts,  but,  while  not  actually  ■•  Nichols  v.  McKwen,  17  N.  Y.   24. 
insolvent,  to  coerce  a  favorable  compro-  See  Boardman  v.   Hallid;iy,    10  Paige 
mise  from  their  creditors,  and  thus  se-  (N.  Y.)  230. 
cure  a  benefit  to  themselves."  ^  Griffin  v.  Barney,  2  N.  Y.  371. 

'  See  Anthony  v.  Stype,  19  Hun  (N.  *  9  Bosw.  (N.  Y.)  626.     In  Crook  v. 

Y.)  267  ;  Gasherie  v.  Apple,  14  Abb.  Rindskopf,  105  N.  Y.  485,  Ruger,  Ch. 


464 


CONSTRUCTION    OF    ASSIGNMENTS. 


§   343 


merit,  the  court  said:  "There  are  three  general  rules  of 
interpretation,  which,  applied  to  this  case,  show  that  the 
intent  on  the  face  of  the  instrument  was  honest  to  cred- 
itors :  Firstly,  that  the  general  intent  of  the  parties  is  to 
govern  ;  secondly,  that  the  leaning  of  all  constructions 
should  be  in  favor  of  supporting,  and  not  overthrowing,  an 
instrument ;  and  thirdly,  that  fraud  is  not  to  be  presumed,^ 
and  assignments  are  subject  to  no  different  rules."  ^  Courts 
are  therefore  under  no  obligation  to  be  astute  to  destroy 
them,^  and  an  unreasonable  construction  should  not  he 
given  to  the  language  used  in  the  assignment  to  render  it 
void.^    The  scope  of  the  assignment  is  to  be  gathered  from 


J.,  said:  "While  heretofore  there  has 
been  some  diversity  of  opinion  in  the 
courts  in  respect  to  the  proper  rule  to 
be  applied  in  the  construction  of  such 
instruments,  we  think  the  tendency  of 
modem  decisions,  especially  those  of 
most  approved  authority,  has  been  to 
adopt  the  same  rules  which  obtain  in 
the  interpretation  of  other  contracts. 
(Knapp  V.  McGowan,  96  N.  Y.  75,  87  ; 
Rapalee  v.  Stewart,  27  N.  Y.  310,  315 ; 
Benedict  v.  Huntington,  32  N.  Y.  219; 
Townsend  v.  Stearns,  32  N.  Y.  209.) 
Among  those  rules  is  that  requiring 
such  an  interpretation  as  will  render 
the  instrument  consistent  with  inno- 
cence, and  the  general  rules  of  law,  in 
preference  to  such  as  would  impute  a 
fraudulent  intent  to  the  assignor,  or 
defeat  the  general  purpose  and  intent 
of  the  conveyance.  (Bagley  v.  Bowe, 
105  N.  Y.  171  ;  Ginther  v.  Richmond, 
18  Hun  [N.  Y.]  232,  234;  Rapalee  v, 
Stewart,  27  N.  Y.  315;  Benedict  v. 
Huntington.  32  N.  Y.  219;  Townsend 
V.  Stearns,  32  N.  Y.  209.)  Such  trans- 
fers are  sanctioned  by  law  and  are, 
when  made,  like  other  contracts,  to  be 
fairly  and  reasonably  construed  with  a 
view  of  carrying  out  the  intentions  of 
the  parties  making  them.     When  au- 


thority to  do  an  act  is  conferred  in 
general  terms  it  will  be  deemed  to  be 
and  to  have  been  intended  to  be  exer- 
cised within  the  limits  prescribed  by 
law,  (Kellogg  v.  Slauson,  1 1  N.  Y.  302.) 
In  such  cases,  as  in  others,  doubtful 
and  ambiguous  phrases  admitting  of 
different  meanings,  are,  in  accordance 
with  the  maxim,  '  ut  res  magis  valeat 
qiiam  pe.rcat,'  to  be  so  construed  as  to 
authorize  a  lawful  disposition  of  the 
property  only,  although  there  may  be 
general  language  in  the  instrument  sus- 
ceptible of  a  different  construction. 
(Townsend  v.  Steams,  32  N.  Y.  209.)" 

'  Citing  Kellogg  v.  Slauson,  1 5  Barb. 
(N.  Y.)  56 ;  Kellogg  v.  Barber,  14 
Barb.  (N.  Y.)  11;  Bamum  v.  Hemp- 
stead, 7  Paige  (N,  Y.)  569;  Kuhlman 
v.  Orser,  5  Duer  (N.  Y.)  250 ;  Bank  of 
Silver  Creek  v.  Talcott,  22  Barb.  (N.Y.) 
561.     See  §§  5,  6. 

-  Citing  Pine  v,  Rikert,  21  Barb, 
(N.  Y.)  469. 

^  See  Turner  v.  Jaycox,  40  Barb. 
(N.  Y.)  164 ;  affi'd,  40  N.  Y.  470.  Es- 
pecially Townsend  v.  Stearns,  32  N.  Y. 
209 ;  Grover  v.  Wakeman,  1 1  Wend. 
(N.  Y.)  193;  Kellogg  v.  Slauson,  11 
N.  Y.  302. 

•*  Whipple  V.  Pope,  33  111.  334. 


«5  344  OBNOXIOUS  PROVISIONS.  465 

the  whole  instrument,^  and  where  two  constructions  are 
possible,  that  is  to  be  chosen  which  upholds  and  does  not 
destroy  the  instrument.^  "A  court,"  said  Finch,  J.,  "may 
wrestle,  if  need  be,  with  unwilling  words  to  find  the  truth 
or  preserv^e  a  right  which  is  endangered."^  It  must  be  re- 
membered that  if  a  general  clause  be  followed  by  special 
words  which  accord  with  the  general  clause,  the  deed 
should  be  construed  according  to  the  special  matter.'*  The 
case  may,  however,  be  taken  out  of  its  operation  by  the 
evident  intent  of  the  parties  and  the  clearly  expressed  pur- 
pose of  the  deed.^  Thus  where  the  instrument  under  con- 
sideration is  a  general  assignment  of  all  the  property  and 
effects  of  the  assignor,  and  the  intent  to  place  all  the  prop- 
erty of  every  description  within  the  trust  is  apparent  in 
every  part  of  the  deed,  although  it  contain  a  reference  to  a 
schedule  of  the  assigned  effects  as  annexed,  this  will  not  be 
construed  as  indicating  an  intention  to  qualify  or  limit  the 
comprehensive  or  general  language,  and  property  not  men- 
tioned in  the  schedule  will  pass  to  the  trustee.^ 

§  344.  Explaining  obnoxious  provisions. — When  it  is  shown 
that  the  obnoxious  provisions  of  the  deed  were  not  made 
deliberately,  understandingly,  or  even  knowingly,  then  the 
law's  presumption  of  the  intent  to  defraud  is  rebutted. 
The  reason  ceasing  the  rule  ceases.  In  an  inquiry  collat- 
eral to  the  deed  it  is  competent  to  show  by  parol  that  the 
deed  w^as  made  in  its  objectionable  form  by  the  mistake  of 


'  Price  V.  Haynes,  37  Mich.  487;  S.C.  construed.     Wliite  v.  Cotzhausen,  129 

I  Am.  Insolv.  Rep.  137.  U.  S.  329,  and  cases  cited. 

^  Coyne   v.   Weaver,  84  N.  Y.  390.  ••  Munro  v.  Alaire,  2  Caines  (N.  Y.) 

See  Townsend  v.  Stearns,  32  N.  Y.  209  ;  320.    See  Moore  v.  Griffin.  22  Me.  350  ; 

Brainerd  v.   Dunning,  30   N.  Y.  211;  Wilkes    v.    Ferris,    5    Johns.    (N.    Y.) 

Campbell  v.  Woodworth,  24  N.  Y.  304;  335. 

Benedict  v.  Huntington,  32  N.  Y.  219  ;  '  Piatt  v.  Lott,  17  N.  Y.  478. 

Coffin  V.  Douglass,  61  Tex.  406.  "  Holmes  v.  Hubbard,  60  N.  Y.  185  ; 

3  Coyne  v.  Weaver,  84  N.  Y.  390;  Turner  v.  Jaycox,  40  N.  Y.  470;   Emi- 

S.  c.  I  Am.  Insolv.  Rep.  392.    A  volun-  grant  Ind.  Sav.  Bank  v.  Roche,  93  N. 

tary  assignment  act  is  to  be  liberally  Y.  377. 
30 


466  ASSIGNMENTS    HELD    VOID.  §  345 

the  scrivener,  and  without  the  intention  and  knowledge  of 
the  parties  to  it,  and  so  to  rebut  the  presumption  of  fraud. ^ 

§  345.  Assignments  held  void. — It  would  be  an  arduous 
task  to  collate  and  cite  the  numerous  cases  in  which  assign- 
ments have  been  overturned  at  the  instigation  of  creditors. 
The  important  features  of  the  law  will,  however,  be  no- 
ticed. The  instrument  was  avoided  where  it  provided  that 
the  debtor  "shall  have  the  privilege  of  continuing  his  busi- 
ness for  one  year."^  In  fact  any  reservation  of  benefit  to 
the  grantor  is  considered  fatal. ^  Stipulating  for  possession 
of  the  assigned  property,"*  and  providing  for  the  payment 
of  individual  debts  out  of  copartnership  assets,^  are  addi- 
tional illustrations  of  obnoxious  provisions  which  will  annul 
the  instrument.''  So,  as  we  have  seen,  the  instrument  is 
rendered  void  by  intentional  omissions  of  assets,^  and  the 
insertion  of  fictitious  Habilities.^  The  insertion  of  a  pro- 
■  vision  for  the  employment  of  the  assignors  furnishes  some 
evidence  of  fraudulent  intent.^ 


■'  Farrow  v.  Hayes,  51  Md.  500,  501.  v.  Hunter,  11  Weekly  Dig.  (N.  Y.)  300. 

See  Carpenter  v.  Buller,  8  M.  &  W.  But  see  Crook  v.  Rindskopf,  105  N.  Y. 

212;  Parks  V.  Parks,  19  Md.  323;  Smith  476. 

V.  Davis,  49  Md.  470.  *  An  assignment  is  invalid  as  a  con- 

■•^  Holmes  v.  Marshall,  78  N.  C.  262.  veyance  of  a  debtor's  estate  under  the 

2  Cheatham  v.  Hawkins,  76  N.  C.  insolvency  statutes  of  New  York  (2  R. 
335  ;  Bigelow  v.  Stringer,  40  Mo.  195  ;  S.,  p.  16),  when  the  preliminary  pro- 
Griffin  V.  Barney,  2  N.  Y.  371  ;  Leitch  ceedings  upon  which  it  is  based  are 
V.  Hollister,  4  N.  Y.  211  ;  Mackie  v.  void.  Rockwell  v.  McGovern,  69  N. 
Cairns,  5  Cow.  (N.  Y.)  547 ;  Harris  v.  Y.  294  ;  s.  C.  i  Am.  Insolv.  Rep.  59. 
Sumner,  2  Pick.  (Mass.)  129;  Burrill  See  Ely  v.  Cooke,  28  N.  Y.  365.  But 
on  Assignments,  4th  ed.,  §  343,  p.  514.  compare  Striker  v.  Mott,  28  N.  Y.  90. 

■*  Billingsley  v.  Bunce,  28  Mo.  547;  In  such  a  case  the  only  beneficial  in- 

Reed  v.  Pelletier,  28  Mo.  173;  Brooks  terest  vested    in  the  assignee  is  that 

V.    Wimer,    20   Mo.    503  ;    Stanley    v.  prescribed  by  the  statute. 

Bunce,  27  Mo.  269.     See  Cheatham  v.  '  Probst   v.  Welden,  46   Ark.  409  ; 

Hawkins,  76  N.  C.  335  ;    Harman  v.  ShuUz   v.    Hoagland,    85    N.   Y.  464 ; 

Hoskins,  56  Miss.  142;  Joseph  v.  Levi,  Waverly  Nat.  Bank  v.  Halsey,  57  Barb. 

58  Miss.  843.  (N.Y.)  249  ;  Craft  v.  Bloom,  59  Miss  69. 

5  Wilson  V.  Robertson,  21  N.  Y.  587  ;  '  Talcott  v.   Hess,  31   Hun  (N.  Y.) 

Schiele  v.  Healy,  61  How.  Pr.  (N.  Y.)  282. 

73 ;  S.  C.  I  Am,  Insolv.  Rep.  417  ;  Piatt  '  Frank  v.  Robinson,  96  N.  C.  32. 


§§  34^,   34^^  FOREIGN    ASSIGNMENTS.  467 

§  346.  Foreign  assignments. — The  rule  generally  obtains 
that  the  statute  laws  of  a  particular  State  regulating  assign- 
ments for  the  benefit  of  creditors,  do  not  apply  to  foreign 
assignments ;  ^  such  transfers,  if  valid  by  the  law  of  the 
place  where  made,  are  valid  everywhere,  and  will  protect 
the  property  from  attachment,'^  except  perhaps  as  regards 
creditors  who  are  residents  of  the  particular  State  in  which 
it  is  sought  to  enforce  the  provisions  of  the  instrument. 
As  the  foreign  assignment  is  allowed  to  operate  as  a  matter 
of  comity,  the  courts  sometimes  refuse  to  enforce  it  to  the 
prejudice  of  their  own  citizens.^  Manifestly  an  assignment 
will  not  take  effect  to  pass  title  to  personal  property  situate 
in  another  State  in  express  contravention  of  the  statute 
law  of  that  State.^  The  distinction  should  not  be  over- 
looked between  assignments  by  act  of  the  party  and  those 
by  operation  of  law.  The  latter  class  of  conveyances  are 
generally  founded  upon  statutory  provisions,  and  have  no 
extraterritorial  force.^  This,  however,  is  a  line  of  mquiry 
foreign  to  our  subject. 

§  34613:.  Assignments  by  corporations. — Where  charter  re- 
strictions or  statutory  inhibitions  do  not  exist  a  corpora- 
tion may  make  a  general  assignment. "     Such  a  transfer  is, 

'  Ockemian  v.  Cross,  54  N,  Y.  29;  Barb.  Ch.  (N.  Y.)  124,  affi'd  3  N.  Y. 

Chafee  v.  Fourth  Nat.  Bank  of  N.  Y.,  238 ;  Haxtun  v.  Bishop,  3  Wend.  (N. 

71  Me.  524 ;  Bentley  v.  Whittennore,  19  Y.)  13  ;  Bowery  Bank  Case,  5  Abb.  Pr. 

N.  J.  Eq.  462.  (N.  Y.)  415  ;  Hill  v.  Reed,  16  Barb. 

-  Ockerman  v.  Cross,  54  N.  Y.  29;  (N.  Y.)  280;  De  Camp  v.  Alward,  52 

Bholen  v.  Cleveland,  5  Mason  174.  Ind.473;  Nelson  v.  Edwards,  40  Barb. 

^  Chafee   v.   Fourth    Nat.  Bank,  71  (N.  Y.)  279;  Union  Bank  of  Tenn.  v. 

Me.  524.     See  Matter  of  Waite,  99  N.  EUicott,  6  Gill  &  J.  (Md.)  363;  Sav- 

Y,  433.     Compare  Train    v.  Kendall,  ings  Bank  of  New  Haven  v.  Bates,  8 

137  Mass.  366.  Conn.  505  ;  Coats  v.  Donnell,  -74  N.  Y. 

^  Warner  v.  Jaffray,  96  N.  Y.  248.  178  ;  Chew  v.  Ellingwood,  86  Mo.  273  ; 

'  See  Hutcheson  v.  Peshine,  16  N.  J.  Lenox  v.  Roberts,  2  Wheat.  373  ;  War- 

Eq.  167;  Kelly  v.  Crapo,  45  N.  Y.  86;  ner  v.  Mower,   11   \'t.  385  ;    Flint   v. 

reversed,  Crapo  v.  Kelly,  16  Wall.  610.  Clinton  Co.,  12  N.  H.  431  ;   Ex  parte 

See  §  294.  Conway,  4  Ark.  304 ;   Catlin  v.  Eagle 

«  Albany  &  R.  Iron  &  S.  Co.  v.  South-  Bank,  6  Conn.  233  ;    Ardesco  Oil  Co. 

em  Agricultural  Works,  76  Ga.  135;  v.  North  Am.  Oil  &  M.  Co.,  66  Pa. 

De  -Ruyter    v.    St.   Peter's   Church,   3  St.  375. 


468  ASSIGNMENTS    BY    CORPORATIONS.  §   346^ 

however,  prohibited  by  statute  in  New  York,^  and  some 
other  States.^  Where  assignments  by  corporations  are 
allowed  they  are  subject  to  attack  "  upon  substantially 
the  same  grounds  as  in  the  cases  of  similar  transfers  by 
individuals." 

'  I  R.  S.  605,  §  I.  -  See    Wait    on    Insolvent    Corps., 

Chap.  VIII. 


CHAPTER    XXII. 


FRAUDULENT    CHATTEL    MORTGAGES. 


§  347.  Chattel  mortgages. 

■  C  Rule  in  Robinson  v.  Elliott. 
349-  S 

350.  Proof  extrinsic  to  the  instrument. 

351,  Comments  in  the  cases. 

•JC2,  ) 

'  >  Opposing  rule  and  cases. 

354,  Discussion  of  the   principle   in- 
volved. 


§  355.  Authorizing  sales  for  mortgagee's 
benefit. 

356.  Sales  upon  credit. 

357.  Possession  —  Independent  valid 

transactions. 

358.  Right  of  revocation — Reserva- 

tions. 

359.  Rule   as   to   consumable   prop- 

erty. 


§  347.  Chattel  mortgages. — Questions  affecting  the  valid- 
ity of  chattel  mortgages  as  against  creditors  are  so  largely- 
dependent  upon  and  regulated  by  local  statutory  pro- 
visions, that  the  general  principles  governing  the  subject 
can  be  discussed  with  but  little  satisfaction.  Such  mort- 
gages are,  as  a  general  rule,  valid  between  the  parties,^  even 


'  Stewart   v.    Piatt,    loi  U.  S.  731 ; 
Hackett  v.  Manlove,   14  Cal.  85.     See 
Lane  v.   Lutz,  i   Keyes  (N.  Y.)   213  ; 
Smith  v.  Acker,  23  Wend.  (N.  Y.)  653. 
See  Chap.  XXVI.     In  Stewart  v.  Piatt, 
loi   U.   S.   739,  the  court  said  :  "  Al- 
though the  chattel  mortgages,  by  rea- 
son of  the  failure  to  file  them  in  the 
proper  place,  were  void  as  against  judg- 
ment-creditors, they  were  valid  and  ef- 
fective as  between  the  mortgagors  and 
the  mortgagee.     Lane  v.  Lutz,  i  Keyes 
(N.  Y.)  213  ;  Wescott  v.  Gunn,  4  Duer 
(N.  Y.)  107  ;  Smith  v.  Acker,  23  Wend. 
(N.  Y.)  653.     Suppose  the  mortgagors 
had  not  been  adjurlged  bankrupts,  and 
there  had  been  no  creditors,  subsequent 
purchasers,  or  mortgagees  in  good  faith 
to  complain,  as  they  alone  might,  of  the 
failure  to  file  the  mortgages  in  the  towns 
where  the  mortgagors  respectively  re- 


sided. It  cannot  be  doubted  that  Stew- 
art, in  that  event,  could  have  enforced 
a  lien  upon  the  mortgaged  property  in 
satisfaction  of  his  clami  for  rent.  The 
assignee  took  the  property  subject  to 
such  equities,  liens,  or  incumbrances  as 
would  have  affected  it,  had-no  adjudica- 
tion in  bankruptcy  been  made.  While 
the  rights  of  creditors  whose  executions 
preceded  the  bankruptcy  were  properly 
adjudged  to  be  superior  to  any  which 
passed  to  the  assignee  by  operation  of 
law,  the  balance  of  the  fund,  after  satis- 
fying those  executions,  belonged  to  the 
mortgagee,  and  not  to  the  assignee  for 
the  purposes  of  his  trust.  The  latter 
representing  general  creditors,,  cannot 
dispute  such  claim,  since,  had  there 
been  no  adjudication,  it  could  not  have 
been  disputed  by  the  mortgagors."  See 
Hauselt  v.  Harrison,  105  U.  S..406. 


470  ROBINSON    V.    ELLIOTT.  '^N  348 

though  not  recorded ;  ^  and  recording  the  instrument  is 
made  by  statute  in  some  States  a  substitute  for  change  of 
possession,  and  repels  the  imputation  of  fraud  which  would 
arise  from  the  retention  of  possession  by  the  vendor.^ 
Many  questions  concerning  the  validity  of  these  instru- 
ments are  to  be  found  in  the  reports,  only  the  more  prom- 
inent of  which  w^ill  be  noticed. 

§  348.  Rule  in  Robinson  v.  Elliott. — The  Supreme  Court 
of  the  United  States,  in  Robinson  v.  Elliott,^  committed 
itself  unreservedly  to  the  doctrine  that  an  instrument  which 
provided  for  the  retention  of  the  possession  of  the  mort- 
gaged personalty  by  the  mortgagor,  accompanied  with  the 
power  to  dispose  of  it  for  his  own  benefit  in  the  usual 
course  of  trade,  was  inconsistent  with  the  idea  of  a  security, 
or  the  nature  and  character  of  a  mortgage,  and  of  itself 
furnished  a  pretty  effectual  shield  to  a  dishonest  debtor, 
and  consequently  should  be  regarded  as  voidable  as  to  cred- 
itors."*    Davis,  J.,  said  :  "  In  truth,  the  mortgage,  if  it  can 


'Stewart  v.  Piatt,  loi   U.   S.   731;  Minn.    533;    Horton   v.   Williams,  21 

Lane  v.  Lutz,  i  Keyes  (N.  Y.)  213.  Minn.  187  ;  Bishop  v.  Warner,  19  Conn. 

*  See  Bullock  v.  Williams,  16  Pick.  460;  Place  v.  Langworthy,  13  Wis. 
(Mass.)  33 ;  Feurt  v,  Rowell,  62  Mo,  629 ;  Blakeslee  v.  Rossman,  43  Wis. 
524;  Hughes  V.  Cory,  20  Iowa  403,  116;  Smith  v.  Ely,  10  N.  B.  R.  553; 
and  cases  cited  ;  Spraights  v.  Hawley,  In  re  Cantrell,  6  Ben.  482 ;  hi  re 
39  N,  Y.  441.  Kahley,  2  Biss.  383  ;  Southard  v.  Ben- 

*  22  Wall.  513.  ner,  72  N.  Y.  424;  £'.r/rtr/^  Games, 
■*  See  Worseley  v.  De  Mattos,  i  Burr.  12  Ch.  D.  314  ;  Cheatham  v.  Hawkins, 

467,  per  Lord  Mansfield;  Edwards  v.  80  N.  C.  164;  Tennessee  Nat.  Bank  v. 

Harben,  2  T.  R.  587  ;  Bannon  v.  Bow-  Ebbert,  9  Heisk.  (Tenn.)  154;   Joseph 

ler,  34  Minn.  418  ;  Paget  v.  Perchard,  v.  Levi,  58  Miss.  845  ;  Harman  v.  Hos- 

I  Esp.  205,  per  Lord  Kenyon  ;  Lang  v.  kins,  56  Miss.  142  ;  Dunning  v.  Mead, 

Lee,  3  Rand.  (Va.)  410;   Addington  v.  90  III.  379;   Goodheart  v.  Johnson,  88 

Etheridge,   12  Gratt.  (Va.)  436  ;  Mc-  111.  58;  Davenport  v.  Foulke,  68  Ind. 

Lachlan  v.  Wright,  3  Wend.  (N.  Y.)  382;    Barnet  v,    Fergus,    51    111.   352; 

348;   Edgell   V.    Hart,    9  N.  Y.    213;  Davis  v.  Ransom,  18  111.  396  ;  Simmons 

Brackett  v.  Harvey,  91  N.  Y.  214  ;  Potts  v.  Jenkins,  76  111.  479  ;  Mobley  v.  Letts, 

V.Hart,  99  N.Y.  168  ;  Cobum  v.  Picker-  61   Ind.  11  ;  Garden  v.  Bodvving,  9  W. 

ing,  3N.  H.  415;  Bank  of  Leavenworth  Va.  122;   City  Nat.  Bank  v.  Goodrich, 

V.  Hunt,  II   Wall.   391;    Coolidge   v.  3  Col.   139;  Sparks  v.  Mack,  31  Ark. 

Melvin,  42  N.  H.  520;  Collins  V.  Myers,  666;    Orton   v.    Orton,    7    Oreg.  478  ; 

16  Otio  547;  Chophard  v.  Bayard,  4  Peiser  v.  Peticolas,  50  Tex.  638 ;   Scott 


§  34^  ROBINSON    V.    ELLIOTT.  47 1 

be  so  called,  is  but  an  expression  of  confidence,  for  there 
can  be  no  real  security  where  there  is  no  certain  lien. 
Whatever  may  have  been  the  motive  which  actuated  the 
parties  to  this  instrument,  it  is  manifest  that  the  necessary 
result  of  what  they  did  do  was  to  allow  the  mortgagors, 
under  cover  of  the  mortgage,  to  sell  the  goods  as  their 
own,  and  appropriate  the  proceeds  to  their  own  purposes  ; 
and  this,  too,  for  an  indefinite  length  of  time." '  It  must 
be  remembered  that,  in  Twyne's  Case,  where  the  transfer 
was  avoided,  one  of  the  objections  urged  against  the  trans- 
action was  that  the  debtor  tised  the  goods  as  his  own.^  Mr. 
Pierce  observes  :  "A  mortgage  or  conveyance  of  this  kind 
presents  a  false  appearance,  is  only  a  pretence  as  a  mort- 
gage, is  calculated  to  deceive,  cannot  fail  to  deceive  if  it  be 
operative,  furnishes  unusual  facilities  for  fraud,  reserves 
benefits  to  the  grantor,  and  prejudices  other  creditors. 
When  it  thus  appears  that  the  transaction  is,  in  its  results, 
so  fraudulent,  and  so  injurious  to  creditors,  that  few  trans- 
actions could  be  more  so,  even  where  an  intent  to  defraud 
exists  so  as  to  bring  them  within  the  statute  of  13  Eliz., 
the  courts  are  as  ready  to  adjudge  the  transaction  fraudu- 
lent as  they  would  be  if  a  fraudulent  intent  appeared."^ 

V.  Alford,  53  Tex.  82  ;  Weber  v.  Arm-  work  entitled  "  Fraudulent  Mortgages 

strong,  70  Mo.  217;  Tallon  v.  Ellison,  of  Merchandise,  a  Commentary  on  the 

3  Neb.  63 ;    McCrasly  v.  Hasslock,  4  American  Phases  of  Twyne's  Case,  by 

Baxt.  (Tenn.)   i  ;    Catlin  v.  Currier,  i  James  O.   Pierce,"   F.    H.  Thomas  & 

Sawyer  7.     See  "  An  American  Phase  Co.,  1884.     The  positions  taken  by  Mr. 

of  Twyne's  Case,"  by  James  O.  Pierce,  Pierce  in  the  Law  Review,  in  support 

Esq.,  2  Southern  L.  Rev.  (N.  S.)  731  ;  of  Robinson  v.  Elliott,  are  re-stated  in 

"  Fraudulent  Mortgages  of  Merchan-  this  volume  with  commendable  clear- 

dise,"   by  Leonard   A.  Jones,  Esq.,  5  ness  and  force,  and  the  different   au- 

Southern    L.    Rev.    (N.    S.)  617;    "A  thorities  in  State  and  Federal  tribunals 

Reply,"  by  Mr.  Pierce,  6  Southern  L.  bearing  upon  the  question  are  collated 

Rev.  (N.  S.)  96;  "Frauds  in  Chattel  and  discussed. 

Mortgages,"  by  Mr.  Jones,  7  Southern  '  Robinson  v.  Elliott,  22  Wall.  525. 

L.  Rev.  (N.  S.)  95  ;   Reviewed  by  Ed.  See  Means  v.  Dowd,  128  U.  S.  284. 

J.  Maxwell,  Esq.,  7  Southern  L.  Rev.  '^  See  §  22. 

(N.    S.)    205.     This  discussion  relates  ^  Pierce  on  Fraudulent  Mortgages  of 

mainly  to  Robinson  v.  Elliott,  22  Wall,  Merchandise,  §  122. 
513.     The  controversy  gave  birth  to  a 


47-  ROBINSON    V.    ELLIOTT  §  349 

§  349.  —  In  Edgell  v.  Hart  ^  the  license  to  sell  was  inferred 
from  a  written  schedule  attached  to  the  instrument.  Chief- 
Justice  Denio  held,  \\^ith  the  concurrence  of  a  majority  of 
the  court,  that  "the  existence  of  such  a  provision  out  of 
the  mortgage  or  in  it,  would  invalidate  it  as  matter  of  law, 
and  that  where  the  facts  are  undisputed  this  court  should  so 
declare."^  "Such  an  agreement,"  said  Finch,  J.,  "opens 
the  door  to  fraud,  and  permits  the  mortgagor  to  use  the 
property  for  his  own  benefit,  utilizing  the  mortgage  as  a 
shield  against  other  creditors."^  The  debtor,  in  the  lan- 
guage of  Kent,  "  sports  with  the  property  as  his  own."^  In 
Mittnacht  v.  Kelly,^  Parker,  J.,  observed:  "The  mortgag- 
ing the  whole  stock  in  trade,  ....  with  the  increase  and 
decrease  thereof,  and  the  providing  for  the  continued  pos- 
session of  the  mortgagor,  can  have  no  other  meaning  than 
that  the  mortgagee  should  all  the  time  retain  a  lien  on  the 
whole  stock  by  way  of  mortgage,  the  mortgagor  making 
purchases  from  time  to  time,  and  selling  off  in  the  ordinary 
manner,  the  intent  being  not  to  create  an  absolute  lien 
upon  any  property,  but  a  fluctuating  one,  which  should 
op^n  to  release  that  which  should  be  sold  and  take  in  what 
should  be  newly  purchased.  This  is  just  such  an  arrange- 
ment as  was  held  in  Edgell  v.  Hart^  to  render  the  mort- 
gage void.  The  case  cannot  be  distinguished  from  that, 
and  the  law  as  pronounced  in  that  case,  must  be  held  ap- 
plicable to  this."  In  Griswold  v.  Sheldon,'^  Bronson,  C.  J., 
says:  "There  would  be  no  hope  of  maintaining  honesty  and 
fair  dealing  if  the  courts  should  allow  a  mortgagee  or  vendee 
to  succeed  in  a  claim  to  personal  property  against  creditors 


1  9  N,  Y.  213.  •»  Riggs  V.  Murray,  2  Johns.  Ch.  (N. 

^  Compare  Gardner  v.  McEwen,  19  Y.)  565. 

N.  Y.  123;  Mittnacht  v.  Kelly,  3  Keyes  '  3  Keyes  (N.  Y.)  407. 

(N.  Y.)  407  ;    Russell  v.  Winne,  37  N.  ^9  N.  Y.  213. 

Y.  591.  ''4  N.  Y.  590. 

*  Brackett  v.   Harvey,  91  N.  Y.  223, 
224. 


§  35°  EXTRINSIC    PROOF.  473 

and  purchasers,  after  he  had  not  only  left  the  propert}^  in 
the  possession  of  the  debtor,  but  had  allowed  him  to  deal 
with  and  dispose  of  it  as  his  own."  "To  attempt,"  says 
Mr.  Pierce,^  "to  fasten  a  valid  and  certain  lien  upon  goods 
which  may  at  any  moment,  at  the  will  of  the  debtor,  fly 
out  from  under  the  lien,  is  to  attempt  a  legal  and  moral 
impossibility."  It  is  a  sham,  a  nullity — a  mere  shadow  of  a 
mortgage,  only  calculated  to  ward  off  other  creditors — a 
conveyance  in  trust  for  the  benefit  of  the  person  making  it, 
and  therefore  void  as  against  creditors.^ 

§  350.  Proof  extrinsic  to  the  instrument. — The  rule  as  we 
have  seen  is  the  same,  whether  the  agreement  is  recited  in 
the  instrument  or  is  extrinsic  to  it.^  Thus  Allen,  J.,  re- 
marked :  "  Whether  the  agreement  is  in  or  out  of  the  mort- 
gage, whether  verbal  or  in  writing,  can  make  no  difference 
in  principle.  Its  effect  as  characterizing  the  transaction 
would  be  the  same.  The  difference  in  the  modes  of  prov- 
ing the  agreement  cannot  take  the  sting  out  of  the  fact  and 
render  it  harmless.  If  it  is  satisfactorily  established,  the 
result  upon  the  security  must  be  the  same."'*  When  not 
embodied  in  the  instrument  the  agreement  to  sell  must  be 
proved.  The  mere  expectation  of  one  party  or  the  other 
that  this  right  is  to  be  given  is  not  enough ;  there  must  be 
a  conscious  assent  of  both.^  In  Potts  \^  Hart,^  Earl,  J., 
said  :  "A  mortgage  thus  given  is  fraudulent  and  void  as  to 
creditors  because  it  must  be  presumed  that  at  least  one  of 
the  purposes,  if  not  the  main  purpose  for  giving  it,  was  to 
cover  up  the  mortgagor's  property  and  thus  hinder  and  de- 
lay his  other  creditors.      It  matters  not  whether  the  agree- 


'  Pierce  on  Fraudulent  Mortgages  of  Ben.  482  ;  Smith  v.  Ely,  10  N.  B.  R. 

Merchandise,  §  125.  553;  Re  Kirkbride,  5  Dill.  116. 

*  Catlin  V.  Currier,  i  Sawyer  12.  ■*  Southard  v.  Benncr,  72  N.  V.  432  ; 

^  Edgell  V.  Hart,  9  N.  Y.  213;  Mc-  S.    P.    Russell    v.    Winnc,     37    N.    Y. 

Lean  v.  Lafayette  Bank,  3  McLean  623  ;  591. 

Bowen   v.  Clark,  i   Biss.   128;   In  re  '  Brackett  v.  Harvey,  91  N.  Y.  224. 

Kahley,  2  Biss.  383  ;  In  re  Cantrell,  6  *  99  N.  Y.  172. 


474  COMMENTS    IN    THE    CASES.  §   35 1 

ment  that  the  mortgagor  may  continue  to  deal  in  the  prop- 
erty for  his  own  benefit  is  contained  in  the  mortgage  or 
exists  in  parol  outside  of  it ;  and  where  the  agreement  ex- 
ists in  parol,  it  matters  not  whether  it  is  valid  so  that  it 
can  be  enforced  between  the  parties  or  not ;  for  whether 
•  valid  or  invalid  it  is  equally  effectual  to  show  the  fraudulent 
purpose  for  which  the  mortgage  was  given,  and  the  fraud- 
ulent intent  which  characterizes  it.  It  is  always  open  to 
creditors  to  assail,  by  parol  evidence,  a  mortgage  or  a  bill  of 
sale  of  property  as  fraudulent  and  void  as  to  them.  While 
between  the  parties  the  written  contract  may  be  valid,  and 
the  outside  parol  agreement  may  not  be  shown  or  enforced, 
yet  it  may  be  shown  by  creditors  for  the  purpose  of  prov- 
ing the  fraudulent  intent  which  accompanied  and  character- 
ized the  giving  of  the  written  instrument.  It  is  usually 
difficult  to  prove  by  parol  an  agreement  in  terms  that  the 
mortgagor  may  continue  to  deal  in  the  property  for  his 
own  benefit.  Parties  concoctinor  a  fraudulent  mortPfage 
would  not  be  apt  to  put  the  transaction  in  that  unequivocal 
form.  But  all  the  facts  and  circumstances  surrounding  the 
giving  of  the  mortgage,  and  the  subsequent  dealing  in  the 
property  with  the  knowledge  and  assent  of  the  mortgagee, 
may  be  shown,  and  they  may  be  sufficient  to  justify  the 
court  or  jury  in  inferring  the  agreement ;  and  so  the  parol 
agreement  was  inferred  in  all  the  cases  which  have  come 
under  our  observation." 

§  351.  Comments  in  the  cases. — Chief-Justice  Parker,  in 
speaking  of  these  shifting  liens,  observes  that  "  if  this  doc- 
trine were  admitted,  a  mortgage  of  personal  property  would 
be  like  a  kaleidoscope,  in  that  the  forms  represented  would 
change  at  every  turn  ;  but,  unlike  that  instrument,  in  that 
the  materials  would  not  remain  the  same."  ^  The  objection 
may  be  re-stated,  to  the  effect  that  the  mortgagor  may  dis- 


'  Ranlett  v.  Blodgett,  17  N.  H.  305. 


§352  OPPOSING    RULE    AND    CASES.  4/5 

pose  of  the  property,  defeat  the  mortgage,  and  put  the 
money  in  his  own  pocket ;  but  if  he  refuses  to  pay  a  debt, 
and  creditors  seize  the  property  in  execution  against  his 
will,  the  mortgage  steps  in  and  restores  it  to  the  debtor.^ 
Again,  it  is  said  that  there  is  no  specific  lien,  but  "  a  float- 
ing mortgage,  which  attaches,  swells,  and  contracts,  as  the 
stock  in  trade  changes,  increases,  and  diminishes  ;  or  may 
wholly  expire  by  entire  sale  and  disposition,  at  the  will  of 
the  mortgagor."-  Such  stipulations  are  not  only  inconsist- 
ent with  the  idea  of  a  mortgage,  but  tend  inevitably  to  give 
a  fraudulent  advantage  to  the  debtor  over  his  other  cred- 
itors.^ 

§  352.  Opposing  rule  and  cases. — The  rule  embodied  in 
Robinson  v.  Elliott"  has,  however,  been  a  subject  of  much 
discussion  and  dissension.  It  seems  to  be  conceded  in  the 
great  mass  of  the  cases,  that  an  agreement  for  the  retention 
of  possession,  with  power  of  disposition  by  the  mortgagor, 
may  constitute  evidence  of  fraud,  proper  to  be  considered 
by  the  jury  or  the  court,  as  a  fact  in  connection  with  all 
the  circumstances  arising  in  each  particular  case.  The 
contention  against  the  rule  in  Robinson  v.  Elliott  is  that 
the  agreement  does  not  render  the  instrument  void  per  se, 
or  as  matter  of  law,  or  conclusively  fraudulent,  and  that 
whether  it  is  fraudulent  m  fact  or  not,  should  be  "  decided 
upon  all  the  evidence,  including,  of  course,  the  terms  of 
the  instrument  itself."  ° 


'  Collins  V.  Myers,  16  Ohio  547.  Powers,  131  Mass.  333;  Briggs  v.  Park- 

"  Collins  V.  Myers,  16  Ohio  554.  man,   2    Met.   (Mass.)   25S  ;    Jones   v. 

'^  Tennessee  Nat.  Bank  v.  Ebbert,  9  Huggeford,  3  Met.  (Mass.)  515  ;  Hunter 

Heisk.  (Tenn.)  153.  v.  Corbett,  7  U.  C.  Q.  B.  75:  Miller 

••  22  Wall.  513.     See  Means  v.  Dowd,  ads.  Pancoast,  29  N.  J.  Law  250 ;  Price 

128  U.  S.  284.  V.  Mazange,  31  Ala.  701  ;   Sleeper  v. 

^  Hughes  V.  Cory,  20  Iowa  399-410,  Chapman,  121  Mass.  404;  People  v. 
per  Dillon,  J. ;  Brett  v.  Carter,  2  Low-  Bristol,  35  Mich.  28  ;  VVingler  v.  Sib- 
ell  458;  Gay  V.  Bidwell,  7  Mich.  519;  ley,  35  Mich.  231  ;  Hedman  v.  Ander- 
Googins  V.  Gilmore,  47  Me.  9;  Clark  son,  6  Neb.  392;  Cheatham  v.  Haw- 
V.   Hyman,   55   Iowa   14;   Fletcher   v.  kins,  76  N.  C.  335  ;  Mitchell  v.  Winslow, 


476  OPPOSING    RULE    AND    CASES.  §   353 

§  353.  —  Lowell,  J., ^seemed  "to  doubt  both  the  general- 
ity and  the  justice  "  of  the  rule  stated  by  Davis,  J.,  in  Rob- 
inson V.  Elliott,^  and  regarded  the  doctrine  as  substantially 
settled,  that  when  a  vendor  or  mortgagor  was  permitted  to 
retain  the  possession  and  control  of  his  goods  and  act  as 
apparent  owner,  the  question  whether  this  was  a  fraud  or 
not  was  one  of  fact  for  the  jury.  The  court  observed  :  "A 
conveyance  for  a  valuable  present  consideration  is  never  a 
fraud  in  law  on  the  face  of  the  deed,  and  if  fraud  is  allesfed 
to  exist,  it  must  be  proved  as  a  fact."  It  is  considered  plain 
that  the  doctrine  of  Robinson  v.  Elliott  "  virtually  prevents 
a  trader  from  mortgaging  his  stock  at  any  time  for  any  use- 
ful purpose  ;  for  if  he  cannot  sell  in  the  ordinary  course  of 
trade,  or  only  as  the  trustee  and  agent  of  the  mortgagee,  he 
might  as  well  give  possession  to  the  mortgagee  at  once  and 
go  out  of  business." 

It  is  to  be  noticed  that  the  court  by  this  sentence  ex- 
presses the  belief  that  shifting  liens  upon  merchandise, 
which  open  and  close  at  the  will  of  the  mortgagor,  are  not 
necessarily  fraudulent  contrivances  devised  to  defeat  cred- 
itors ;  on  the  contrary,  such  mortgages  seem  to  be  con- 
templated as  capable  of  subserving  a  "  useful  purpose." 
Many  of  the  cases,  however,  which  follow  Brett  v.  Carter, 
in  holding  that  fraud  is  a  question  of  fact,  concede,  and 
often  expressly  state,  that  contrivances  of  this  class  are  con- 
venient covers  for  fraud  upon  creditors.  It  seems  to  have 
been  admitted  in   Brett  v.  Carter,^  that  there  was  no  fraud 


2  Story  647;  Miller  v.  Jones,  15  N.  B.  standing  of  the  parties,  expressed  or 

R.  150;  Barron  v.  Morris,  14  N.  B.  R.  implied,  is  to  remain  in  possession  of 

371  ;   Frankhouser  v.  Ellett,  22  Kan.  the  property,  with  a  power  of  sale,  is 

127;  s.  C.  31  Am.  Rep.  171  ;  Williams  void  upon  a  principle  of  public  policy 

V.  Wipsor,   12  R.  I.  9.     See  S.  C.  17  embodied  in  the  State,  irrespective  of 

Alb.  L.  J.   359,  an-l   cases   cited.     It  any  question  of  actual  and   intended 

may  be  observed  that  Dillon,  J.,  adopt-  fraud."     Re  Kirkbride,  5  Dill.  117. 

ed  the  other  rule  when  sitting  as  a  cir-  '  Brett  v.  Carter,  2  Lowell  458. 

cuit  judge.     He  said  :  "A  conveyance  -  22  Wall.  513. 

of  personal  property  to  secure  credit-  ^  2  Low.  458. 
ors,  when  the  grantor,  by  the  under- 


§   354  THE    PRINCIPLE    INVOLVED.  47/ 

in  fdct  as  it  is  commonly  termed  ;  that  the  transaction 
showed  that  all  the  stock,  present  and  future,  was  hypoth- 
ecated to  the  payment  of  a  certain  debt  by  instalments. 
"  No  offer  is  made,"  said  Lowell,  J.,  "to  prove  that  any 
one  was  deceived,  or  even  was  ignorant  of  the  mortgage ; 
but  I  am  asked  to  find  fraud  in  law,  when  I  know,  and  it 
is  admitted,  there  was  none  in  fact."  The  court  cites  Mr. 
May's  treatise  as  authority  for  the  statement  that  fraud  is 
a  question  of  fact,^  but  omits  to  note  that  the  learned  au- 
thor was  on  the  page  cited  discussing  the  question  of  the 
effect  of  the  simple  retention  of  possession,  and  fails  to 
notice  the  following  observation  :*  "  The  rule  seems  to  be 
that  where  there  is  an  absolute  conveyance,  and  the  grantor 
remains  in  possession  in  such  a  way  as  to  be  able  to  use  the 
goods  as  his  own,  it  is  always  void  against  creditors,  even 
though  made  on  valuable  consideration."^ 

§  354.  Discussion  of  the  principle  involved. — It  is  foreign 
to  our  design  to  kindle  the  smouldering  embers  of  this  dis- 
cussion into  new  flame.  It  will  be  seen  at  a  glance  that 
the  subject-matter  of  contention  in  the  controversy  is  the 
much-debated  distinction  between  fraud  in  law  and  fraud 
in  fact.  The  conclusion  is  reached  in  our  opening  chapter,* 
that  this  distinction  is  largely  mythical,  and  relates  only  to 
the  character  and  quantity  of  the  proof  adduced  to  nullify 
the  transaction.  Where  the  evidence  is  of  sugh  a  con- 
clusive nature  that  the  fraudulent  intent  unmistakably 
fastens  its  fangs  upon  the  transfer,  so  that  a  verdict  or  find- 
ing contrary  to  the  evident  evil  design  so  established  would 
be  erroneous,  the  court  pronounces  the  transaction  covin- 
ous, and  imputes  the  fraudulent  intent  to  the  parlies  in 
obedience  to  the  principle  of  law  tliat  they  must  have  con- 
templated the  natural  and  necessary  consetjucnces  of  their 


'  May  on  Fraudulent   Conveyances,        '  See   Pierce   on   Fraudulent   Mort- 
p.  106.  gages  of  Merchandise,  §  123. 

^  Ibid.,  p.  100.  ■•  See  §§9,  10. 


478         SALES  FOR  mortgagee's  BENEFIT.        §  355 

acts.  Where  the  facts  are  not  controverted  and  do  not 
admit  of  a  construction  consistent  with  innocence,  surely 
the  burden  is  cast  upon  the  court  to  declare  the  result. 
There  is  no  question  of  intention  to  be  submitted  to  the 
jury.  As  the  mortgage  shows  upon  its  face  that  it  was  not 
designed  by  the  parties  as  an  operative  instrument  between 
them,  its  only  effect  is  to  prejudice  others.  The  court 
should  "  pronounce  it  void,  for  the  reason  that  the  evi- 
dence conclusively  shows  it  fraudulent."^  It  is  because 
such  trusts  are  calculated  to  deceive  and  embarrass  credit- 
ors, because  they  are  not  things  to  which  honest  debtors 
can  have  occasion  to  resort  in  sales  of  their  property,  and 
because  they  constitute  the  means  which  dishonest  debtors 
commonly  and  ordinarily  use  to  cheat  their  creditors,  that 
the  law  does  not  permit  a  debtor  to  say  that  he  used  them 
for  an  honest  purpose  in  any  case.^  Chief-Justice  Ryan 
said  :  "  Intent  does  not  enter  into  the  question.  Fraud 
in  fact  goes  to  avoid  an  instrument  otherwise  valid.  But 
intent,  bona  fide  or  mala  fide,  is  immaterial  to  an  instru- 
ment per  se  fraudulent  and  void  in  law.     The  fraud  which 

the  law  imputes  to  it  is  conclusive Fraud  in  fact 

imputed  to  a  contract  (valid  on  its  face)  is  a  question  of 
evidence  ;  not  fraud  in  law.  And  no  agreement  of  the 
parties  in  parol  can  aid  a  written  instrument  fraudulent  and 
void  in  law."^ 

§  355-  Authorizing  sales  for  mortgagee's  benefit. — Three 
cases,**  decided  in  the  New  York  Court  of  Appeals  in  rapid 
succession,  and  recently  approv^ed  in  the  same  court, ^  held 
that  a  chattel  mortgage  was  not  pei'  se  void  because  of  a 
provision  contained  in  it  allowing  the  mortgagor  to  sell  the 
mortgaged  property  and  account  to  the  mortgagee  for  the 


'  Russell  V.  Winne,  37  N.  Y.  595.  Conkling   v.    Shelley,   28    N.  Y.  360  ; 

-  Coolidge  V.  Melvin,  42  N.  H.  520;  Miller  v.  Lockvvood,  32  N.  Y.  293. 

Winkley  v.  Hill,  9  N.  H.  31.  ^  Brackett  v.  Harvey,  91  N.  Y.  221. 

3  Biakeslee  v.  Rossman,  43  Wis.  124.  See  Hawkins  v.  Hastings  Bank,  i  Dil- 

•*  Ford  V.  Williams,  24  N.  Y.  359 ;  Ion  462. 


§  35^  SALES    UPON    CREDIT,  479 

proceeds,  and  apply  them  to  the  mortgage  debt.  "  These 
cases,"  says  Finch,  J.,  "  went  upon  the  ground  that  such 
sale  and  application  of  proceeds  is  the  normal  and  proper 
purpose  of  a  chattel  mortg^age,  and  within  the  precise 
boundaries  of  its  lawful  operation  and  effect.  It  does  no 
more  than  to  substitute  the  mortgagor  as  the  agent  of  the 
mortgagee,  to  do  exactly  what  the  latter  had  the  right  to 
do,  and  what  it  was  his  privilege  and  his  duty  to  accom- 
plish."^ It  may  be  observ-ed  that  a  subsequent  judgment- 
creditor  is  entitled  to  have  an  account  of  the  sales  so  made 
stated,  and  to  have  the  amount  thereof  applied  to  reduce 
the  morto^aore  debt.^ 

§  356.  Sales  upon  credit. — The  rule  being  established  that 
the  mortgagor  may  sell  the  property  and  account  for  the 
proceeds  to  the  mortgagee,  and  that  such  an  arrangement 
is  not  fraudulent  in  law  if  made  with  an  honest  intention,^ 
another  phase  of  the  controversy  must  be  considered. 
What  will  be  the  effect  if  the  mortgagor  is  not  restricted 
to  sales  for  cash,  but  is  allowed  to  sell  upon  credit,  in  his 
discretion  ?  Elsewhere  it  is  shown  that  general  assign- 
ments permitting  the  assignee  to  sell  upon  credit  are  re- 
garded as  fraudulent,  because  such  agreements  hinder  and 
delay  creditors  and  prevent  the  immediate  application  of 
the  debtor's  property  to  the  payment  of  their  claims.*  The 
same  principle  has  been  extended  and  applied  to  sales  of 
the  mortgaged  property  made  upon  credit  by  the  mort- 
gagor for  the  mortgagee.  The  arrangement  is  calculated 
to  keep  the  creditors  at  bay,  and  is  regarded  as  fraudulent 


•  Brackett  v.  Harvey.  91  N.  Y.  221  ;  '  Ford  v.  Williams,  24  N.  Y.  359  ; 
S.  P.  Wilson  V.  Sullivan,  58  N.  H.  260  ;  Brackett  v.  Han'cy,  91  N.  Y.  221 ;  Haw- 
Hawkins  V.  Hastings  Bank,  i  Dillon  kins  v.  Hastings  Bank,  i  Dill.  462. 
462  ;  Overman  v.  Quick,  8  Biss.  134  ;  ^  Nicholson  v.  Leavitt,  6  N.  Y.  510  ; 
Abbott  V.  Goodwin,  20  Me.  408;  Crow  Barney  v.  Griffin,  2  N.  Y.  365  ;  Dun- 
v.  Red  River  Co.  Bank,  52  Tex.  362.  ham  v.  Waterman,  17  N.  Y.  21.     See 

*  Ellsworth  V.  Phelps,  30  Hun  (N.  §§  332,  333. 
Y.)  646. 


480  POSSESSION.  §  357 

per  se}  If,  however,  the  accounts,  where  the  sales  are 
effected  on  credit,  are  immediately  transferred  to  the  mort- 
gagee at  their  face,  and  credited  or  allowed  upon  the  mort- 
gage debt,  the  objectionable  elements  of  the  transaction 
are  eliminated,  and  the  arrangement  will  be  tolerated.^  In 
Brown  v.  Guthrie,^  Finch,  J.,  said  :  "  The  dealing,  there- 
fore, must  be  treated  as  a  chattel  mortgage  by  the  debtor 
to  his  creditor,  the  consideration  of  which  was  evidenced 
and  settled  by  the  outside  agreement.  So  regarded,  the 
findings  declare  it  to  have  been  in  good  faith  and  not  fraud- 
ulent. The  arrangement  for  the  sale  on  credit  was  made 
harmless  by  the  stipulation  that  Guthrie  should  take  the 
credits  as  cash,  and  himself  bear  the  delay,  and  risk  the 
solvency  of  the  purchasers."  * 

§  357-  Possession — Independent  valid  transactions. — Sell- 
ing or  taking  possession  of  the  property  under  and  b)^  virtue 
of  the  fraudulent  mortgage  cannot,  of  necessity,  purge  it 
of  the  vice  of  fraud. ^  The  title  remained  fraudulent  and 
voidable  still  as  against  creditors.^  Before  and  after  taking 
possession,  the  title  of  the  mortgagee  rests  equally  upon 
the  mortgage,  and  the  question,  as  regards  creditors  of  the 
mortgagor,  is  the  validity  of  his  paper  title.  The  mortga- 
gee's possession  under  the  mortgage  is  as  good  or  as  bad 
as  the  mortgage  itself,  and  the  court  has  not  the  power  to 


'  City  Bank  v.  Westbury,  16  Hun  (N.  Y.)  31  ;  the  Court  of  Appeals  of  New 

Y.)  458.  York,  in  Parshall  v.  Eggert,  54  N.  Y. 

^  Caring  v.  Richmond,  22  Hun  (N.  18  ;  the  Supreme  Court  of  Wisconsin, 

Y.)  370,  in  Blakeslee  v.  Rossman,  43  Wis.  116, 

^  no  N.  Y.  435,  443.  and  the  Supreme  Court  of  Minnesota, 

*  Citing  Brackett  V.  Harvey,  91  N.Y,  in  Stein  v.  Munch,  24  ]Minn.  390, — all 

214.  hold  that  where  the  mortgage  is  void 

'"  In  Wells  V.  Langbein,  20  Fed.  Rep.  for  fraud  as  to  creditors,  taking  pos- 

183,  186,  the  court  observe  :  "  The  Su-  session  thereunder,  before  a  lien  is  ob- 

preme  Court  of  California,  in  Chenery  tained  on  the  property  in  favor  of  a 

V.   Palmer,  6  Cal,    123;   the  Supreme  creditor,  will  not  render  it  valid.     The 

Court  of  New  York,  in   Delaware  v.  fraud  existing  in  the  mortgage  itself 

Ensign,    21    Barb.    (N.    Y.)    85,    and  vitiates  all  steps  taken  under  it." 

Dutcher   v.    Swartwood,   15   Hun    (N.  *^  Smith  v.  Ely,  10  N.  B.  R.  563. 


§  35^  RIGHT    OF    REVOCATION.  48 1 

transmute  a  void  mortgage  into  a  valid  pledge.^  But  even 
in  cases  where  the  mortgage  is  fraudulent,  if  the  mortgagee 
repudiates  the  instrument  and  casts  it  aside,  and  obtains  a 
pledge  of  the  goods,  accompanied  by  delivery  and  an  open 
change  of  possession,  and  by  a  distinct  agreement  subse- 
quent to  and  independent  of  the  mortgage,  his  rights  will 
be  protected  as  against  the  other  creditors.'^ 

§  358.  Right  of  revocation — Reservations. — We  have  seen 
that  a  debtor,  before  any  lien  attaches  in  favor  of  credit- 
ors, possesses  the  right  to  make  any  disposition  of  his 
property.^  The  contract,  however,  by  which  he  parts  with 
it  must  be  absolute  and  unconditional,  for  if  he  retain  the 
right  to  revoke  the  contract  and  resume  the  ownership  of 
the  property,  the  reservation  is  considered  as  inconsistent 
with  a  fair,  honest,  and  absolute  sale,  and  renders  the 
transfer  fraudulent  and  void.*  In  the  ffreat  case  of  Riffffs 
V.  Murray,^  in  which  the  various  instruments  of  transfer 
contained  powers  of  revocation,  Chancellor  Kent  held  the 
transfers  void,  saying  that  there  was  a  necessary  inference 
of  a  purpose  to  "  delay,  hinder,  or  defraud  creditors,"  that  V 
the  only  effect  of  these^ssignments  was  "to  mask  the  %<-3/ 
property";  and  that  such  powers  of  revocation  are  fatal 
to  the  instrument  and  poison  it  throughout,  appears  to 
have  been  well  established  by  authority.^  So  a  deed  re- 
servino:  the  ric^ht  to  the  c^rantor  to  sell  and  convev  the 
property  without  the    consent    of  the   grantee,   is    incon- 

'  Blakeslee  v.  Rossman,  43  Wis.  127.  Minn.  435  ;  Baldwin  v.  Flash,  58  Miss. 

See  Robinson  v.  Elliott,  22  Wall.  513;  593. 
Dutcher  v.  Swartwood,  15  Hun  (N.  Y.)         "  See  §  52. 

31  ;  Stimson  v.  Wrigley,  86  N.  Y.  332 ;         *  West  v.  Snodgrass,  17  Ala.  554. 
In  re  Forbes,  5  Diss.  510  ;  Janvrin  v.         =  2   Johns.    (N.    Y.)    565.       But  see 

Fogg,  49  N.  H.  340;  Wells  v.  Lang-  Murray   v.    Riggs,    15  Johns.  (N.  Y.) 

bein,  20  Fed.  Rep.  183,  186.     But  com-  571. 

pare  Baldwin  v.  Flash,  59  Miss.  66,  and         "^  Compare  Smith  v.  Conkwright,  28 

cases  cited.  Minn.  23  ;  Shannon  v.  Commonwealth, 

"■  Pettee   v.   Dustin,  58   N.   H.  309 ;  8   S.   &    R.   (Pa.)  444 ;    The    King  v. 

Brown  v.  Piatt,  8  Bosw.  (N.  Y.)  324  ;  Earl  of  Nottingham,  Lane  42  ;   Smith 

First     Nat.    Bank    v.    Anderson,    24  v.  Hurst,  10  Hare  30. 
31 


482  CONSUiMABLE  PROPERTY.  §  359 

sistent  with  the  idea  of   a   sale,  and  may  be  avoided  by 
creditors.^ 

§  359.  Rule  as  to  consumable  property. — The  mortgaging 
of  property,  the  use  of  which  involves  its  consumption,  is 
an  evidence  of  fraud  of  much  weight.  Unless  satisfac- 
torily explained  it  will  cause  the  condemnation  of  the  in- 
strument.* Of  course  articles  in  their  nature  subject  to  be 
consumed  in  their  use  may  be  mortgaged  without  any  im- 
putation of  fraud,  provided  they  are  not  to  be  used,  and 
may  be  kept  without  damage  until  the  mortgage  debt  shall 
become  payable.'^  If,  however,  the  mortgage  covers  arti- 
cles which  would  perish  or  be  destroyed  before  the  debts 
secured  by  the  mortgage  mature,  it  becomes  manifest  that 
the  object  was  not  to  apply  these  things  to  the  payment  of 
the  mortgage,  but  to  secure  the  debtor  in  their  possession 
and  enjoyment.^ 

1  Fisher  v.  Henderson,  8  N.   B.  R.  550;    Shurtleflf  v.  Willard,    19    Pick. 

175.     Compare  Henderson  v.   Down-  (Mass.)    202 ;    Robbins  v.   Parker,   3 

ing,  24  Miss.  106;  Coolidge  v.  Melvin,  Met.  (Mass.)  120.     See  Googins  v.  Gil- 

42  N.  H.  510;   Donovan  v.  Dunning,  more,  47  Me.  14;  Putnam  v.  Osgood, 

69  Mo.  436;   Lukins  v.  Aird,  6  Wall.  51  N.  H.  200. 

78.     See  May  on  Fraudulent  Convey-  ^  Robbins  v,  Parker,  3  Met.  (Mass.) 

ances,   93,   94.     See  §  11,   and   cases  120.     Compare  Miller  v.  Jones,  15  N. 

cited.  B.  R.  154. 

*  Farmers'    Bank    v,    Douglass,    19  "  Farmers'    Bank    v.    Douglass,    19 

Miss.   540;   Brockenbrough  v.  Brock-  Miss.  541.     See   Quarles  v.  Kerr,  14 

enbrough,  31  Gratt.  (Va.)  590 ;  Som-  Gratt.  (Va.)  48. 
merville  v.   Horton,   4  Yerg,  (Tenn.) 


CHAPTER     XXIII. 


SPENDTHRIFT    TRUSTS. 


360.  Aversion    to   exemptions   other 

than  statutory. 

361.  Restraints  upon  alienation. 

•^     ■  (  Repugnant  conditions. 

364.  Nichols  V.  Eaton  ;  the  point  act- 
ually involved. 


§365.  The  dictum  in  Nichols  v.  Ea- 
ton. 

366.  The  correct  rule. 

367.  Broadway  Bank  v.  Adams. 

368.  Spendthrift   trusts    in    Pennsyl- 


"  It  is  a  settled  rule  of  law  that  the  beneficial  interest  of  the  cestui  que  trusty  whatever  it 
may  be,  is  liable  for  the  payment  of  his  debts.  It  cannot  be  so  fenced  about  by  inhibitions 
and  restrictions  as  to  secure  to  it  the  inconsistent  characteristics  of  right  and  enjoyment  to  the 
beneficiary  and  immunity  from  his  creditors." — Mr.  Justice  Swayne  in  Nichols  v.  Levy^  5 
Wall.  441. 

^  360.  Aversion  to  exemptions  not  statutory. — Aside  from 
statutory  exemptions  trivial  in  amount,^  the  idea  of  the 
existence  of  rights  of  property  of  any  kind  in  a  debtor, 
which  cannot  be  reached  by  creditors  and  applied  toward 
the  satisfaction  of  debts,  is  abhorrent  to  modern  convic- 
tions of  justice  toward  the  creditor  class.  The  personal 
liberty  of  the  debtor  being  no  longer  in  danger,  there 
exists  no  controlling  check  upon  his  recklessness  and  im- 
providence.^ This  is  the  source  of  the  strong  tendency, 
manifested  in  the  courts,  to  strengthen,  enlarge,  and  per- 
fect the  creditors'  remedies  and  recourses  against  the  prop- 
erty and  interests  of  the  debtor  class.  The  plain  purpose 
manifested  in  our  modern  law  in  extending  relief  to  cred'- 
itors,  is  twofold  :  first,  to  enforce  the  creditors'  equitable 
lien  upon  the  debtor's  property  considered  as  a  trust  fund;* 
and  second,   to   inflict   a   species  of    negative  punishment 


See  §§  46-50.  365- 
See  §  2. 


'  See  Egery  v.  Johnson.  70  Me.  258  ; 
Seymour  v,  Wilson,  19  N.  Y.  418.. 


484  AVERSION    TO    EXEMPTIONS.  §  360 

upon  the  debtor  by  depriving  him  of  the  personal  comforts 
and  enjoyments  which  result  from  the  possession  and  use 
of  property  or  accumulated  wealth.  There  can  be  no  spec- 
tacle more  revolting  to  the  mass  of  mankind,  and  especially 
in  a  community  such  as  ours,  than  that  of  a  bankrupt  or 
insolvent  revelling  in  luxury.  It  is  opposed  to  a  wise  pub- 
lic policy  that  a  man  "  should  have  an  estate  to  live  on,  but 
not  an  estate  to  pay  his  debts  with,"^  or  that  he  should 
possess  "  tne  benefits  of  wealth  without  the  responsi- 
bilities."^ Chief-Justice  Denio  said  :  "  It  is  against  general 
principles  that  one  should  hold  property,  or  a  beneficial 
interest  in  property,  by  such  a  title  that  creditors  cannot 
touch  it."^ 

The  feelings  of  the  general  community  were  shocked  at 
the  dictum  of  Wright,  J.,  in  Campbell  v.  Foster,^  to  the 
effect  that  the  surplus  of  a  trust  fund  created  by  a  third 
party,  for  the  benefit  of  the  debtor,  was  not  available  to  his 
creditors.  The  more  recent  opinion  of  Rapallo,  J.,  in 
Williams  v.  Thorn,^  holding  that,  whether  the  trust  relate 
to  realty  or  personalty,  the  surplus  income  of  such  an  estate 
beyond  what  was  needed  for  the  suitable  support  and  main- 
tenance of  the  cestui  que  trust  and  those  dependent  upon 
him,  could  be  reached  by  a  creditors'  bill,  was  greeted  with 
satisfaction.     An  effort,  however,  has  been  made  to  close 


'  Tillinghast  v.  Bradford,  5  R.  I.  205,  The  general  introduction  of  spendthrift 

212.  trusts  would  be  to  form    a  privileged 

'  Gray  on  Restraints  on  Alienation,  class,  who  could  indulge  in  every  spec- 

p.  169.  ulation,  could  practice  every  fraud,  and, 

^  Rome  Exchange  Bank  v.  Eames,  4  provided  they  kept  on  the  safe  side  of 

Abb.  App.  Dec.  (N.  Y.)  83,  99.    "  That  the    criminal    law,    could    yet   roll    in 

grown  men   should   be  kept  all   their  wealth.     They  would    be   an  aristoc- 

lives  in  pupilage,  that  men  not  paying  racy,  though   certainly  the   most  con- 

their  debts  should  live  in  luxury  on  in-  temptible    aristocracy    with    which    a 

herited  wealth,  are   doctrines   as   un-  country  was    ever   cursed."     Gray  on 

democratic  as  can  well    be  conceived.  Restraints  on  Alienation,  p.  174. 

They  are  suited  to  the  times  in  which  ^  35  N.  Y.  361.    See  §  45. 

the  Statute  De  Bonis  was  enacted,  and  *  70  N.  Y.   270.     See  Arzbacher  v. 

the  law  was  administered   in    the   in-  Mayer,  53  Wis.  391. 
terest   of  rich  and   powerful  families. 


§  3^1 


RESTRAINTS    UPON    ALIENATION. 


485 


another  source  of  possible  relief  to  creditors,  by  the  class  of 
cases  already  referred  to,*  and  which  will  presently  be  con- 
sidered more  at  length.  First,  however,  we  will  glance  at 
the  authorities  which  discuss  the  rights  of  the  parties  in 
cases  where  property  has  been  conveyed  with  a  restraint 
imposed  upon  its  alienation,  or  an  attempt  has  been  made 
to  vest  it  in  the  grantee  without  subjecting  it  to  liability 
to  his  creditors. 

§  361.  Restraints  upon  alienation. — The  theory  of  the  law 
is  that  no  person  shall  be  permitted  to  enjoy  or  hold  any 
interest  in  property  to  which  the  incidents  of  ownership, 
i.  e.,  the  right  of  alienation  and  liability  to  the  claims  and 
remedies  of  creditors,  do  not  attach.^  A  condition  or  pro- 
viso in  a  grant  or  devise,  that  the  land  shall  not  be  subject 
to  alienation,  attachment,  or  levy,  is  treated  as  void.^  The 
policy  of  the  law  will  not  permit  property  to  be  so  limited 


'  See  §  45,  and  note. 

"^  See  Chap.  II. 

^  Blackstone  Bank  v.  Davis,  21  Pick. 
(Mass.)  42;  McCleary  v.  Ellis,  54  Iowa 
311;  S.  C.  20  Am.  Law  Reg.  N.  S. 
180;  and  the  learned  note  by  Henry 
Wade  Rogers,  Esq.,  at  page  185,  re- 
viewing the  authorities.  Prof.  Gray 
says  (Gray's  Restraints  on  Alienation), 
p.  12  :  "As  in  England,  so  in  America, 
a  condition,  or  a  conditional  limitation, 
restraining  the  owner  in  fee  simple 
from  selling  his  land,  is  bad.  Henning 
V.  Harrison,  13  Bush  (Ky.)  723;  Smith 
V.  Clark,  10  Md.  186 ;  Gleason  v.  Fayer- 
weather,  4  Gray  (Mass.)  348  ;  Campau 
V.  Chene,  i  Mich.  400  ;  McDowell  v. 
Brown,  21  Mo.  57;  Pardue  v.  Givens, 
I  Jones'  Eq.  (N.  C.)  306 ;  Schermer- 
horn  v.  Negus,  i  Denio  (N.  Y.)  448  ; 
Lovett  v.  Kingsland,  44  Barb.  (N.  Y.) 
560 ;  S.  C.  sub  nom.  Lovett  v.  Gillender, 
35  N.  Y.  617  ;  Walker  v.  Vincent,  19 
Pa.  St.  369 ;  Williams  v.  Leech.  28  Pa. 
St.  89 ;  Naglee's  Appeal,  33  Pa.  St.  89  ; 


Jauretche  v.  Proctor,  48  Pa.  St.  466 ; 
Kepple's  Appeal,  53  Pa.  St.  211 ;  Lario 
v.  Walker,  28  Grant  (Ont.)  216.  These 
cases  are,  decisions  directly  in  point, 
and  dicta  to  the  same  effect  are  found 
in  abundance,  e.g.,  in  Taylor  v.  Mason, 
9  Wheat.  325,  350;  McDonogh  v.  Mur- 
doch, 15  How.  367,  412;  Andrews  v. 
Spurlin,  35  Tnd.  262,  268  ;  Deering  v. 
Tucker,  55  Me.  284,  289 ;  Hawley  v. 
Northampton,  8  Mass.  3,  37 ;  Gray  v. 
Blanchard,  8  Pick.  (\Liss.)  284,  289; 
Van  Rensselaer  v.  Dennison,  35  N.  Y. 
393  ;  Turner  v.  Fowler,  10  Watts  (Pa.) 
325;  Reifsnyder  v.  Hunter,  19  Pa.  St. 
41  ;  Doebler's  Appeal,  64  Pa.  St.  9  ; 
Grant  v.  Carpenter,  8  R.  \.  36;  Doe  d. 
Mclntyre  v.  Mclntyre,  7  U.  C.  Q.  B. 
156;  McMaster  v.  Morrison,  14  Grant 
(Ont.)  138,  141  ;  Crawford  v.  Lundy, 
23  Grant  (Ont.)  244,  250 ;  Fulton  v. 
Fulton,  24  Grant  (Ont.)  422.  See  De- 
horty  v.  Jones,  2  Harr.  (Del.)  56,  note  ; 
Newkerk  v.  Nevvkerk,  2  Cai.  (N.  V.) 
345-" 


486  REPUGNANT    CONDITIONS.  §  362 

as  to  remain  in  a  party  for  life,  free  from  the  incidents  of 
property,  and  not  subject  to  his  debts.^ 

§  362.  Repugnant  conditions. — Restraints  upon  either  vol- 
untary or  involuntary  alienation  are  not  favored  in  the  law, 
and  are  defeated  upon  another  ground.  In  De  Peyster  v. 
Michael,^  after  a  careful  review  of  the  authorities,  the  New 
York  Court  of  Appeals  observed :  "  Upon  the  highest  legal 
authority,  therefore,  it  may  be  affirmed  that  in  a  fee-simple 
grant  of  land,  a  condition  that  the  grantee  shall  not  alien, 
or  that  he  shall  pay  a  sum  of  money  to  the  grantor  upon 
alienation,  is  void,  on  the  ground  that  it  is  repugnant  to 
the  estate  granted."  So  in  Bradley  v.  Peixoto,^  the  court 
say  that  it  is  "  laid  down  as  a  rule  long  ago  established, 
that  where  there  is  a  gift  with  a  condition  inconsistent 
with,  and  repugnant  to  such  gift,  the  condition  is  wholly 
void.  A  condition  that  tenant  in  fee  shall  not  alien  is  re- 
pugnant."* In  Mandlebaum  v.  McDonell  ^  will  be  found 
an  elaborate  review  of  the  cases  and  an  exhaustive  consid- 
eration of  the  question.  The  court  conclude  that  the  only 
safe  rule  of  decision  is  that  which  prevailed  at  common  law 
for  acres,  to  the  effect  that  "  a  condition  or  restriction  which 
would  suspend  all  power  of  alienation  for  a  single  day,  is 
inconsistent  with  the  estate  granted,  unreasonable,  and 
void."  In  Blackstone  Bank  v.  Davis,^  a  leading  and  im- 
portant case,  it  appeared  that  one  Davis  devised  to  his  son 
the  use  of  a  farm  of  one  hundred  and  twenty  acres,  with  a 
provision  that  the  land  should  not  be  subject  or  liable  to 
conveyance  or  attachment.  The  plaintiffs  recovered  a 
judgment  against  the  devisee  and  levied  an  execution  upon 
the  premises  as  being  land  held  by  the  defendant  in  fee. 
The  court  said  :  "  By  the  devise  of  the  profits,  use,  or  occu- 


'  4  Kent's  Com.,  p.  311.  Jr.  429;   McCullough   v.   Gilmore,   11 

-  6  N.  Y.  467,  497.  Pa.  St.  370. 

5  3  Ves.  Jr.  324.  "  29  Mich.  78,  107. 

■•  See  Brandon  v.  Robinson,  18  Ves.  *  21  Pick.  (Mass.)  42. 


§  3^3  REPUGNANT    CONDITIONS.  487 

pation  of  land,  the  land  itself  is  devised.  Whether  the  de- 
fendant took  an  estate  in  fee  or  for  life  only,  is  a  question 
not  material  in  the  present  case.  The  sole  question  is, 
whether  the  estate  in  his  hands  was  liable  to  attachment 
and  to  be  taken  in  execution  as  his  property.  The  plain- 
tiffs claim  title  under  the  levy  of  an  execution  against  the 
defendant,  and  their  title  is  valid  if  the  estate  was  liable  to 
be  so  taken.  That  it  was  so  liable,  notwithstandinof  the 
proviso  or  condition  in  the  will,  the  court  cannot  entertain 
a  doubt." 

§  363.  —  In  Walker  v.  Vincent '  the  testator  devised 
certain  real  estate  to  his  daughter  and  to  her  legal  heirs 
forever,  upon  the  express  condition  that  she  should  "  not 
alien  or  dispose  of  the  same,  or  join  in  any  deed  or  con- 
veyance with  her  husband  for  the  transfer  thereof,  during 
her  natural  life."  The  court  held  the  condition  void,  and 
that  a  fee-simple  estate  was  devised,  and  said  :  "  It  makes 
no  difference  that  the  testator  has  expressly  withheld  one 
of  the  rights  essential  to  a  fee-simple,  for  the  law  does  not 
allow  an  estate  to  be  granted  to  a  man  and  his  heirs,  with 
a  restraint  on  alienation,  and  frustrates  the  most  clear  in- 
tention to  impose  such  a  restraint,  just  as  it  allows  alien- 
ation of  an  estate  tail,  though  a  contrary  intent  is  manifest. 
And  it  would  be  exceedingly  improper,  in  any  court,  in 
construing  a  devise  to  a  man  and  his  heirs,  to  endeavor  to 
give  effect  to  the  restraint  upon  alienation  by  changing  the 
character  of  the  estate  to  a  life  estate,  with  a  remainder 
annexed  to  it,  or  with  an  executory  devise  over."*  In 
Hall  V.  Tufts  ^  the  testator  devised  certain  real  estate  to 
his  wife  for  her  life,  and  "the  remainder  of  his  estate, 
whether  real  or  personal,  in  possession  or  reversion,  to  his 


'  19  Pa.  St.  369.  Barb.    (N.    Y.)    560,    affi'd    sud    nom. 

'^Restraints    upon   personalty.  —  A  Lovett    v.    Gillender,    35    N.    Y.   67; 

condition  against  alienation  cannot  be  Barker  v.  Davis,  12  U.  C.  C.  P.  344. 
imposed  upon  an  absolute  interest  in         '  18  Pick.  (Mass.)  455. 
personalty.     Lovett  v.   Kingsland,   44 


488  NICHOLS    V.    EATON.  §  364 

five  children,  to  be  equally  divided  to  and  among  them,  or 
their  heirs,  respectively,  always  intending  and  meaning  that 
none  of  his  children  shall  dispose  of  their  part  of  the  real 
estate  in  reversion  before  it  is  legally  assigned  them."  The 
court  held  that  the  children  took  a  vested  remainder  in  the 
real  estate  given  to  the  wife  for  her  life,  and  that  the  clause 
restraining  them  from  alienating  it  before  the  expiration  of 
the  life  estate  was  void.^ 

§  364.  Nichols  V,  Eaton  ;  the  point  actually  involved. — The 
principle  embodied  in  Nichols  v.  Eaton, ^  and  more  espe- 
cially the  language  employed  by  Miller,  J.,  in  delivering 
the  opinion  of  the  Supreme  Court  in  that  case,  have  pro- 
voked extended  discussion  and  sharp  criticism.'^  The  im- 
portance of  the  case  seems  to  call  for  an  extended  state- 
ment of  the  facts  involved.  It  appeared  that  property  had 
been  devised  to  trustees  with  directions  to  pay  the  income 
to  the  children  of  the  testatrix  in  equal  shares,  and  on  the 
death  of  each  child,  his  or  her  share  was  to  go  over.  If 
the  sons  respectively  should  alienate,  or  by  reason  of  bank- 
ruptcy or  insolvency,  or  any  other  cause,  the  income  could 
no  longer  be  personally  enjoyed  by  them  respectively,  but 


'  "  Repugnant  conditions  are  those  law  will  allow  a  man  to  enjoy  rights  in 

which  tend  to  the  utter  subversion  of  property  which  he  cannot  transfer,  and 

the  estate,  such  as  prohibit  entirely  the  which   his    creditors   cannot   take    for 

alienation  or  use  of  the  property.   Con-  their    debts,  is    a  question  becoming 

ditions  which  prohibit  its  alienation  to  more  and  more  frequent  in  this  coun- 

particular    persons    or    for   a   limited  try.     In    1876   I   shared   the  surprise, 

period,  or   its  subjection  to  particular  common  to  many  lawyers,  at  the  opin- 

uses,  are  not  subversive  of  the  estate  ;  ion  of  the  Supreme  Court  of  the  United 

they  do  not  destroy  or  limit  its  alien-  States,  in  the  case  of  Nichols  v.  Eaton, 

able  or  inheritable  character."     Field,  91   U.  S.  716,   containing,    as   it  did, 

J.,  in  Cowell  v.Springs  Co.,  100  U.S.  57,  much  that  was  contrar)'  to  what,  both 

citing  Sheppard's  Touchstone,  129, 131.  in  teaching  and  practice,  I  had  hitherto 

■  91  U.  S.  716.  supposed  to  be  settled  law."    Thepref- 

'  This  decision  called  forth  an  essay  ace  adds  that  the  book  was   substan- 

by  Professor  Gray,  already  cited,  en-  tially  written  before  the  decision  of  the 

titled  Restraints  on  the  Alienation  of  Supreme  Judicial  Court  of  Massachu- 

Property.      These   sentences   may   be  setts  in  Broadway  Nat.  Bank  v.  Adams, 

found  in   the  preface:  "How  far  the  133  Mass.  170.     See /;{/>-a,  §  367. 


§  3^4  NICHOLS    V.    EATON.  4S9 

would  become  vested  in  and  payable  to  some  other  person, 
then  the  trust  as  to  such  portion  so  divested  should  im- 
mediately cease  and  determine.  In  that  event,  during  the 
residue  of  the  life  of  such  son,  the  income  was  to  be  paid 
to  his  wife  or  child,  and  in  default  of  such  persons,  to  be 
added  to  the  principal,  and  further,  "  in  case,  after  the 
cessation  of  said  income  as  to  my  said  sons  respectively, 
otherwise  than  by  death,  as  hereinbefore  provided  for,  it 
shall  be  lawful  for  my  said  trustees,  in  their  discretion,  but 
without  its  being  obligatory  upon  them,  to  pay  to  or  apply 
for  the  use  of  my  said  sons  respectively,  or  for  the  use  of 
such  of  my  said  sons  and  his  wife  and  family,  so  much  and 
such  part  of  the  income  to  which  my  said  sons  respectively 
would  have  been  entitled  under  the  preceding  trusts,  in 
case  the  forfeiture  hereinbefore  provided  for  had  not  hap- 
pened." One  of  the  sons  became  a  bankrupt,  and  his  as- 
signee in  bankruptcy  brought  a  bill  against  the  trustees  to 
have  the  income  of  the  son's  share  applied  for  the  benefit 
of  creditors.^ 

Mr.  Justice  Miller,  in  the  opening  sentences  of  his  opin- 
ion, observes  that  the  claim  of  the  assignee  is  founded  on 
the  proposition  "  that  a  will  which  expresses  a  purpose  to 
vest  in  a  devisee  either  personal  property,  or  the  income  of 
personal  or  real  property,  and  secure  to  him  its  enjoyment 
free  from  liability  for   his  debts,   is  void  on    grounds  of 


'  Nichols  V.  Eaton,  re-stated. — In  subject  to  other  dispositions.  The  as- 
Hyde  v.  Woods,  94  U.  S.  526,  Mr.  signee  of  the  bankrupt  sued  to  recover 
Justice  Miller  takes  occasion  to  ob-  the  interest  bequeathed  to  the  bank- 
serve  that  his  own  opinion  in  Nichols  rupt,  on  the  ground  that  this  condition 
V.  Eaton,  91  U.  S.  716,  "  was  well  con-  was  void  as  against  public  policy.  But 
sidered,"  and  says  :  "  In  that  case,  the  this  court,  on  a  full  examination  of  the 
mother  of  the  bankrupt  Eaton,  had  be-  authorities,  both  in  England  and  this 
queathed  to  him  by  will  the  income  of  country,  held  that  the  objection  was  not 
a  fund,  with  a  condition  in  the  trust  well  taken;  that  the  owner  of  property 
that  on  his  bankruptcy  or  insolvency  might  make  such  a  condition  in  the 
the  legacy  should  cease  and  go  to  his  transfer  of  that  which  was  his  own, 
wife  or  children,  if  he  had  any,  and  if  and  in  doing  so  violated  no  creditor's 
not,  it  should  lapse  into  the  general  rights  and  no  principle  of  public  pol- 
fund  of  the   testator's  estate,  and  be  icy." 


490  NICHOLS    V.    EATON.  §  364 

public  policy,  as  being  in  fraud  of  the  rights  of  creditors ; 
or  as  expressed  by  Lord  Eldon  in  Brandon  v.  Robinson:^ 
'  If  property  is  given  to  a  man  for  his  life,  the  donor  cannot 
take  away  the  incidents  to  a  life  estate.'"  "There  are  two 
propositions,"  continues  the  learned  judge,  "  to  be  con- 
sidered as  arising  on  the  face  of  this  will  as  applicable  to 
the  facts  stated :  (i)  Does  the  true  construction  of  the  will 
bring  it  within  that  class  of  cases,  the  provisions  of  which 
on  this  point  are  void  under  the  principle  above  stated  ? 
and  (2),  If  so,  is  that  principle  to  be  the  guide  of  a  court 
of  the  United  States  sitting  in  chancery  ?  "  After  review- 
ing the  English  authorities,  the  opinion  continues  :  "  Con- 
ceding to  its  fullest  extent  the  doctrine  of  the  English 
courts,  their  decisions  are  all  founded  on  the  proposition 
that  there  is  somewhere  in  the  instrument  which  creates 
the  trust  a  substantial  right,  a  right  which  the  appropriate 
court  would  enforce,  left  in  the  bankrupt  after  his  insol- 
vency, and  after  the  cesser  of  the  original  and  more  absolute 
interest  conferred  by  the  earlier  clauses  of  the  will.  This 
constitutes  the  dividing  line  in  the  cases  which  are  appar- 
ently in  conflict.  Applying  this  test  to  the  will  before  us, 
it  falls  short,  in  our  opinion,  of  conferring  any  such  right 
on  the  bankrupt.  Neither  of  the  clauses  of  the  provisos 
contain  anything  more  than  a  grant  to  the  trustees  of  the 
purest  discretion  to  exercise  their  power  in  favor  of  testa- 
trix's sons.  It  would  be  a  sufficient  answer  to  any  attempt 
on  the  part  of  the  son  in  any  court  to  enforce  the  exercise 
of  that  discretion  in  his  favor,  that  the  testatrix  has  in  ex- 
press terms  said  that  such  exercise  of  this  discretion  is  not 
'in  any  manner  obligatory  upon  them,' — words  repeated  in 
both  these  clauses.  To  compel  them  to  pay  any  of  this 
income  to  a  son  after  bankruptcy,  or  to  his  assignee,  is  to 
make  a  will  for  the  testatrix  which  she  never  made  ;  and 
to  do  it  by  a  decree  of  a  court  is  to  substitute  the  discretion 

>  18  Ves.  433. 


§  365  NICHOLS    V.    EATON.  49 1 

of  the  chancellor  for  the  discretion  of  the  trustees,  in  whom 
alone  she  reposed  it."  Thus  far  we  cannot  but  consider 
the  case  as  correctly  reasoned  and  decided,  since  a  gift  of 
a  life  estate  or  interest,  with  a  proviso  that  it  shall  go  over 
to  a  third  person  upon  alienation,  voluntary  or  involuntary, 
by  the  life  tenant,  is  considered  valid.  We  can  formulate 
no  well-founded  objection  to  such  a  transaction.  Probably 
the  earliest  case  in  which  the  point  is  so  held  is  Lockyer  v. 
Savage,^  decided  in  1773,  but  the  question  seems  now  to  be 
no  longer  a  matter  of  dispute.^ 

§  365.  The  dictum  in  Nichols  v.  Eaton. — The  court,  how- 
ever, seemed  disinclined  to  limit  the  discussion  to  the  ques- 
tions before  it.  Referring  to  the  implication  in  the  remark 
of  Lord  Eldon,  already  quoted,  the  court  were  unable  to 
see  that  the  power  of  alienation  was  a  necessary  incident  to 
a  life  estate  in  real  property,  or  that  the  rents  and  profits  of 
real  property,  and  the  interest  and  dividends  of  personal 
property,  might   not  be  enjoyed  by  an  individual  without 


'  2  Stra.  947.  V.    Maguire,  5  Ir.  Ch.  78 ;    Nichols  v. 

^  Shee  V.  Hale,  13  Ves.  Jr.  404;  Eaton, 91  U.S. 716  ;  Bramhall  v.  Ferris, 
Cooper  V.  Wyatt,  5  Madd.  482;  Martin  14  N.  Y.  41  ;  Emer)^  v.  Van  Syckel,  17 
V.  Margham,  14  Sim.  230 ;  Rochford  v.  N,  J.  Eq.  564,  cited  in  Gray's  Restraints 
Hackman,  9  Hare  475 ;  Brandon  v.  on  Alienation,  §  78.  Where  a  man 
Aston,  2  Y.  &  C.  N.  R.  24;  ^t?  Edging-  settled  his  property  upon  himself  for 
ton's  Trusts,  3  Drew  202  ;  Manning  v.  life,  or  until  he  should  become  a  bank- 
Chambers,  I  De  G.  &  Sm.  282  ;  Carter  rupt  or  insolvent,  and  after  his  death. 
V.  Carter,  3  Kay  &  J.  617;  Barnett  v.  bankruptcy  or  insolvency,  in  trust  for 
Blake,  2  Dr.  &  Sm.  117;  Re  Mugge-  his  wife  and  children,  and  the  settlor 
ridge's  Trusts,  Johnson,  625  ;  Sharp  v.  being  insolvent  assigned  his  property 
Cosserat,  20  Beav.  470 ;  Haswell  v.  to  trustees  for  the  benefit  of  creditors, 
Haswell,  28  Beav.  26 ;  Dorsett  v.  Dor-  it  was  held  that  the  trust  was  void  as 
sett,  30  Beav.  256  ;  Townsend  v.  Early,  against  the  assignee.  ///  re  Casey's 
34  Beav.  23  ;  Freeman  v.  Bowen,  35  Trusts,  4  Irish  Ch.  247.  A  bond  pay- 
Beav.  17;  Montefiore  v.  Behrens,  35  able  to  trustees  for  the  benefit  of  a 
Beav.  95  ;  Oldham  v.  Oldham,  L.  R.  3  wife  on  bankruptcy  of  the  obligor  is  not 
Eq.  404;  Roffey  v.  Bent,  L.  R.  3  Eq.  good.  Ex  parte  Hill,  i  Cooke's  Bkr. 
759  ;  Craven  v.  Brady,  L.  R.  4  Eq.  209;  Law  228  ;  Ex  parte  Bennet,  i  Cooke's 
S.  C.  L.  R,  4  Ch.  App.  296  ;  In  re  Am-  Bkr.  Law  228  ;  In  re  Murphy,  i  Sch. 
herst's  Trusts,  L.  R.  13  Eq.  464;  Bill-  &  Lef.  44;  Ex  parte  Taaffe.  i  Glyn  & 
son  V.  Crofts,  L.  R.  15  Eq.  314;  Ex  J.  no. 
parte  Eyston,  7  Ch.  D.  145  ;    Caulfield 


492  NICHOLS    V.    EATON.  §  365 

liability  for  his  debts  attaching  as  a  necessary  incident  to 
such  enjoyment.  The  opinion  continues:  "  Nor  do  we  see 
any  reason,  in  the  recognized  nature  and  tenure  of  property 
and  its  transfer  by  will,  why  a  testator  who  gives,  who 
gives  without  any  pecuniary  return,  who  gets  nothing  of 
property  value  from  the  donee,  may  not  attach  to  that  gift 
the  incident,  of  continued  use,  of  uninterrupted  benefit  of 
the  gift,  during  the  life  of  the  donee.  Why  a  parent,  or 
one  who  loves  another,  and  wishes  to  use  his  own  property 
in  securing  the  object  of  his  affection,  as  far  as  property 
can  do  it,  from  the  ills  of  life,  the  vicissitudes  of  fortune, 
and  even  his  own  improvidence,  or  incapacity  for  self-pro- 
tection, should  not  be  permitted  to  do  so,  is  not  readily 
perceived."  The  cases  cited  in  support  of  the  views  of  the 
court  ^  are  chiefly  from  Pennsylvania,^  and  unfortunately, 
as  we  think,  close  with  the  well-known  New  York  case  of 
Campbell  v.  Foster.^  This  case,  as  we  have  already  seen,^ 
contains  a  dichwi  to  the  effect  that  the  interest  of  a  bene- 
ficiary in  a  trust  fund  created  by  a  person  other  than  the 
debtor  is  not  available  to  creditors,  but,  as  heretofore  shown, ^ 
this  dictum  is  expressly  repudiated  by  Rapallo,  J.,  in  deliver- 
ing the  opinion  of  the  New  York  Court  of  Appeals  in 
Williams  v.  Thorn, ^  and  the  principle  in  support  of  which 
the  case  is  cited  in  Nichols  v.  Eaton  is  proved  never  to  have 
been  the  law  of  that  State. 

Nichols  V.  Eaton  embodies  a  dangerous  and  startling 
dicfzun.     If  the  question  whether  or  not  it  w^as  permissible. 


'  Leavitt  v.  Beirne,  21  Conn,  i  ;  Nick-  ^  35  N.  Y.  361.     See  Cutting  v.  Cut- 
ell    V.    Handly,   10    Gratt.   (Va.)   336 ;  ting,  86  N.  Y.  546. 
Pope's   Ex'rs    v.    Elliott,   8    B.   Mon.  *  See  §§  45,  360. 
(Ky.)  56.  '  See  §§  45.  360. 

'  Fisher  v.  Taylor,  2  Rawle  (Pa.)  33  ;  ^70  N,  Y.  270,    See  Tollis  v.  Wood, 

Holdship  V.   Patterson,  7  Watts  (Pa.)  99  N.  Y.  616;   S.  C.  16  Abb.  N.  C.  (N. 

547;   Shankland's  Appeal,  47   Pa.  St,  Y.)  i,  and  the  collection  of  cases  in  the 

113;    Ashhurst  v.  Given,   5   W.  &  S.  notes.     Parties  interested  in  this  class 

(Pa.)  323 ;  Brown  v.  Wiliamson,  36  Pa.  of  litigation  are  referred  to  this  valu- 

St.  338;   Still  V.  Spear,  45  Pa.  St.  168.  able  source  of  information. 
See  §368. 


§  3^5  NICHOLS    V.    EATON.  493 

aside  from  the  rules  of  law  establishing  the  tenure  by  which 
property  is  held  and  transferred,  to  allow  a  debtor  to  enjoy 
an  interest  in  property  free  from  the  claims  of  creditors, 
were  an  open  one,  we  should  certainly  answer  that  such  a 
policy  was  neither  judicious,  safe,  nor  wise.^  This  conclu- 
sion is  not  necessarily  rested  wholly  upon  the  theory  that 
such  a  vesting  of  property  in  a  debtor  is  a  fraud  upon  cred- 
itors, but  rather  that  property,  by  the  rules  of  law,  includes 
not  only  the  right  of  enjoyment,  but  also  the  right  of  alien- 
ation and  liability  for  debts.  While  it  is  true  that  the 
owner  of  property  may,  while  he  owns  it,  use  it  as  he  likes, 
yet  he  should  not  be  permitted  to  limit  or  control  its  use 
after  he  parts  with  it.'^  These  trust  estates  and  incomes  are 
in  the  opinion  likened  to  statutory  exemptions  ;  the  analogy 
is  considered  perfect ;  the  creditor,  it  is  said,  has  no  right 
to  look  to  either  of  these  sources  for  satisfaction  of  his 
claim.  We  challenge  the  justness  of  the  analogy  and  ques- 
tion the  correctness  of  the  rule  sought  to  be  formulated 
from  it.  Statutory  exemptions  are  trivial  in  value  ;  they 
do  not  clothe  the  debtor  with  indicia  of  wealth,  or  furnish 
him  with  comforts  or  luxuries.  It  would  be  inhumane  to 
permit  the  creditor  to  take  the  insolvent's  clothing  from 
his  back,  the  food  from  his  table,  or  the  bed  from  his  house. 
It  is  equally  against  a  wise  public  policy  to  deprive  the  pro- 
fessional man  of  his  library,  the  mechanic  of  his  tools,  or 
the  teamster  of  his  horses,  for  by  so  doing  the  insolvent 
would  be  pauperized  and  perhaps  rendered  a  public  charge, 
and  the  possibility  of  repairing  his  ill-fortune  by  future  in- 
dustry irretrievably  lost.  These  exemption  statutes  so  uni- 
versal in  their  operation  reflect  the  charitable  sentiments 
of  a  noble  and  generous  people,  and  exhibit  a  willingness 
on  the  part  of  the  law-makers  to  extend  a  protecting  hand 
to  unfortunate  struggling  insolvents.  We  den\-  that  the 
kindly  spirit  which  inspired  this  humane  legislation  can  be 


'  See  §  360.  '  See  10  Am.  Law  Rev.  595. 


494 


THE    CORRECT    RULE. 


§366 


tortured  or  perverted  so  as  to  subserve  the  purpose  of 
shielding  vagabond  spendthrifts  from  the  remedies  of  their 
creditors.^ 

§  366.  The  correct  rule. — The  true  rule  should  be  that 
^'  whatever  a  man  can  demand  from  his  trustees,  that  his 
creditors  can  demand  from  him."^  In  Tillinghast  v.  Brad- 
ford ^  it  appeared  that  the  devise  was  to  T.  in  trust  to  pay 
the  income  to  H.  for  life  ;  anticipation  or  payment  to  as- 


'  In  Spindle  v.  Shreve,  9  Biss.  199, 
200,  S.  C.  4  Fed.  Rep.  136,  the  will  con- 
tained this  provision  :  "  One-half  of 
each  share  (which  half  I  wish  to  be 
income-paying  real  estate)  I  desire  to 
be  set  apart  and  conveyed  to  a  trustee, 
to  be  held  for  the  use  and  benefit  of 
each  child  during  his  or  her  life,  and 
then  descend  to  his  or  her  heirs,  with- 
out any  power  or  right  on  the  part  of 
said  child  to  encumber  said  estate,  or 
anticipate  the  rents  thereof."  One  of 
the  children  became  a  bankrupt  and 
the  question  presented  upon  a  bill  filed 
by  his  assignee  was  whether  this  child 
"  had  such  an  interest  in  this  property 
that  it  passed  to  the  assignee,  and  so 
could  be  held  for  the  benefit  of  the 
creditors  ;  or  whether  it  was  an  estate 
which  was  to  be  held  for  his  personal 
benefit  for  life,  and  over  which  he  had 
no  power  or  control,  and  which  could 
not  go  for  the  benefit  of  creditors.  I 
have  come  to  the  conclusion,"  con- 
tinues Drummond,  J.,  "  that  under 
the  provisions  of  this  will  there  was  no 
estate  which  passed  to  the  assignee, 
but  that  the  property  in  Chicago  is  to 
be  held  by  the  trustee  to  whom  it  was 
conveyed  by  the  executor,  for  the  ben- 
efit of  the  son  during  his  life,  and  that 
the  rents  and  profits  of  the  estate  are 
to  be  paid  over  to  him  personally,  and 
that  he  has  no  power  to  transfer  any 
interest  which  he  has  in  the  estate  so 
as  to  defeat  the  provisions  made  in  the 
will.     This   will    is   attacked   on    the 


ground  that  the  provision  made  for  the 
son  is  contrary  to  public  policy,  and 
is,  therefore,  inoperative  and  void.  I 
hardly  think  the  authorities  warrant 
that  conclusion,  and,  if  they  do  not, 
then  the  only  question  is.  What  is  the 
legal  effect  of  this  provision  in  the  will, 
and  what  was  the  testator's  intention 
in  relation  to  the  estate  which  was  to 
be  held  by  the  trustee  ?  The  author- 
ities collected  in  the  case  of  Nichols  v. 
Eaton,  91  U.  S.  716,  show  that  it  was 
competent  for  the  testator  to  make 
such  a  provision  as  this,  namely :  to 
declare  by  his  will  that  his  estate,  or 
any  portion  of  it,  might  be  held  for  a 
child's  sole  benefit  during  life,  and  in 
such  a  way  that  it  could  not  be  reached 
by  creditors."  It  is  said  in  New  Jer- 
sey that  the  jurisdiction  of  the  Court 
of  Chancery  in  reaching  property  of  a 
judgment-debtor  does  not  extend  to 
trust  property  where  the  trust  has 
been  created  by  some  person  other 
than  the  debtor.  Hence  where  a  sum 
was  left  to  executors  in  trust  to  pay 
the  income  and  such  part  of  the  prin- 
cipal as  the  cestui  que  trust  should 
wish,  to  her,  and  she  requested  the 
trustees  to  invest  the  fund  in  a  farm,  it 
was  held  that  such  farm  could  not  be 
reached  by  a  creditor  of  the  cestui  que 
trust.  Lippincott  v.  Evens,  35  N.  J. 
Eq.  553.  See  Easterly  v.  Keney,  36 
Conn.  18. 

"  Gray  on  Restraints,  §  166. 

'  5  R.  I.  205. 


§  '^d'J  BROADWAY  BANK  V.  ADAMS.  495 

signs  was  prohibited,  the  income  beinor  intended  for  the 
sole  and  separate  use  of  H.  An  assignee  of  H.  for  the 
benefit  of  creditors  was  awarded  the  income  for  the  Hfe  of 
H.  The  court  said  :  "  This  has  been  the  settled  doctrine 
of  a  court  of  chancery,  at  least  since  Brandon  v.  Robinson,' 
and,  in  application  to  such  a  case  as  this,  is  so  honest  and 
just  that  we  would  not  change  it  if  we  could.  Certainly 
no  man  should  have  an  estate  to  live  on,  but  not  an  estate 
to  pay  his  debts  with.  Certainly  property  available  for  the 
purposes  of  pleasure  or  profit  should  be  also  amenable 
to  the  demands  of  justice."^  In  Bramhall  v.  Ferris,^  Corn- 
stock,  J.,  observed  that  if  a  bequest  is  given  "absolutely 
for  life,  with  no  provision  for  its  earlier  termination,  and 
no  limitation  over  in  the  event  specified,  any  attempt  of 
the  testator  to  make  the  interest  of  the  beneficiary  inalien- 
able, or  to  withdraw  it  from  the  claims  of  creditors,  would 
have  been  nugatory.  Such  an  attempt  would  be  clearly  re- 
pugnant to  the  estate  in  fact  devised  or  bequeathed,  and 
would  be  ineffectual  for  that  reason  as  well  as  upon  the 
policy  of  the  law.'"*  And  where  trustees  held  property 
with  power  to  apply  such  portion  of  it  as  they  saw  fit  to 
the  education  and  maintenance  of  a  beneficiary  until  he 
should  reach  twenty-five  years,  and  then  to  convey  the 
principal  with  all  accretions  to  him,  the  power  being  given 
to  the  trustees  in  their  discretion  to  convey  the  estate  to  the 
beneficiary  before  he  was  twenty-five  years  of  age,  it  was 
held  that  the  beneficiary's  interest  was  liable  for  his  debts.^ 

§  367.  Broadway  Bank  v.  Adams. — We  will  not    further 
pursue  this  subject  except  to  notice  an  important  case  in 


'  18  Ves.  429.  ^  14  N.  Y.  41. 

*  See  Pace  v.  Pace,  73  N.  C.  119;  *  Citing  Blackstone  Bank  v.  Davis, 

Bailie  v.  McWhorter,  56  Ga.  183 ;  East-  21  Pick.  (Mass.)  42  ;  Hallett  v.  Thotnp- 

erly  v.  Keney,  36  Conn.  18.     It  should  son,  5   Paige  (N.  Y.)  583  ;   Graves  v. 

be  noted  that  Nichols  v.  Eaton,  91  U.  Dolphin,  i  Sim.  66;  Brandon  v.  Robin- 

S.   716,  came  up  on  appeal  from  the  son,  18  Ves.  429. 

State  in  which  Tillinghast  v.  Bradford,  •'  Daniels  v.  Eldredge,  125  Mass.  356. 

5  R.  I.  205,  was  decided.  SeeHavensv.Healy,i5Barb.(N.Y.)  296. 


496  BROADWAY    BANK    V.    ADAMS.  §3^7 

Massachusetts — Broadway  Bank  v.  Adams.'  The  object 
of  the  bill  was  to  reach  and  apply  to  the  payment  of  the 
plaintiff's  claim  the  income  of  a  trust  fund  created  for  the 
debtor's  benefit  by  the  will  of  his  brother.  Briefly  the  will 
gave  $75,000  to  executors,  in  trust,  to  pay  the  net  income 
to  the  debtor  semi-annually  during  his  natural  life,  the  pay- 
ments to  be  made  personally  or  upon  his  order  or  receipt 
in  writing,  "  in  either  case  free  from  the  interference  or 
control  of  his  creditors,  my  intention  being  that  the  use  of 
said  income  shall  not  be  anticipated  by  assignment."  The 
income  after  the  debtor's  death  was  to  go  to  his  wife  and 
children,  and  upon  the  death  or  remarriage  of  the  wife, 
the  principal  and  accumulations  were  to  be  divided  among 
the  children.  Manifestly  the  intention  of  the  testator  was 
that  the  income  should  be  free  from  the  claims  of  credit- 
ors, and  that  the  courts  should  be  unable  to  compel  the 
trustee  to  divert  the  income  unless  the  provisions  and  in- 
tention were  unlawful.  The  court  observ^e  at  the  outset 
that  "  the  question  whether  the  founder  of  a  trust  can 
secure  the  income  of  it  to  the  object  of  his  bounty,  by  pro- 
viding that  it  shall  not  be  alienable  by  him  or  be  subject 
to  be  taken  by  his  creditors,  has  not  been  directly  ad- 
judicated"  in  Massachusetts,  but  say  that  the  tendency  of 
the  decisions  has  been  in  favor  of  such  a  power  in  the 
founder.^  The  reason  of  the  rule  that  a  restriction  upon 
the  power  of  alienation  is  void  because  it  is  repugnant  to 
the  grant,  is  said  not  to  apply  to  the  case  of  a  transfer  of 
the  property  in  trust,  as  by  the  creation  of  the  trust  the 
property  passes  to  the  trustee  with  all  its  incidents  and  at- 
tributes unimpaired.  The  trustee  "  takes  the  whole  legal 
title  to  the  property,  with  the  power  of  alienation  ;  the 
cestui  que  trust  takes  the  whole  legal  title  to  the  accrued 


'  133  Mass.  170.  (Mass.)  405  ;  Russell  v.  Grinnell,  105 

*  Citing  Braman   v.    Stiles,  2  Pick.     Mass.  425  ;  Hall  v.  Williams,  120  Mass. 

(Mass.)  460 ;  Perkins  v.  Hays,  3  Gray     344  ;  Sparhawk  v.  Cloon,  125  Mass.  263, 


§  -^6"]  BROADWAY  BANK  V.  ADAMS.  497 

income  at  the  moment  it  is  paid  over  to  him.  Neither  the 
principal  nor  the  mcome  is  at  any  time  inalienable."  It  is 
conceded  by  the  court  that  from^  the  time  of  Lord  Eldon 
the  rule  has  prevailed  in  the  English  Court  of  Chancery, 
to  the  effect  that  when  the  income  of  a  trust  estate  is 
given  to  any  person  (other  than  a  married  woman)  for  life, 
the  equitable  estate  for  life  is  alienable  by,  and  liable  in 
equity  to  the  debts  of,  the  cestui  que  trust,  and  that  this 
quality  is  so  inseparable  from  the  estate  that  no  provision 
however  express,  which  does  not  operate  as  a  cesser  or 
limitation  of  the  estate  itself,  can  protect  it  from  his  debts.^ 
The  English  rule,  the  court  observe,  has  been  followed  in 
some  of  the  American  cases,''  while  other  courts  "  have  re- 
jected it,  and  have  held  that  the  founder  of  a  trust  may 
secure  the  benefit  of  it  to  the  object  of  his  bounty,  by  pro- 
viding that  the  income  shall  not  be  alienable  by  anticipa- 
tion, nor  subject  to  be  taken  for  his  debts."  ^ 

Morton,  C.  J.,  said  :  "The  founder  of  this  trust  was  the 
absolute  owner  of  his  property.  He  had  the  entire  right 
to  dispose  of  it,  either  by  an  absolute  gift  to  his  brother,  or 
by  a  gift  with  such  restrictions  or  limitations,  not  repug- 
nant to  law,  as  he  saw  fit  to  impose We  do  not  see 

why  the  founder  of  a  trust  may  not  directly  provide  that 
his  property  shall  go  to  his  beneficiary  with  the  restriction 
that  it  shall  not  be  alienable  by  anticipation,  and  that  his 
creditors  shall  not  have  the  right  to  attach  it  in  advance, 
instead  of  indirectly  reaching  the  same  result  by  a  provi- 
sion for  a   cesser  or  a  limitation  over,  or   by  giving  his 


'  Brandon  v.  Robinson,  i8Ves.  429;  (N,    C.)   480;    Mebane  v.  Mebane,  4 

Green  v.  Spicer,  i   Russ.  &  Myl.  395  ;  Ired.  Eq.  (N.  C.)  131. 

Rochford  v.  Hackman,    9   Hare  475  ;  ^  Citing    Holdship    v.    Patterson.    7 

Trappes  v.  Meredith.  L.  R,  9  Eq.  229  ;  Watts  (Pa.)  547  ;  Shankland's  Appeal, 

Snowdon  v.  Dales,  6  Sim.  524;  Rippon  47  Pa.  St.   113;  Rife  v.  Geyer,  59  Pa. 

V.  Norton,  2  Beav.  63.  St.  393  ;  White  v.  White,  30  Vt.  338  ; 

""  Tillinghast  v.  Bradford,  5  R.  1.205  ;  Pope  v.   Elliott,  8  B.  Mon.  (Ky.)   56; 

Heath  v.  Bishop,  4  Rich.  Eq.  (S.  C.)  Nichols  v.  Eaton,  91  U.  S.  716;  Hyde 

46;  Dick  V.  Pitchford,  i  Dev.  &  B.  Eq.  v.  Woods,  94  U.  S.  523. 
32 


498  SPENDTHRIFT    TRUSTS.  ^  368 

trustees  a  discretion  as  to  paying  it.  He  has  the  entire  jus 
disp07ie7idi,  which  imports  that  he  may  give  it  absolutely, 
or  may  impose  any  restrictions  or  fetters  not  repugnant  to 
the  nature  of  the  estate  which  he  gives.  Under  our  system 
creditors  may  reach  all  the  property  of  the  debtor  not  ex- 
empted by  law,  but  they  cannot  enlarge  the  gift  of  the 
founder  of  a  trust,  and  take  more  than  he  has  given." 

This  is  probably  the  most  advanced  statement  of  the  ob- 
jectionable doctrine.  Reference  is  here  made  to  cases  like 
Broadway  Bank  v.  Adams,  and  to  the  dictum  in  Nichols  v. 
Eaton,  not  as  embodying  salutary  rules  or  wise  principles 
of  law,  but  rather  to  record  a  protest  against  the  existence 
and  growth  of  a  class  of  cases  which  at  present  are  com- 
paratively few  in  number.  The  creation  of  an  aristocracy 
of  prodigals,  who  can  dwell  in  luxury  and  defy  their  cred- 
itors, brings  the  administration  of  justice  into  disrepute, 
and  has  a  demoralizing  influence  upon  honest  people.  The 
creditor  is  unjustly  deprived  of  the  power  to  compel  his 
debtor  to  forego  the  comforts  and  luxuries  of  wealth,  or  to 
feel  the  privations  incident  to  insolvency.  The  tendency 
of  these  cases  must  be  checked  by  legislation,  or  the  sober 
second  thought  of  the  courts ;  the  doctrine  will  never  be 
tolerated  by  the  American  people. 

§  368.  Spendthrift  trusts  in  Pennsylvania. — It  is  common 
to  refer  to  Pennsylvania  as  the  birthplace  and  stronghold 
of  the  doctrine  of  spendthrift  trusts.^  Yet  Chief-Justice 
Agnew  said,  in  Overman's  Appeal  :^  *'  It  [a  spendthrift 
trust]  is  exceptionable  in  its  very  nature,  because  it  contra-- 
venes  that  general  policy  which  forbids  restraints  on  alien- 
ation and  the  non-payment  of  honest  debts A  trust 

to  pay  income  for  life  may  last  for  the  longest  period  of 


'  See  Fisher  v.  Taylor,  2  Rawle  (Pa.)  (Pa.)  323 ;  Brown  v.  Williamson,  36  Pa. 

33 ;    Holdship  v.   Patterson,  7   Watts  St.    338 ;    Still    v.    Spear,  45    Pa.    St. 

(Pa.)  547  ;  Shankland's  Appeal,  47  Pa.  168. 

St.  113  ;  Ashhurst  v.  Given.  5  W.  &  S.  *  88  Pa.  St.  276,  281. 


^  368  SPENDTHRIFT    TRUSTS.  499 

human  existence,  and  may  run  for  seventy  or  eighty  years. 
While  the  law  simply  tolerates  such  a  trust,  it  cannot  ap- 
prove of  it  as  contributing  to  the  general  public  interest. 
Property  tied  up  for  half  a  century  contributes  nothing  to 
the  general  wealth,  while  it  is  a  great  stretch  of  liberality 
to  the  ownership  of  it  to  suffer  it  to  remain  in  this  anoma- 
lous state  for  so  many  years  after  its  owner  has  left  it  be- 
hind him.  Clearly  it  is  against  public  interest  that  the 
property  of  an  after  generation  shall  be  controlled  by  the 
deed  [^gu.  dead]  of  a  former  period,  or  that  the  non-pay- 
ment of  debts  should  be  encouraged."* 


*  See  Gray  on  Restraints,  §  234. 


CHAPTER   XXIV. 

BONA      FIDE      PURCHASERS ACTUAL      AND     CONSTRUCTIVE 

NOTICE FRAUDULENT     GRANTEES. 


1369. 
370. 
371. 

372. 
373- 
374- 
375- 
376. 
377. 

378. 

379- 
380. 

381. 


Rights  oi  bona  fide  purchasers. 
Generality  of  the  rule. 
Mortgagee    as    bona  fide  pur- 
chaser. 
Without  notice. 
Kinds  of  notice. 
Constructive  notice  of  fraud. 

>  Rule  in  Stearns  v.  Gage. 

Carroll  v.  Hay  ward — Actual  be- 
lief. 
Parker  v.  Conner. 

Facts   sufficient  to   excite  in- 
quiry. 


§  382.  Actual  belief. 

383.  Purchaser  with  notice. 

384.  Purchaser  with  notice  from  bona 

fide  purchaser. 

385.  Fraudulent     grantee     as    trus- 

tee. 

386.  Title  from  fraudulent  vendee. 

387.  Creditors    of   fraudulent    gran- 

tees. 

388.  Liability     between     fraudulent 

grantees. 

389.  Fraudulent  grantee  sharing  in 

the  recovery. 


§  369.  Rights  of  bona  fide  purchasers. — As  has  been  ob- 
served, creditors  have  an  equitable  interest  in  the  property 
of  their  debtors,  or  in  the  means  the  latter  have  of  satisfy- 
ing the  creditors'  demands,^  which  the  law  will  under  cer- 
tain circumstances  enforce,  since  the  insolvent's  property 
constituted  the  foundation  and  inducement  of  the  trust  and 
credit.^  But  the  interests  of  a  bona  fide  purchaser  of  a 
debtor's  property  are  superior  to  those  of  creditors,  for  the 
obvious  reason  that  the  former  has  not,  like  a  mere  general 
creditor,  trusted  "to  the  personal  responsibility  of  the  debt- 
or, but  has  paid  the  consideration  upon  the  faith  of  the 
debtor's  actual  title  to  the  specific  property  transferred."^ 


'  Seymour  v.  Wilson,  19  N.  Y.  418.  '  Seymour  v.  Wilson,   19  N.  Y.  417, 

See  Chap.  II.  420.     See  Friedenwald  v.  Mullan,    10 

''  Egery  v.  Johnson,  70  Me.  261.    See  Heisk.  (Tenn.)  229;  Goshom  v.  Snod- 

§  5.  grass,   17   W.   Va.   717  ;    Thames    v. 


§  3^9  BONA    FIDE    PURCHASERS.  5OI 

In  such  a  case  the  interests  of  the  general  creditors  are 
superseded  or  defeated  by  the  purchaser's  superior  equity.^ 
It  is  merely  a  substitution  of  property.  The  value  given 
or  paid  by  the  purchaser  has  taken  the  place  of  the  prop- 
erty which  he  received.  Hence  the  rights  of  di  bona  fide 
grantee  who  has  paid  a  full  valuable  consideration  are  pro- 
tected,'^ though  the  grantor  may  have  been  actuated  by  a 
fraudulent  intention.  Still,  as  we  have  seen,  a  grantee  is 
not  protected  when  he  has  not  paid  such  a  consideration, 
though  he  may  have  acted  in  good  faith.  The  two  must 
concur.'^  If  no  consideration  has  been  given  then  there 
has  been  no  substitution  of  property.  The  amount  of  the 
consideration  is  not  necessarily  material  when  the  grantor 
is  solvent,^  but  when  he  is  insolvent  the  kind  and  amount 
of  consideration  become  material  and  important,  even  in 
the  absence  of  actual  intent  to  defraud.  Thus  an  asrree- 
ment  to  support  an  insolvent  grantor  may  be  a  valuable 
consideration,  but  it  is  not  sufficient  to  uphold  a  convey- 
ance as  against  prior  creditors,*^  even  though  tliere  may 
have  been  no  actual  intent  to  defraud.^  Persons  receiving 
a  conveyance  from  a  grantor  for  such  a  consideration  must 


Rembert,   63   Ala.   561 ;    CoUumb    v.  *  See«   Hawkins    v.  Davis,   8   Baxt. 

Read,  24  N.  Y.  516;  Mansfield  v.  Dyer,  (Tenn.)  508. 

131  Mass.  200  ;  Comey  v.  Pickering,  63  'Savage  v.  Hazard,  11  Neb.  327; 
N.  H.  126;  Zoeller  v.  Riley,  100  N.  Y.  Danbury  v.  Robinson,  14  N.  J.  Eq. 
102;  Simpson  v.  Del  Hoyo,  94  N.  Y.  213.  See  §§15,  207.  In  Keyser  v, 
189;  Paddon  v.  Taylor,  44  N.  Y.  371  ;  Angle,  40  N.  J.  Eq.  481,  it  appeared 
Lore  V.  Dierkes,  16  A'ob.  N.  C.  (N.  Y.)  that  a  sister  purchased  land  of  a  bro- 
47.  ther  who  was  in  debt.  She  paid  $50 
'  In  Zoeller  v.  Riley,  100  N.  Y.  108,  cash  and  gave  her  note  for  $650,  which 
Earl,  J.,  said  :  "  A  debtor  may  dispose  he  held  for  four  years  though  very 
of  his  property  with  the  intent  to  de-  needy.  It  was  held  that  if  the  sister 
fraud  his  creditors  and  yet  give  a  good  had  notice  of  the  fraud  before  she  paid 
title  to  one  who  pays  value  and  has  no  the  note  she  was  not  a  bona  fiie  pur- 
knowledge  of,  and  does  not  participate  chaser,  even  though  she  had  no  notice 
in  the  fraud.  (2  R.  S.  137,  §  5 ;  Starin  when  she  took  the  deed. 
V.  Kelly,  88  N.  Y.  418;  Murphy  v,  ■*  Usher  v.  Hazeltine,  5,  Me.  471; 
Briggs,  89  N.  Y.  446;  Parker  v.  Con-  Hapgood  v.  Fisher,  34  Me.  407. 
ner,  93  N.  Y.  118.)"  '  Rollins  v.  Mooers*  25  Mc.  192-199. 

«  Webster  v.  Withey,  25  Me.. 326. 


502  BONA    FIDE    PURCHASERS.  §  369 

see  to  it  that  the  existing  debts  of  the  grantor  are  paid,^ 
and  it  is  immaterial  that  the  consideration  comprises  a 
present  sum  of  money  paid  in  addition  to  the  agreement 
for  support,  provided  the  money  alone  were  palpably  in- 
adequate.^ 

Three  things  must  concur  to  protect  the  title  of  the 
purchaser.^  (i)  He  must  buy  without  notice  of  the  bad 
intent  on  the  part  of  the  vendor.  (2)  He  must  be  a  pur- 
chaser for  a  valuable  consideration  ;  and  (3)  He  must  have 
paid  the  purchase-money  before  he  had  notice  of  the  fraud.* 
Chief-Justice  Marshall  observes  that  "the  rights  of  third 
persons,  who  are  purchasers  without  notice  for  a  valuable 
consideration,  cannot  be  disregarded.  Titles,  which,  ac- 
cording to  every  legal  test,  are  perfect,  are  acquired  with 
that  confidence  which  is  inspired  by  the  opinion  that  the 
purchaser  is  safe.  If  there  be  any  concealed  defect,  arising 
from  the  conduct  of  those  who  had  held  the  property  long 
before  he  acquired  it,  of  which  he  had  no  notice,  that  con- 
cealed defect  cannot  be  set  up  against  him.  He  has  paid 
his  money  for  a  title  good  at  law ;  he  is  innocent,  what- 
ever may  be  the  guilt  of  others,  and  equity  will  not  subject 
him  to  the  penalties  attached  to  that  guilt.  All  titles 
would  be  insecure,  and  the  intercourse  between  man  and 
man  would  be  very  seriously  obstructed  if  this  principle  be 
overturned."^  Dillon,  J.,  in  Gardner  v.  Cole,^  said  that 
''  where  the  first  conveyance  originates  in  a  fraudulent  pur- 
pose, and  is  without  any  consideration  of  value,  and  the 
grantor  remains  in  possession,  and  claiming  ownership  sells 
the  property  as  his  own  to  a  party  who  buys  without  actual 
notice  of  the  prior  deed  and  pays  value,  the  latter  pur- 


'  Hapgood  V.  Fisher,  34  Me.  407.  *  See  Arnholt  v.  Hartwig,  73  Mo. 

'  Sidensparker   v.  Sidensparker,    52  485  ;  Bishop  v.  Schneider,  46  Mo.  472  ; 

Me.  481.     See  Egery  v.  Johnson,  70  Dixon  v.  Hill,  5  Mich.  408. 

Me.  261.  *  Fletcher  v.  Peck,  6  Cranch  133. 

°  Dougherty  v.  Cooper,  yj  Mo.  532.  *  21  Iowa  205,  214. 


§37 


o 


GENERALITY    OF    THE    RULE. 


503 


chaser  may  avoid  the  prior  voluntary  and  fraudulent  con- 
veyance." ^ 

§  370.  Generality  of  the  rule. — A  court  of  equity  acts  only 
on  the  conscience  of  the  party  ;  and  if  he  has  done  nothing 
that  taints  it,  no  demand  can  attach  so  as  to  give  jurisdic- 
tion.^ The  rule  is  not  limited  to  cases  where  conveyances 
are  made  in  fraud  of  creditors,  but  applies  to  cases  in  which 
the  vendor  has  been  swindled  out  of  his  property  by  a 
vendee,  for  whenever  the  property  reaches  the  hands  of  a 
bona  fide  purchaser  for  value,  the  rights  and  equities  of  the 
defrauded  owner  are  cut  off.^  "  A  purchaser  for  a  valuable 
consideration,  without  notice  of  a  prior  equitable  right,  ob- 
taining the  legal  estate  at  the  time  of  his  purchase,  is  en- 
titled to  priority  in  equity  as  well  as  at  law,  according  to 
the  well-known  maxim  that  when  the  equities  are  equal  the 
law  shall  prevail."* 

If  creditors  condone  the  fraud  the  grantee's  title  is  good 
against  all  comers.^ 


'  See  Hurley  v.  Osier,  44  Iowa  646. 
See  note  as  to  the  rights  of  transferees 
and  others  under  conveyances  in  fraud 
of  creditors  and  of  trusts,  at  end  of  Lore 
V.  Dierkes,  16  Abb.  N.  C.  (N.  Y.)  47,  59. 

^  Boone  v.  Chiles,  10  Pet.  177.  In 
Knovvlton  v.  Hawes,  10  Neb.  534,  it 
appeared  that  a  father,  after  an  obliga- 
tion had  been  incurred,  but  before  judg- 
ment, conveyed  his  real  estate,  worth 
more  than  $5,000,  to  his  son,  who  had 
but  little  means,  for  an  expressed  con- 
sideration of  $4,900,  $300  being  paid  in 
cash,  $250  in  a  span  of  horses,  and 
$450  for  labor  alleged  to  have  been  pre- 
viously performed,  two  unsecured  notes, 
one  for  the  sum  of  $1,000,  payable  in 
two  years,  and  one  for  $2,000,  payable 
in  five  years,  and  $900  to  be  paid  in 
certain  mortgages.  It  was  held,  on  the 
testimony,  that  the  son  was  not  a  bona 
fide  purchaser  of  the  land,  and  that  it 
was  liable  for  the  payment  of  the  judg- 
ment. 


^  Paddon  v.  Taylor,  44  N.  Y.  371  ; 
Brower  v.  Peabody,  1 3  N.  Y.  1 2 1 ;  Load 
v.  Green,  15  M.  &  W.  216;  Smart  v. 
Bement,  4  Abb.  App.  Dec.  (N.  Y.)  253. 
Though  the  Rhode  Island  statute  omits 
the  provision  about  bona  fide  purchas- 
ers for  value  contained  in  the  English 
statute,  it  is  considered  that  the  statute 
should  be  construed  the  same  as  though 
that  provision  had  not  been  omitted. 
Tiernay  v.  Claflin,  15  R.  I.  220. 

•■  Townsend  v.  Little,  109  U.  S.  512. 
Citing  Williams  v.  Jackson,  107  U.  S. 
478  ;  Willoughby  v.  Willoughby,  i  T. 
R.  763;  Charlton  v.  Low,  3  P.  Wms. 
328  ;  Ex  parte  Knott,  1 1  Ves.  609  ; 
Tildesley  v.  Lodge,  3  Sm.  &  Giff.  543 ; 
Shine  v.  Gough,  i  Ball  &  B.  436 ; 
Bowen  v.  Evans,  I  Jones  &  La  T.  264  ; 
Vattier  v.  Hinde,  7  Pet.  252.  Absence 
of  good  faith  must  be  made  out  by  a 
clear  preponderance  of  evidence.  Brad- 
ford V.  Bradford,  60  Iowa  202. 

*  Millington  v.  Hill,  47  Ark.  309. 


504  MORTGAGEE. WITHOUT    NOTICE.         §§371,372 

§  371,  Mortgagee  as  bona  fide  purchaser. — A  mortgagee 
is  a  purchaser  to  the  extent  of  his  interest.^  New  York 
has  taken  an  advanced  position  on  this  question.  It  is 
held  in  that  State  that  where  property  is  conveyed  to  a 
voluntary  grantee,  and  the  latter,  at  the  grantor's  request, 
executes  a  mortgage  upon  the  land  to  a  creditor  of  the 
grantor,  to  secure  a  debt  of  the  grantor's  which  existed  at 
the  time  of  the  conveyance,  the  mortgagee  is  a  bona  fide 
purchaser  for  a  valuable  consideration,  and  though  the  con- 
veyance may  be  set  aside  by  other  creditors,  the  mortgagee 
will  not  be  affected.*^  The  giving  of  the  mortgage  was 
regarded  as  merely  applying  the  property  for  the  benefit  of 
creditors  by  rescinding  the  fraudulent  transaction,  and 
entering  into  a  new  valid  contract.  As  we  have  seen,'^ 
the  law  does  not  deprive  parties  of  the  right  to  restore  to 
its  legitimate  purposes  property  which  has  been  fraudulently 
appropriated.* 

§  372.  Without  notice. — Judge  Story  observes  that :  "  It 
is  a  settled  rule  in  equity  that  a  purchaser  without  notice, 
to  be  entitled  to  protection,  must  not  only  be  so  at  the 
time  of  the  contract  or  conveyance,  but  at  the  time  of  the 
payment  of  the  purchase-money."  ^  On  the  other  hand  it 
was  said  in  a  case  which  arose  in  Georgia  that  the  purchaser 
at  a  sale  made  with  intent  to  defraud  creditors,  if  himself 
free  from  all  responsibility  for  the  fraud,  was  not  affected 
upon  afterward  discovering  the  seller's  fraudulent  intent, 


1  Ledyard  v.  Butler,  9  Paige  (N.  Y.)  Willoughby  v.  Willoughby,  i  T.  R. 
132  ;  Murphy  v.  Briggs,  89  N.  Y.  451  ;  763  ;  Dickerson  v.  Tillinghast,  4  Paige 
Zoeller  v.  Riley,  100  N.  Y.  108.  (N.  Y.)  215  ;  Boyd  v.  Beck,  29  Ala.  713  ; 

2  Murphy  v.  Briggs,  89  N.  Y.  446.  Wells  v.  Morrow,  38  Ala.  1 25  ;  Porter 
See  upon  this  confused  question  2  Pom-  v.  Green,  4  Iowa  571. 

eroy's  Eq.  Jur.  §§  748,  749,  and  cases  ^  See  §  176. 

cited  ;  Metropolitan  Bank  v.  Godfrey,  •*  Murphy  v.  Briggs,  89  N.  Y.  446. 

23  III.  579 ;    Manhattan  Co.  v.  Evert-  But  compare  Wood   v.   Robinson,  22 

son,  6  Paige   (N.  Y.)  457  ;    Lowry  v.  N.  Y.  564. 

Smith,  9  Hun  (N.  Y.)  514;    Smart  v.  =  Wormley  v.Wormley,  8  Wheat.449. 

Bement,  4  Abb.  App.  Dec.  (N.  Y.)  253 ;  See  Arnholt  v.  Hartwig,  73  Mo.  485. 


§  2)7o  KINDS    OF    NOTICE. 


505 


even  though  he  had  not  then  paid  the  purchase-money,  and 
the  notes  given  for  it  had  not  passed  beyond  the  control  of 
himself  and  the  seller,  it  not  appearing  that  he  alone  could 
control  tiie  notes  without  the  co-operation  of  the  seller,  or 
that  the  latter  could  have  been  induced  to  cancel  or  sur- 
render the  notes,  which  were  negotiable.^  In  the  United 
States,  even  in  States  where  the  statutes  are  a  literal  rescript 
of  the  English  statutes  of  13  and  27  Elizabeth,  the  general 
doctrine  is,  that  the  right  of  the  subsequent  purchaser  to 
avoid  the  first  conveyance  will  depend  on  whether  he  had 
notice  of* its  existence  at  the  date  of  his  purchase.^  This 
leads  us  to  the  consideration  of  one  of  the  most  important 
branches  of  our  subject,  the  doctrine  of  notice  as  applied  to 
covinous  alienations. 

§  373.  Kinds  of  notice. — Notice  is  of  two  kinds,  actual 
and  constructive.^  Actual  notice  may  be  shown  to  have 
been  received  or  given  by  all  degrees  and  grades  of  evi- 
dence, from  the  most  direct  and  positive  proof  to  the 
slightest  circumstance  from  which  a  jury  would  be  war- 
ranted in  inferring  notice.  It  is  a  mere  question  of  fact, 
and  is  open  to  every  species  of  legitimate  evidence  which 
may  tend  to  strengthen  or  impair  the  conclusion.  Con- 
structive notice,  on  the  other  hand,  is  a  legal  inference  from 
established  facts  ;  and  like  other  legal  presumptions,  does 
not  admit  of  dispute."*  "  Constructive  notice,"  says  Judge 
Story,  "  is  in  its  nature  no  more  than  evidence  of  notice, 
the  presumption  of  which  is  so  v«iolcnt  that  the  court  will 
not  even  allow  of  its  being  controverted."  °     Substantially 

'  Nicol  V.  Crittenden,  55  Ga.  497.  ^  Selden,  ].,  in  Williamson  v.  Brown, 

''See  Prestidge  v.  Cooper,  54  Miss.  15   N.  Y.   359;    Griffith   v.  Griffith,   i 

77  ;  Wyman  v.  Brown,  50  Me.  148,  lays  Hoffm.  Ch.  (N.  Y.)  155  ;  Hiern  v.  Mill, 

down  the  rule,  however,  that  a  fraudu-  13  Ves.  120;  Claflin  v.  Lenheim,  66  N. 

lent  voluntary  conveyance  is  void  as  Y.  306  ;  Birdsall   v.  Russell,  29  N.  Y. 

against  a  subsequent  purchaser  even  220,  249. 

with  notice.     See  Hudnal  v.  Wilder,  4  =■  Story's  Eq.  Jur.  §  399  ;  Rogers  v. 

McCord's  (S.  C.)  Law  295.  Jones,  8  N.  H.  270;  Cambridge  Valley 

*  Lord  Erskine  in  Hiern  v.  Mill,  13  Bank  v.  Delano,  48  N.  Y.  339. 

Ves.  120. 


506  NOTICE  OF  FRAUD.  §  374 

the  same  language  is  employed  by  Mr.  Justice  Woods  in 
Townsend  v.  Little.^  Chancellor  Kent  said:  "  I  hold  him 
chargeable  with  constructive  notice,  or  notice  in  law,  be- 
cause he  had  information  sufficient  to  put  him  upon  in- 
quiry."^ "Constructive  notice,"  said  Wright,  J.,  "is  a 
legal  inference  from  established  facts  ;  and  when  the  facts 
are  not  controverted,  or  the  alleged  defect  or  infirmity  ap- 
pears on  the  face  of  the  instrument,  and  is  a  matter  of  ocu- 
lar inspection,  the  question  is  one  for  the  court." ^  Con- 
structive notice  has  been  said  to  be  of  two  kinds  ;  that 
which  arises  upon  testimony  and  that  which  results  from  a 
record.* 

Actual  notice  is  usually  a  question  for  the  jury,  and  is  to 
be  established  by  implication  or  inference  from  other  facts.^ 
There  is  no  particular  kind  of  evidence  necessary  to  estab- 
lish it ;  anything  that  proves  it  or  constitutes  legal  evidence 
of  knowledge  is  competent.^  It  is  otherwise  as  to  con- 
structive notice.  There  the  law  imputes  notice  to  the  pur- 
chaser, and  whether  or  not  this  will  be  done  upon  a  con- 
ceded state  of  facts  is  not  a  question  for  the  jury.'' 

§  374.  Constructive  notice  of  fraud. — The  principles  which 
govern  and  control  the  general  doctrine  of  constructive 
notice  of  fraud  as  bearing  upon  our  subject  are  not  always 


'  109  U.  S.   511.     Citing   Plumb  v.  the  purchaser  was,  in  fact,  entirely  in- 

Fluitt,  2  Anstr.  432  ;  Kennedy  v.  Green,  nocent  and  free  from  any  guilty  knowl- 

3  Mylne  &  K.  699.  edge,  or  even  suspicion  of  fraud  ;  but 

'  Sterry  v.  Arden,  1  Johns.  Ch.  (N.  if  they  find  that  facts  were  known  to 

Y.)  261,  267.  him  which  were  calculated  to  put  him 

s  Birdsall  v.  Russell,  29  N.  Y.  249.  on  inquiry,  his  want   of  diligence   in 

See  Page  v.  Waring,  76  N.  Y.  471.  making  such  inquiry  is  equivalent  to  a 

^  Griffith  V.  Griffith,  i  Hoffin.  Ch.  (N.  want  of  good  faith,  and  the  presump- 

Y.)  156.  tion  of  notice  is  a  legal  presumption 

*  Bradbury    v.    Falmouth,    18   Me.  which   is  uncontrovertible."     Rapallo, 
65.  J.,  in  Parker  v.  Conner,  93  N.  Y.  124. 

*  Trefts  V.  King,  18  Pa.  St.  160.  "  The  whole  basis  of  the  rule  is  negli- 
'  Birdsall  v.  Russell,  29  N.  Y.  249.  gence  in  the  purchaser.     It  is  a  ques- 

"  If  the  doctrine  of  constructive  notice  tion  of  good  faith  in  him."     Peckham, 

is  applicable,  it  is  immaterial  how  the  J.,  in  Acer  v.  Westcott,  46  N.  Y.  384, 

fact  is.     The  jury  may  be  satisfied  that  389. 


§374  NOTICE    OF    FRAUD.  507 

entirely  clear.  Williamson  v.  Brown, ^  already  cited,  con- 
tains an  important  review  of  the  authorities  by  the  learned 
Justice  Selden,  as  to  the  general  subject  of  notice.  Baker 
V.  Bliss,^  where  the  question  was  as  to  whether  or  not  a 
purchaser  took  with  knowledge  of  the  fraud  affecting  the 
title  of  his  vendor,  seems  to  clearly  establish  the  rule  that 
to  charge  a  party  with  such  notice  the  circumstances  known 
to  him  must  be  of  such  character  as  ought  reasonably  to 
have  excited  his  suspicion,  and  led  him  to  inquire."^  It  ap- 
peared that  the  purchaser  had  paid  a  valuable  consideration, 
and  had  testified  and  the  referee  had  found,  that  he  had  no 
actual  notice  or  knowledge  of  the  fraud  which  rendered  the 
conveyance  void  as  against  creditors,  "  but  that  he  had  suf- 
ficient knowledge  to  put  him  upon  inquiry,  and  that  such 
knowledge  was  equivalent  to  notice,  and  in  law  amounted 
to  constructive  notice,"  Cases  like  Williamson  v.  Brown  ^ 
are  cited  and  applied  in  the  opinion.  In  Ellis  v.  Horrman,^ 
a  record  act  case,  Tracy,  J.,  said  :  "  Notice  sufficient  to 
make  it  the  duty  of  a  purchaser  to  inquire,  and  failure  so 
to  do  when  information  is  easily  accessible,  is  equivalent  to 
actual  notice  within  the  rule  of  the  authorities."  Paige,  J., 
observed  in  Williamson  v.  Brown  :"  "  A  party  in  possession 
of  certain  information  will  be  chargeable  with  a  knowledge 
of  all  facts  which  an  inquiry  suggested  by  such  information, 
prosecuted  with  due  diligence,  would  have  disclosed  tu  him."  " 


'  15  N.  Y.  362.  Price  306  ;  Jones  v.  Smith,  i  Hare  43- 

'  39  N.  Y.  70.  55.      Compare   Pringle   v.    Phillips,    5 

^  See  Burnham  v.  Brennan,  10  J.  &  Sandf.  (N.  Y.)  157;  Danforth  v.  Dart, 

S.  (N.  Y.)  79 ;  reversed,  74  N.  Y.  597.  4  Duer  (N,  Y.)  loi  ;  Roeber  v,  Bowe, 

■»  15  N.  Y.  362.  26  Hun  (N.  Y.)  556  ;  Pitney  v.  Leonard, 

*  90  N.  Y.  473.  I  Paige  (N.  Y.)  461  ;  Peters  v.  Good- 

*  15  N.  Y.  364.  rich,  3  Conn.  146  ;  Booth  v.  Barnum,  9 
■■  See  Howard  Ins.  Co.  v.  Halsey,  4  Conn.  286 ;  Whitbread  v.  Jordan,  1  Y. 

Sandf.  (N.  Y.)  578  ;  Kennedy  v.  Green,  &  C.  328  ;  Shaw  v.  Spencer,  100  Mass. 

3  Mylne  &  K.  699;  Flagg  v.  Mann,  2  390;  Jenkins  v.  Eldredge,  3  Story  181  ; 

Sumner  534  ;    Bennett  v.  Buchan,  76  Heaton  v.  Prather,  84  111.  330  ;  Garahy 

N.  Y.    386 ;    Grimstone   v.   Carter,    3  v.  Bayley,  25  Tex.  Supp.  294  ;  Birdsall 

Paige  (N.  Y.)  421  ;  Taylor  v.  Baker,  5  v.  Russell,  29  N.  Y.  220. 


508  STEARNS    V.    GAGE.  §  375 

In  Reed  v.  Gannon^  it  appeared  that  the  parties  dealt 
upon  the  assumption  that  there  were  liens  or  incum- 
brances upon  the  property,  but  their  number,  extent,  or 
character  was  not  stated.  Rapallo,  J.,  said  :  "  The  insertion 
of  these  clauses  in  the  instrument  was  sufficient  to  put  the 
plaintiffs  on  inquiry  as  to  the  extent  and  description  of  the 
existing  incumbrances  referred  to."  It  was  such  notice  as 
in  the  language  of  the  authorities  "  would  lead  any  honest 
man,  using  ordinary  caution,  to  make  further  inquiries."" 
"  Constructive  notice,"  says  Haight,  J.,  in  Farley  v.  Car- 
penter,^ "  is  a  knowledge  of  circumstances  which  would  put 
a  careful  and  prudent  person  upon  inquiry,  or  such  acts  as 
the  law  will  presume*  the  person  had  knowledge  of,  on  the 
grounds  of  public  policy  ;  as,  for  instance,  the  laws  and 
public  acts  of  the  government,  instruments  recorded  pur- 
suant to  law,  advertisements  in  a  newspaper  of  a  notice  or 
process  authorized  by  statute."^ 

§  375.  Rule  in  Stearns  v.  Gage. — The  question  of  what 
constitutes  "  notice  "  of  fraud,  or  of  a  fraudulent  intent,  is 
one  of  manifest  importance  to  creditors  and  purchasers. 
Some  apparent  dissension  has  been  introduced  into  this 
branch  of  the  subject  by  a  dictum  of  Miller,  J.,  in  Stearns 
V.  Gage,^  followed  by  the  New  York  Supreme  Court  in 
Farley  v.  Carpenter,^  and  recently  approved  in  Parker  v. 

'  50  N.  Y.  345.     See  Parker  v.  Con-  third  persons  which  he  has  the  means 

ner,  93  N.  Y.  126.  of  discovering,  and  as  to  which  he  is 

*  Whitbread  v.  Jordan,  i  Y.  &  C.  328,  put  on  inquiry.  If  he  makes  all  the 
See  Acer  v.  Westcott,  46  N.  Y.  384 ;  inquiry  which  due  diligence  requires, 
Cambridge  Valley  Bank  v.  Delano,  48  and  still  fails  to  discover  the  outstand- 
N.  Y.  340.  Compare,  however,  Batten-  ing  right,  he  is  excused  ;  but  if  he  fails 
hausen  v.  Bullock,  11  Bradw.  (111.)  665.  to  use  due  diligence,  he  is  chargeable, 

*  27  Hun  (N.  Y.)  362,  as  matter  of  law,  with  notice  of  the 

*  "  The  doctrine  of  constructive  no-  facts  which  the  inquiry  would  have 
tice,"  says  Rapallo,  J.,  "  has  been  most  disclosed,"  Parker  v.  Conner,  93  N. 
generally  applied  to  the  examination  of  Y.  124.  See  Acer  v.  Westcott,  46  N. 
titles  to  real  estate.     It  is  the  duty  of  a  Y.  384,  and  cases  cited. 

purchaser  of  real  estate  to  investigate        °  79  N.  Y.  102. 

the  title  of  his  vendor,  and  to  take  no-         '  27  Hun  (N.  Y.)  359.     See  23  Alb. 

tice  ot  any  adverse  rights  or  equities  of    L.  J.  126. 


§  375  STEARNS    V.    GAGE.  5O9 

Conner.^  According  to  the  court's  own  statement  it  could 
not  "  be  claimed  that  any  question  as  to  constructive  notice 
was  presented  upon  the  trial"  in  Stearns  v.  Gage,  and  it 
seems  unfortunate  that  the  questionable  sentences  should 
have  been  embodied  in  the  opinion.  The  court  observe 
that  "  actual  notice  is  required  where  a  valuable  considera- 
tion has  been  paid."  The  statute  relating  to  fraudulent 
conveyances^  in  New  York  contains  a  provision  that  it 
"shall  not  be  construed  in  any  manner,  to  affect  or  impair 
the  title  of  a  purchaser  for  a  valuable  consideration,  unless 
it  shall  appear  that  such  purchaser  had  previous  notice  of 
the  fraudulent  intent  of  his  immediate  grantor,  or  of  the 
fraud  rendering  void  the  title  of  such  grantor."  The  court 
say  that  "  this  plainly  means  that  actual  notice  shall  be 
given  of  the  fraudulent  intent  or  knowledge  of  circum- 
stances which  are  equivalent  to  such  notice.  Circum- 
stances to  put  the  purchaser  on  inqtiiry  ivhere  fiill  val^ie 

has  been  paid  are  not  sufficient No  authority  has 

been  cited  which  sustains  the  principle  that  a  purchaser 
for  a  valuable  consideration,  without  previous  notice,  is 
chargeable  with  constructive  notice  of  the  fraudulent  in- 
tent of  his  grantor  ;  and  such  a  rule  would  carry  the  doc- 
trine of  constructive  notice  to  an  extent  beyond  any  prin- 
ciple which  has  been  sanctioned  by  the  courts,  and  cannot 
be  upheld." 

It  must  be  noted  that  the  word  "actual"  is  not  cm- 
bodied  in  the  statute,  but  has  been  in  effect  interpolated 
by  this  construction.  We  dissent  decidedly  from  the  state- 
ment that  the  statute  "  plainly  means  that  actual  notice 
shall  be  given  of  the  fraudulent  intent."  Such  a  construc- 
tion violates  the  settled  rule  that  statutes  of  tiiis  character 
shall  be  liberally  construed  for  the  suppression  of  fraud. ^ 
It  is  to  be  regretted  that  the  utterances  quoted  occur  in  a 
case  in  which  no  facts  sufficient  to  put  a  purchaser  on  in- 


193N.  Y.  118.  »  2  R.  S.  N.  Y.  137,  §  5.  3  See  §20. 


5IO  STEARNS    V.    GAGE.  §  375 

quiry,  or  to  constitute  what  is  often  called  constructive 
notice  of  fraud,  were  found  or  were  actually  present.  Had 
the  court  been  confronted  with  such  facts  and  compelled 
to  squarely  face  the  question,  these  remarks,  which  we  con- 
sider unfortunate,  might  never  have  been  made.  It  is  idle 
to  assail  the  case  with  violent  language,  as  has  more  than 
once  been  done  ;  but  we  should  rather  view  the  objection- 
able sentences  as  an  unguarded  utterance,  and  entertain  the 
hope  that  the  questionable  features  of  the  opinion  will  be 
hereafter  limited  and  distinguished,  and  perhaps  ultimate- 
ly overturned.  "  Knowledge  of  circumstances  which  are 
equivalent  to  "  actual  notice  are  regarded  in  the  opinion  as 
sufficient  evidence  of  notice.  This  plainly  implies  that  the 
court  does  not  mean  to  require  proof  that  as  matter  of  fact 
the  purchaser  was  informed  personally  of  the  debtor's  or 
vendor's  fraudulent  intention,  but  leaves  open  the  wide  field 
of  circumstances  by  which  actual  notice  may  be  inferred, 
implied,  and  fastened  upon  him.  In  other  words,  "cir- 
cumstantial evidence  "  will  suffice.^  In  Farley  v.  Carpen- 
ter,^ which  follows  and  adopts  Stearns  v.  Gage,^  the  court 
at  general  term  say  :  "  A  person  may  be  chargeable  with 
constructive  notice  and  still  have  no  actual  notice.  Fraud 
implies  an  evil  or  illegal  intent.  Such  intent  can  only  ex- 
ist in  case  of  knowledge.  Under  this  statute  fraud  is  not  a 
question  of  negligence,  it  is  a  question  of  knowledge  and 
intent ;  a  party  may  be  negligent  in  not  examining  the 
records  for  liens  and  incumbrances  on  real  estate  before 
effecting  a  purchase,  and  still  be  strictly  honest,  and  inno- 
cent of  fraud." 

We  deny  that  fraud  necessarily  "  implies  an  evil  or  illegal 
intent."  The  transaction  may  be  pure  and  honest  as  re- 
gards the  debtor's  mental  emotions,  or  his  belief,  or  when 
measured    by  his  standard  of  morality,  and   yet   be  pro- 


'  Farley  v.  Carpenter,  27    Hun    (N.  ^  27  Hun  (N.  Y.)  362. 

Y.)  362.  3  79  N.  Y.  102. 


/iM6^^</<^-«-^(6^^ru^        /  "irCCc^  c-(^ 


§376  STEARNS    V.    GAGE.  5II 

nounced  by  the  courts  fraudulent  and  void  in  law.  Nor 
is  fraud  always  "  a  question  of  knowledge  and  intent,"  be- 
cause, by  a  fiction  of  law,  knowledge  is  constantly  imputed 
by  statutes,  and  by  the  courts,  in  cases  where  it  does  not 
in  fact  exist,  and  no  evil  intent  is  present. 

§  376.  —  It  seems  startling  if  not  preposterous  to  say  that 
circumstances  which  ought  to  "put  the  purchaser  on  in- 
quiry" are  "not  sufficient "  to  taint  the  transaction  with 
fraud,  or  to  vvarrant  the  conclusion  that  the  vendee  is  not 
a  bona  fide  purchaser.  We  submit  that  this  statement  is 
inaccurate  and  misleading.  The  confusion  undoubtedly 
results  in  part  from  a  failure  to  distinguish  between  circum- 
stantial evidence  sufficient  to  establish  or  justify  a  finding 
of  actual  notice  of  fraud  and  facts  which  raise  the  presump- 
tion of  constructive  notice.  The  facts  and  circumstances 
sufficient  in  either  phase  of  the  question  to  establish  notice 
or  bad  faith  in  the  vendee  bear  a  close  resemblance,  if  in- 
deed they  are  not  often  identical ;  hence  the  doctrine  of 
Stearns  v.  Gage,  if  it  is  effectual  for  any  purpose,  is  to  be 
regarded  as  seriously  impeding,  if  not  breaking  the  force  of 
indicia  and  circumstances  as  evidence  of  guilty  knowledge. 
What  object  is  to  be  subserved  in  endeavoring  to  establish 
knowledge  or  notice  of  a  fraudulent  intent  by  proof  of 
surrounding  circumstances,  if  facts  sufficient  to  put  an 
honest  man  "on  inquiry"  count  for  nothing?  Are  not 
facts  manifestly  sufficient  to  excite  grave  suspicions,  at  least 
evidence  tending  to  prove  actual  notice  ?  Is  not  a  court  or 
jury  justified  in  finding  actual  notice  from  facts  which 
should  excite  inquiry  or  raise  a  presumption  of  constructive 
notice  ?  In  short  is  a  court  or  jury  justified  in  finding,  as 
matter  of  fact,  absence  of  actual  notice  in  cases  where  facts 
sufficient  to  create  a  clear  jiresumption  of  constructive 
notice  are  in  evidence?  Can  such  a  verdict  or  liiiding  be 
said  to  honestly  reflect  the  evidence  ?  It  seems  incredible 
that  a  party  whose  suspicions  concerning  the  fairness  and 


512  STEARNS    V.    GAGE.  §37^ 

good  faith  of  a  transaction  must  have  been  excited  by  the 
exceptional  and  peculiar  conduct  of  the  parties,  can  pre- 
serve the  character  of  a  bona  fide  purchaser,  either  by  list- 
less inattention  and  indifference  concerning  the  indicia  of 
fraud,  or  by  active  and  positive  efforts  to  avoid  all  knowl- 
edge of  the  true  motive  or  design  of  the  debtor.  This 
would  be  offering  a  premium  to  vendees  who  masqueraded 
as  mutes,  or  who  declined  to  use  their  eyes  and  ears  to  dis- 
cover the  fraud,  the  evidence  of  which  surrounded  them 
on  every  side.  Is  not  such  a  vendee  guilty  of  a  "fraudu- 
lent turning  away  from  knowledge"?  Must  not  a  person 
who  willfully  closes  his  eyes  to  avoid  seeing  what  he  be- 
lieves he  would  have  discovered  had  he  kept  them  open, 
be  considered  as  having  perceived  or  detected  "  what  any 
-^  man  with  his  eyes  open  would  have  seen"?^  Is  a  party 
who  has  eyes  to  be  permitted  to  say  that  he  saw  not,  and 

Y         who  has  ears  to  be  permitted  to  say  that   he  heard  not? 

^  When  the  warning  signal  has  been  sounded,  and  the  atten- 

tion of  a  party  has  been  aroused,  is  it  not  incumbent  on 
such  party  to  stay  his  hand  until  he  shall  ascertain  by  the 
requisite  inquiries  the  facts  foreshadowed  by  the  suspicious 
circumstances?^  In  Farley  v.  Carpenter^  the  purchaser 
testified  that  he  thought  something  was  up  from  the  way 
the  debtor  talked  :  "He  sent  for  me ;  he  wanted  to  sell  me 
his  farm;  I  said,  'What  is  up?'  he  said,  'You  need  not 
ask  any  questions  nor  say  anything  for  tw^o  or  three  days.'  " 
The  court  said  it  did  "not  necessarily  follow  that  he  should 
infer"  that  the  debtor  "was  designing  to  cheat  and  defraud 
his  creditors  and  flee  from  the  State."  This  case,  it  seems  to 
us,  is  squarely  opposed  to  Baker  v.  Bliss,^  and  can  scarcely 


1  De  Witt  V.  Van  Sickle,  29  N.  J.  Eq.  -  Compare    Pinckard    v.   Woods,   8 

214,     A  party  "has  no  right  to  shut  Gratt.  (Va.)  140. 

his  eyes  or  his  ears  to  the  inlet  of  in-  ^  27  Hun  (N.  Y.)  361. 

formation,  and  then  say  he  is  a  bona  fide  ■•  39  N.  Y.  70. 
purchaser  without  notice."     Burwell  v. 
Fauber,  21  Gratt.  (Va.)  463. 


§37^  STEARNS    V.    GAGE.  513 

be  reconciled  with  the  views  of  Rapallo,  J.,  in  a  case  to  be 
presently  noticed,  in  which  he  entertains  "no  doubt  that  it 
is  legitimate  for  the  jury  in  such  cases  to  consider  whether 
the  vendee  /la^  knowledge  of  facts  poinlmg  to  a  fraudzc- 
lent  intent  or  calculated  to  awakcji  siispicioji,  and  that 
actual  7iotice  of  a  fraiidulent  intent  on  the  part  of  the  ve?i- 
dor  need  not  be  established  by  direct  proof.  The  fact  of 
notice  or  knowledge  may  be  inferred  from  circuuistanccsr  ^ 
Let  the  reader  briefly  consider  this  subject  in  its  practical 
application  and  bearing.  A  debtor  contemplating  flight, 
suddenly  offers  to  sell  his  tangible  property  at  a  sacrifice 
for  cash  to  a  vendee  who  sees  in  the  transaction  the  usual 
indicia  surrounding  fraudulent  alienations,  sufficient  to  put 
a  purchaser  "  on  inquiry."  No  inquiry  is  made,  the  vendee 
takes  title  to  the  debtor's  property,  or,  more  properly  speak- 
ing, to  the  creditors'  trust  fund,-  and  provides  the  debtor 
with  its  equivalent  in  money  which  has  no  earmarks  and 
is  easily  secreted  or  dissipated,  and  the  latter  absconds. 
Here  the  vendee  has  actually  facilitated  the  consummation 
of  the  fraud  by  furnishing  the  debtor  with  a  portion  of  its 
value  in  cash  in  consideration  of  receiving  the  property  at 
a  sacrifice.^  Is  not  the  purchaser  at  least  a  qiiasi  conspir- 
ator in  such  a  case,  even  though  the  debtor  did  not  openly 
avow  his  fraudulent  purpose?  Imprudence  or  inattention 
to  the  suspicious  circumstances  may  possibly  be  overlooked, 
but  can  willful  blindness  be  pardoned?'* 


'  Parker  v.  Conner,  93  N.  Y.  124 
S.  P.  Carroll  v.  Hayward,  124  Mass.  122 
Moore  v.  Williamson,  44  N.  J.  Eq.  504 


fraudulent  intent  and  required  to  inves- 
tigate, and  on  the  trial  to  explain  or 
in  some  way  overcome  the  effect  of  the 


Bush  V.  Roberts,  11 1  N.  Y.  282.  notice  thus  given.     Purchasers,  under 
**  See   §  14 ;    Egery   v.   Johnson,    70  the   circumstances   suggested,  cannot 
Me.  261.  shut  their  eyes  and  shield  themselves 
'  Compare  Singer  v.  Jacobs,  11  Fed.  by  proof  of  the  ])nyment  of  a  consider- 
Rep.  561  ;  Clements  v.  Moore,  6  Wall,  ation.     They  further  and   perfect  the 
299.  wrongful    intent   of  the   debtor  when 
^  "  If  the  facts  and  circumstances  are  they  assist  him  to  dispose  of  his  prop- 
such  as  ought  to  have  excited  suspicion  crty."     Hcnlirh  v.   Brennan,  11   Ilun 
and  led  to  inquiry,  the  purchaser  is  re-  (N.  Y.)  195. 
garded  as  having  received  notice  of  a 
33 


514  CARROLL    V.    HAYWARD.  §  377 

Again,  suppose  a  deed  is  made  for  full  value  by  A.  to  B., 
containing  recitals  or  provisions  which  render  it  voidable  as 
to  creditors  provided  A.  is  not  solvent.  In  other  words  its 
provisions  stanip  it  as  fraudulent  in  law  or  void  against 
creditors  upon  its  face  if  A.  is  insolvent.^  The  instrument 
is  effectual  between  the  parties,^  and  is  good  against  all  the 
world  if  A.  was  solvent ;  it  is  voidable  as  matter  of  law  if 
A.  was  insolvent.  Do  not  these  recitals  cast  upon  B.  the 
duty  of  investigating  and  inquiring  as  to  the  solvency  of 
A.  ?  If  no  inquiry  is  made,  and  as  matter  of  fact  A.  is  in- 
solvent, do  not  the  recitals  of  the  instrument  then  consti- 
tute constructive  notice  to  B.  of  the  fraud  intended  by  A.  ? 
The  whole  supposition  of  the  case  is  that  B.  had  no  actual 
knowledge  or  notice  of  the  intended  fraud. 

It  is  difficult  to  assign  any  reason  why  the  doctrine  of 
constructive  notice,  if  it  has  any  application  to  our  subject 
at  all,  should  not  be  applied  in  a  case  in  which  adequate 
consideration  has  been  given.  Where  the  fraudulent  intent 
is  present,  proof  of  consideration  will  not  save  the  transac- 
tion ;  it  is  merely  a  fact,  a  piece  of  evidence,  tending  among 
other  things  to  establish  want  of  notice  ;  but  it  clearly  has 
no  such  controlling  or  overshadowing  effect,  and  bears  no 
such  strong  relation  to  the  transaction  as  to  justify  the 
court  in  disregarding,  as  the  basis  of  a  finding  of  notice, 
proof  of  facts  sufficient  to  excite  inquiry  or  suspicion,  or  to 
constitute  constructive  notice.  Indeed  actual  or  pretended 
payment  of  consideration  is  almost  a  necessary  incident  of 
a  covinous  transaction,  and  often  serves  as  a  convenient 
cover  for  fraud. 

§  377.  Carroll  v.  Hayward— Actual  belief.— This  question 
of  notice,  as  applied  to  our  subject,  has  frequently  been  up 
for  adjudication  in  Massachusetts.  "  Reasonable  cause  to 
know,"  said  Ames,  J.,  "is  evidence  having  a  tendency,  and 
generally  a  strong  tendency,  to  prove  that  the  party  in 

'  See  §§^,  10,  322.  ■'  See  Chap.  XXVI. 


§37^ 


PARKER    V.    CONNER. 


515 


question  did  know,  but  it  is  a  mistake  to  say  that  it  is  the 
same  thing  as  knowledge.  What  might  convince  one  man 
might  be  insufficient  to  satisfy  the  mind  of  another."^ 
Thus  in  an  action  for  deceit  by  false  representations  the 
scieriter  must  be  proved  and  found  as  matter  of  fact,  and  it 
is  not  enough  merely  to  prove  that  the  party  had  reason- 
able cause  to  believe  the  representation  untrue,  and  from 
that  infer  scienter  as  a  question  of  law.*  The  distinction 
between  reasonable  cause  to  believe  and  actual  belief  is 
pointed  out  in  Coburn  v.  Proctor.^ 

§  378.  Parker  v.  Conner. — The  New  York  Court  of  Ap- 
peals again  reverted  to  this  general  subject  in  Parker  v. 
Conner.^  Baker  v.  Bliss,^  and  Reed  v.  Gannon,*  are  there 
emasculated  so  that  creditors  can  draw  little  aid  or  com- 
fort from  them,  and  Stearns  v.  Gage '''  is  considered  "  suffi- 


'  Carroll  v.  Hay  ward,  127  Mass.  122. 

^  Pearson  v.  Howe,  i  Allen  (Mass.) 
207 ;  Tr)-on  v.  Whitmarsh,  i  Met. 
(Mass.)  I. 

^  15  Gray  (Mass.)  38.  The  statute 
provided  (Laws  Mass.  1856,  chap. 
284,  §  27)  that  preferential  convey- 
ances made  to  any  person  who  had 
"  reasonable  cause  to  believe  such 
debtor  insolvent,"  might  be  avoided 
by  the  assignee.  In  a  suit  brought  to 
avoid  such  a  transfer,  testimony  that 
the  defendants  believed  the  debtor  per- 
fectly solvent  was  declared  incom- 
petent. It  was  considered  that  the 
only  inquiry  which  under  the  statute 
was  relevant  to  the  issue  was  whether 
the  defendants  had  reasonable  cause 
to  believe  the  debtor  insolvent ;  that  is 
whether,  in  view  of  all  the  facts  and 
circumstances  which  were  known  to 
the  defendants  concerning  the  business 
and  pecuniary  condition  of  the  debtor 
in  connection  with  the  time  and  mode 
of  transfer  of  the  property  taken,  they 
as  reasonable  men,  acting  with  ordinary 
prudence,  sagacity,  and  discretion,  had 
good  ground  to  believe  that  the  debtor 


was  insolvent.  "  It  was  not  intended  by 
the  statute,"  said  Bigelow,  J.,  "  to  make 
the  actual  belief  of  the  party  concerning 
the  solvency  of  the  debtor  one  of  the 
standards  by  which  to  test  the  validity 
of  the  transfer  of  property  to  him. 
Such  belief  might  or  might  not  be 
well  founded.  It  would  he  an  uncer- 
tain and  fluctuating  standard.  That 
which  would  satisfy  the  mind  of  one 
man  would  be  wholly  insufficient  to  con- 
vince another;  and  those  facts  which 
would  fall  far  short  of  producing  a  be- 
lief in  a  person  who  was  disinterested 
and  impartial  might  have  a  very  differ- 
ent effect  upon  the  same  person  when 
acting  under  the  strong  influence  of 
self-interest."  Coburn  v.  Proctor,  15 
Gray  (Mass.)  38. 

*  93  N.  Y.  118  ;  S.  C.  45  Am.  Rep. 
178.  See  especially  the  learned  note 
by  Irving  Browne,  Esq.,  in  which  many 
of  the  cases  here  cited  are  discussed. 
See  29  Alb.  L.  J.  244;  Bush  v.  Rob- 
erts, III  N.  Y.  282. 

'  39  N.  Y.  70. 

«  50  N.  Y.  345. 

^  79  N.  Y.  102. 


5l6  PARKER    V.    CONNER.  §  378 

cicnt  to  dispose  of  the  present  controversy."  Rapallo,  J., 
one  of  the  ablest  judges  and  clearest  writers  in  the  court, 
said  :  "  We  think  that  in  cases  like  the  present,  where  an 
intent  to  defraud  creditors  is  alleged,  the  question  to  be 
submitted  to  the  jury  should  be  whether  the  vendee  did  in 
fact  know  or  believe  that  the  vendor  intended  to  defraud 
his  creditors,  not  whether  he   was  negligent  in  failing  to 

discover  the  fraudulent  intent The  vendor's  title 

and  legal  right  of  disposition  are  unquestioned,  and  the 
ground  upon  which  the  transfer  is  impeached  is  not  any 
defect  in  the  chain  of  title,  but  that  the  vendor's  motive  in 
selling  was  to  hinder,  delay,  or  defraud  his  own  creditors. 
In  such  a  case  there  is  no  duty  of  active  vigilance  cast 
upon  the  purchaser,  for  the  benefit  of  creditors  of  the 
vendor,  which  should  require  him  to  suspect  and  investi- 
gate the  motives  of  the  vendor.  If  he  knows  or  believes 
them  to  be  fraudulent,  he  has  no  right  to  aid  the  vendor 
in  his  fraudulent  scheme,  and  by  so  doing  he  makes  him- 
self a  party  to  the  fraud.  But  fraud  should  not  be  imputed 
by  the  application  of  the  strict  rules  of  constructive  notice 
in  such  a  case,  and  actual  good  faith  should  be  sufficient 
to  protect  the  purchaser."  It  will  thus  be  seen  that  the 
dictum  of  Stearns  v.  Gage  is  adopted  in  a  qualified  sense. 
We  respectfully  urge  that  the  proposed  test,  Did  the  vendee 
"  in  fact  know  or  believe  that  the  vendor  intended  to  de- 
fraud his  creditors  "  ?  is  limited,  loose,  uncertain,  and  un- 
satisfactory. The  court  proceed  to  state  that  on  general 
principles,  independent  of  the  statute,  the  same  rules  are 
applicable  in  such  cases  as  govern  in  determining  the  bona 
fides  of  commercial  paper,  viz.  :  not  whether  the  holder 
took  the  bill  or  note  without  exercising  sufficient  pru- 
dence and  care,  but  whether  it  came  into  his  hands  under 
such  circumstances  as  to  charge  him  with  receivnig  it 
mala  fide,  and  that  unless  he  is  fairly  chargeable  with 
notice  of  the  fraud,  even  neg'lisrence   will   not   defeat   his 


§379  FACTS    TO    EXCITE    INQUIRY.  517 

title.^  While  conceding  that  there  is  some  plausibiHty  in  the 
reasons  assigned  for  the  non-application  of  the  doctrine  of 
constructive  notice  to  fraudulent  transfers,  we  bow  to  these 
decisions  of  the  highest  court  of  a  great  State  with  hesi- 
tation and  reluctance.  The  great  embarrassments  under 
which  creditors  labor  in  overcoming  the  presumptions  of 
legality  and  good  faith  which  ordinarily  inhere  in  all  alien- 
ations and  transactions  of  the  debtor  have  already  been  con- 
sidered.^ Proof  of  fraud  is  usually  an  herculean  task,  and 
creditors  should  not  consent  without  a  strusforle  to  be  di- 
vested  of  so  important  and  useful  a  factor  in  their  litiga- 
tions as  the  doctrine  of  constructive  notice  of  fraud  would 
be  likely  to  prove.  Before  further  discussing  in  the  abstract 
what  we  consider  the  objections  to  the  principles  embodied 
in  these  cases  we  will  glance  at  the  many  authorities  which 
tend  at  least  to  establish  a  more  favorable  rule  for  the  cred- 
itor class. 

§  379-  Facts  sufficient  to  excite  inquiry. — Let  us  notice  the 
cases.  In  Bartles  v.  Gibson,^  Bunn,  J.,  with  whom  Harlan, 
J.,  of  the  United  States  Supreme  Court,  concurred,  said  : 
"  The  defendant  testified  that  he  knew  that  his  brother  was 
in  some  difficulty,  and  that  the  trouble  was  of  a  financial 
character.     Whether  he  knew  all  or  not,  he  knew  enough 

to  put  him  upon  inquiry If  he  had  knowledge  of 

facts  sufficient  to  excite  the  suspicions  of  a  prudent  man 
and  put  him  on  inquiry,  he  made  himself  a  party  to  the 
fraud" *     Chancellor  Zabriskie,  after  stating  that  if  the 

'  See  this  rule  applied  to  commer-  ^  See  §§  5,  6,  7,  8,  244,  271. 

cial  paper.     Crook  v.  Jadis,  5  Barn.  &  ^17  Fed.  Rep.  297 ;  Bedford  v.  Penny, 

Adol.  909;  Backhouse  v.  Harrison,  5  58  Mich.  424. 

Barn.  &  Adol.  1098  ;  Goodman  v.  Har-  •*  Citing  Atwood  v.  Impson,  20  N.  J. 

vey,   4   Adol.    &   El.  870;    Magee   v.  Eq.  156;  Baker  v.  Bliss,  39  N.  Y.  70; 

Badger,  34  N.  Y,  247  ;  Belmont  Branch  Avery  v.  Johann,  27  Wis.  251  ;  Kerr  on 

Bank  v.  Hoge,  35  N.  Y.  65,  overruling  Fraud,  236  ;  David  v.  Birchard,  53  Wis. 

Pringle   v.    Phillips,    5    Sandf.    (N.  Y.)  492 ;  s.  C.  10  N.  W.  Rep.  557.     See 

157  ;  Danforth  v.  Dart,  4  Duer  (N.  Y.)  Zimmerman  v.  Heinrichs,  43  Iowa  260  ; 

loi.     See  Parker  v.  Conner,  93  N.  Y.  Coolidge  v.  Heneky,  11  Ore.  327.     In 

128.  Williamson  v.  Brown,  15  N.  Y.  362,  an 


5l8  FACTS    TO    EXCITE    INQUIRY.  §  379 

object  of  a  debtor  in  making  an  alienation  is  to  hinder  and 
delay  any  of  his  creditors,  the  transaction  may  be  avoided, 
if  made  to  any  one  having  knowledge  of  the  intent,  con- 
tinues :  "  This  knowledge  need  not  be  by  actual  positive 
information  or  notice,  but  will  be  inferred  from  the  knowl- 
edge by  the  purchaser  of  facts  and  circumstances  sufficient 
to  raise  such  suspicions  as  to  put  him  upon  inquiry."^  In 
Singer  v.  Jacobs^  the  court  adopt  the  summary  of  Mr. 
Bigelow^  as  follows  :  "  If  facts  are  brought  to  the  knowl- 
edge of  a  party  which  would  put  him  as  a  man  of  common 
sagacity  upon  inquiry,  he  is  bound  to  inquire,^  and  if  he 
neglects  to  do  so,  he  will  be  chargeable  with  notice  of  what 
he  might  have  learned  upon  examination If,  how- 
ever, there  be  no  fraudulent  turning  away  from  knowledge 
which  the  res  gestce  would  suggest  to  a  prudent  mind  ;  if 
mere  want  of  caution,  as  distinguished  from  fraudulent  or 
willful  blindness,  is  all  that  can  be  imputed  to  a  purchaser 
of  property,  the  doctrine  of  constructive  notice  will  not 
apply  to  him."  In  Wilson  v.  Prewett,^  a  suit  brought  to 
annul  an  ante-nuptial  settlement,  Woods,  J.,  said  :  "Actual 
knowledge  of  the  fraudulent  intent  is  not  necessary.  A 
knowledge  of  facts  sufficient  to  excite  the  suspicions  of  a 
prudent  man  or  woman,  and  to  put  him  or  her  on  inquiry, 


important  and  leading  case,  Selden,  J.,  '  Atwood  v.  Impson,  20  N.  J.  Eq. 

lays  down  the  rule  that  "  where  a  pur-  1 56.     See  De  Witt  v.  Van  Sickle,  29 

chaser  has  knowledge  of  any  fact  suffi-  N.  J.  Eq.  214  ;  Magniac  v.  Thompson, 

cient  to  put  him  on  inquiry  as  to  the  7  Pet.  393  ;  Millholland  v.  Tiflfany,  4 

existence  of  some  right  or  title  in  con-  East.  Rep.  214;  The  Holladay  Case, 

flict  with  that  he  is  about  to  purchase,  27  Fed.  Rep,  830 ;  Clements  v.  Moore, 

he  is  presumed  either  to  have  made  the  6  Wall.  312;    Kitch  v.  St.  Louis,  K. 

inquiry  and  ascertained  the  extent  of  C.  &  N.  Ry.  Co.,  69  Mo.  224 ;  Gollober 

such  prior  right,  or  to  have  been  guilty  v.  Martin,  33  Kans.  255. 

of  a  degree  of  negligence  equally  fatal  *  11  Fed.  Rep.  361. 

to  his  claim,  to  be  considered  as  a  bona  ^  Bigelow  on  Frauds,  pp.  288-9. 

yf^^  purchaser."     See  Hinde  v.  Vattier,  ^  Compare     Cowling    v.    Estes,    15 

I  McLean  no;  Nantz  v.  McPherson,  7  Bradw.  (111.)  260. 

Hon.  (Ky.)  599 ;  Cotton  v.  Hart,  i  A.  ^3  Woods  641. 
K.  Mar.  (Ky.)  56  ;  Hawley  v.  Cramer, 
4  Cow.  (N.  Y.)  718. 


§  S^O  FACTS    TO    EXCITE    INQUIRY.  519 

amounts  to  notice,  and  is  equivalent  to  actual  knowledge 
in  contemplation  of  law.^  It  has  even  been  held  that  the 
means  of  knowledge,  by  the  use  of  ordinary  diligence, 
amounts  to  notice."  ^  The  judgment  in  this  case  was  re- 
versed,^ but  upon  the  very  excellent  ground  that  the  knowl- 
edge of  the  facts  which  the  wife  possessed  "  rather  dispelled 
than  created  any  suspicion  that  the  husband  had  a  design 
to  defraud  his  creditors."  In  Kansas  the  court  say  :  "  If 
the  facts  brought  to  his  attention  are  such  as  to  awaken 
suspicion,  and  lead  a  man  of  ordinary  prudence  to  make 
inquiry,  he  is  chargeable  with  notice  of  the  fraudulent  in- 
tent, and  with  participation  in  the  fraud."'*  In  Bush  v. 
Roberts,^  Gray,  J.,  observed :  "  The  action  could  only 
prevail  by  proof  "  that  the  purchaser  "  had  actual  notice  of 
a  fraudulent  motive"  on  the  part  of  the  seller  "or  knowl- 
edge of  circumstances  which  was  equivalent  to  such  notice. 
If  he  knew,  or  had  believed  the  motives  of  his  vendor  to 
be  fraudulent,  then,  by  aiding  him  in  his  scheme,  he  made 
himself  a  party  to  the  fraud.^  But  no  evidence  is  compe- 
tent proof  to  affect  him,  or  his  right  to  the  possession  of 
his  property,  which  falls  short  of  proving  the  nature  of  the 
transaction,  and  of  illustrating  the  guilty  participation  of 
the  vendee." 

§  380.  —  Swayne,  J.,  in  delivering  the  opinion  of  the 
United  States  Supreme  Court,  said  :  "A  sale  may  be  void 
for  bad  faith,  though  the  buyer  pays  the  full  value  of  the 
property  bought.  This  is  the  consequence,  where  his  pur- 
pose is  to  aid  the  seller  in  perpetrating  a  fraud  upon  his 
creditors,  and  where  he  buys  recklessly  with  guilty  knowl- 


'  Citing  Atwood  v.  Impson,  20  N.  J.        '-'  Citing  Farmers'  Bank  v.  Douglass, 

Eq.  150;  Tantum  v.  Green,  20  N.  J.  19  Miss.  469. 

Eq.  364  ;  Jaclcson  v.  Mather,  7  Cow.         =  Prewit  v.  Wilson,  103  U.  S.  22. 
(N.Y.)  301  ;  Smitii  v.  Henry,  2  Bailey's         ••  GoUober  v.  Martin,  33  Kans.  255. 
(S.  C.)  Law  n8  ;  Mills  v.  Howeth,  19        »  in  N.  Y.  282. 
Tex.  257.  '  Citing  Parker  v.  Conner,  93  N.  Y. 

118. 


520  FACTS    TO    EXCITE    INQUIRY.  §  380 

edge."^  In  a  controversy  in  Alabama^  it  is  said  that  "  par- 
ticipation by  the  grantee  may  be  proved  by  any  circum- 
stances sufficient  to  charge  his  conscience  with  knowledge 
or  notice  of  the  fraudulent  designs  of  the  grantor."^  •  In  a 
recent  Maryland  case  this  language  occurs:  "All  that  was 
necessary  to  make  him  take  subject  to  the  fraud  was  suffi- 
cient knowledge  of  the  suspicious  circumstances  to  put  him 
on  inquiry."*  In  David  v.  Birchard,^  where  a  mortgage 
was  attacked,  the  court  say  that  "  this  knowledge  need  not 
be  actual  positive  information  or  notice,  but  may  be  inferred 
from  the  knowledge  of  the  mortgagee  of  facts  and  circum- 
stances sufficient  to  raise  such  suspicions  as  should  put  him 
on  inquiry."  In  De  Witt  v.  Van  Sickle^  the  court  observed  : 
"A  person  who  deals  in  the  avails  of  a  scheme  to  defraud 
creditors,  to  keep  what  he  gets,  must  not  only  pay  for  it, 
but  he  must  be  innocent  of  any  purpose  to  further  the 
fraud,  even  to  protect  himself.  Actual  notice  need  not  be 
shown.  If  the  purchaser  has  before  him,  at  the  time  of  his 
purchase,  facts  and  circumstances  from  which  a  fraudulent 
intent,  either  past  or  present,  on  the  part  of  the  vendor,  is 
a  natural  and  legal  inference,  or  such  facts  or  circumstances 
of  suspicion  as  would  naturally  prompt  a  prudent  mind  to 
further  inquiry  and  examination,  which,  if  pursued,  would 
lead  necessarily  to  a  discovery  of  the  corrupting  facts,  he  is 
chargeable  with  notice."'''  In  Prewit  v.  Wilson^  the  court 
observed  that  the  grantee  to  vitiate  the  transfer  "  must  be 
chargeable  with  knowledge  of  the  intention  of  the  grantor"; 
not  that  explicit  and  direct  proof  of  actual  knowledge  must 


'Clements  v,  Moore,  6   Wall.  312.  *  Biddinger  v.  Wiland,  67  Md.  362. 

Compare  Howe  Machine  Co.  v.  Clay-  ^  53  Wis.  495.     See  Millholland  v, 

bourn,  6  Fed.  Rep.  442.  Tiffany,  4  East.  Rep.  214  ;   Green  v. 

'^  Hoyt  &  Bros.  Manuf.  Co.  v.  Tur-  Early,  39  Md.  225  ;  Thompson  v.  Duff; 

ner,  84  Ala.  528.  19  Bradvv.  (111.)  78. 

'^  See  Hooser  v.  Hunt,  65  Wis.  71,  79,  ^29  N.  J.  Eq.  215. 

declining  to  follow  Stearns  v.  Gage,  79  "^  Citing  Tantum  v.  Green,  21  N.  J. 

N.  Y.  102,  and  Parker  v.  Conner,  93  Eq.  364. 

N.Y.I  18.  ''103U.  S.  24. 


§381  FACTS    TO    EXCITE    INQUIRY.  52 1 

be  adduced.  In  Hopkins  v.  Langton/  Chief-Justice  Dixon 
said  :  "  Knowledge  by  the  vendee  of  the  fraudulent  intent, 
or  the  existence  within  his  knowledge  of  other  facts  and 
circumstances  naturally  and  justly  calculated  to  awaken 
suspicion  of  it  in  the  mind  of  a  man  of  ordinary  care  and 
prudence,  thus  making  it  his  duty  to  pause  and  inquire, 
and  a  wrong  on  his  part  not  to  do  so,  before  consummating 
the  purchase,  is  essential  in  order  to  charge  the  vendee. 
.....  The  vendee  cannot  shut  his  eyes,  but  must  look 
about  him  and  inquire.'"^  "  Whatever  is  notice  enough  to 
excite  attention  and  put  the  party  on  his  guard,  and  call 
for  inquiry,  is  also  notice  of  everything  to  which  it  is  after- 
wards found  that  such  inquiry  might  have  led.  When  a 
person  has  sufficient  information  to  lead  him  to  a  fact,  he 
shall  be  deemed  conversant  with  it."^  There  must  be  some 
reason  to  awaken  inquiry  and  direct  diligence  in  the  chan- 
nel in  which  it  would  be  successful.  That  is  what  is  meant 
by  reasonable  diligence.^  "The  presumption  is  that  if  the 
party  affected  by  any  fraudulent  transaction  or  management 
might,  with  ordinary  care  and  attention,  have  seasonably 
detected  it,  he  seasonably  had  actual  knowledge  of  it.""* 

§381.  —  "Means  of  knowledge  are  the  same  thing  in 
effect  as  knowledge  itself,"*^  and  "are  equivalent  to  actual 
knowledge,"^  is    the  language  employed    in  some  of  the 

'  30  Wis.  381.  to    elucidate    its   error."     Hopkins  v. 

-  In  this  same  case  the  court  had  in-  Langton,  30  Wis.  382,  383. 

structed  the  jury  that  in  order  to  affect  ^  Kennedy  v.  Green,   3   Myl.  &  K. 

the  parties  with  notice  of  a  fraudulent  719;   adopted  in  Wood  v.  Carpenter, 

intent,  so  as  to  avoid  the  sale,  they  loi  U.  S.  141. 

must  have  "  had  iefore  t/icm"  aX\\\t  ••  Maule   v.    Rider,    59    Pa.    St.    171. 

time  the  goods  were  purchased  "good  See  Wilson  v.  Hunter,  30  Ind.  472  ; 

and  substantial  evidefice  of  it,  such  as  Cambridge  Valley  Bank  v.  Delano,  48 

sends  conviction  home  to  the  mind  and  N.  Y.  336,  339,  340. 

estadlishes  a  well-founded  belief ;  noth-  ^  Angell  on  Limitations,  §  1S7,  and 

ing  short  of  this  ivould  be  sufficient  to  note. 

charge  them  with  knowledge."     The  *  Wood  v.  Carpenter,  loi   U.  S.  135, 

court  above   said,  "A  proposition  so  143.     See  Kurtz  v.  Miller,  26  Kan.  319. 

wide  from  the  true  rule  of  law  govern-  '  Dannmeyer  v.  Coleman,  8  Sawyer 

ing  in  such  case  requires  no  argument  51,  58.    Citing  Manning  v.  San  Jacinto 


522  FACTS    TO    EXCITE    INQUIRY.  §  3^1 

cases.  As  applied  to  our  subject  at  least,  it  is  conceded 
that  these  statements  are  inaccurate,  for  guilty  knowledge 
would  of  course  defeat  the  purchaser's  title,  while  the 
means  of  knowledge  would  not  have  that  effect  unless  the 
duty  to  inquire  was  cast  upon  him.  Again,  while  a  pref- 
erence would  not  be  avoided  under  the  late  bankrupt  act, 
by  reason  of  a  mere  suspicion  of  the  debtor's  insolvency  in 
the  mind  of  the  creditor,  yet  knowledge  of  facts  calculated 
to  produce  such  a  belief  in  the  mind  of  an  ordinarily  intelli- 
gent man  would  avoid  the  security.^ 

It  may  be  urged  that  some  of  the  citations  given  are 
from  cases  in  other  branches  of  the  law  than  that  govern- 
ing fraudulent  transfers.  This  may  be  true  as  to  a  few  of 
the  citations,  but  the  mass  of  the  authorities  collated  di- 
rectly involved  the  question  of  notice  of  a  fraud  in  an  alien- 
ation made  to  defeat  creditors.  It  is  submitted  that  in  no 
department  of  the  law  is  there  greater  need  for  increased 
facilities  to  detect  and  unearth  fraud  than  in  that  regulating 
covinous  alienations,  and  therefore  the  cases  illustrating 
other  branches  of  the  law  are  not  irrelevant.  Clearly  the 
dictum  of  Miller,  J.,  already  quoted,  that  "circumstances 
to  put  the  purchaser  on  inquiry  where  full  value  has  been 
paid  are  not  sufficient"  notice  of  fraud,  cannot  be  sup- 
ported or  recognized  as  against  this  multitude  of  au- 
thorities. 

If  the  creditor  is  to  be  divested  of  the  benefits  of  the 
doctrine  of  constructive  notice,  as  the  cases  cited  seem  to 
indicate,  then  we  contend  that  facts  sufficient  to  excite 
inquiry  or  to  put  a  prudent  man  upon  his  guard  should 
raise    a    presumption   of   guilty  knowledge   or   constitute 


Tin  Co.,  7  Sawyer  418;   New  Albany  82;   Barbour  v.  Priest,  103  U.  S.  297. 

V.  Burke,   11   Wall.    107;    Broderick's  See  Stucky  v.  Masonic  Sav.  Bank,  108 

Will,   21    Wall,  518,   519;    Ashhurst's  U.  S.  75;    Swan  v.  Robinson,  5  Fed, 

Appeal,  60  Pa.  St.  290;  Wood  v.  Car-  Rep,  294;    Reber  v.  Gundy,  13  Fed. 

penter,  loi  U.  S.  141.  Rep,  56;    May  v,   Le  Claire,  18  Fed, 

'  Grant  v.  National  Bank,  97  U,  S.  Rep,  164, 


§  3^2  ACTUAL    BELIEF.  523 

prima  facie  proof  of  actual  notice  of  the  fraudulent  design, 
which,  in  the  absence  of  satisfactory  explanation,  should 
be  conclusive.  Constructive  notice  in  this  connection  may 
be  likened  to  the  rule  still  prevailing  in  some  States,  to  the 
effect  that  a  failure  to  effect  a  change  of  possession  on  a 
sale  of  personalty  is  conclusively  presumed  to  be  fraudulent 
as  to  creditors.  The  doctrine  which  we  advance  is  akin  to 
the  common  and  generally  prevalent  doctrine  that  con- 
tinued possession  on  the  part  of  the  vendor  is  prhna  facie 
fraudulent,  that  is,  raises  a  presumption  which  may  be  ex- 
plained or  rebutted.^ 

§  382.  Actual  belief. — There  is  another  view,  already  out- 
lined in  part,  to  be  taken  of  this  question.  In  New  York 
fraud,  in  cases  of  alienations  to  defeat  creditors,  is  "  deemed 
a  question  of  fact  and  not  of  law."^  In  Coleman  v.  Burr' 
the  claim  was  made  that  there  was  no  finding  by  the  referee 
of  a  fraudulent  intent ;  but  that  on  the  contrary  he  had 
found  the  whole  transaction  to  be  fair  and  honest.  The 
court,  however,  observed  that  as  the  referee  has  "  found 
facts  from  which  the  inference  of  fraud  is  inevitable,  and 
although  he  has  characterized  the  transactions  as  honest 
and  fair,  that  does  not  make  them  innocent  nor  change 
their  essential  character  in  the  eye  of  the  law."  The  as- 
signor "  must  be  deemed  to  have  intended  the  natural  and 
inevitable  consequences  of  his  acts,  and  that  was  to  hinder, 
delay,  and  defraud  his  creditors."  There  is  nothing  novel 
or  unusual  in  this  case.  The  principle  it  enforces  is  founded 
in  public  policy,  and  is  very  frequently  applied.''  It  will  be 
seen  at  a  glance  that  under  this  rule  a  fraudulent  intention 
can  be  conclusively  fastened  upon  the  debtor  when  no  such 
wrongful  motive  was  present  in  his  mimi,  and  he  was  as  free 
from  the  design  to  defraud  as  our  first  parents  were  of  knowl- 
edge of  sin  before  tasting  the  forbidden  fruit.    I-'rom  tlie  ne- 


'  See  Chap.  XVIL  =93  N.  Y.  31. 

2  2  N.  Y.  R.  S.  137,  §  4.  ■•  See  §§  8.  9. 


524  PURCHASER    WITH    NOTICE.  §  383 

cessity  of  the  case  the  substituted  fraudulent  intent  prevails, 
because  experience  from  which  the  rule  springs  has  shown 
that  transactions  where  this  presumption  obtains,  hinder 
and  defraud  creditors  in  enforcing  payment  of  their  claims. 
The  difficulty  of  proving  other  than  by  circumstantial  evi- 
dence, that  a  vendee  had  actual  knowledge  of  the  vendor's 
fraud,  or  participated  therein,  is  manifest.^  The  law  labels 
certain  facts  and  combinations  of  circumstances  as  beins: 
sufficient  to  excite  inquiry  and  suspicion  on  the  part  of  a 
purchaser,  and  supplements  this  by  asserting  that  in  certain 
cases  means  of  knowledge  are  the  same  thing  as  knowledge 
itself.^  The  principle  of  imputing  a  fraudulent  intent  to  an 
innocent  debtor  is  frequently  invoked.  Is  there  any  leo;al 
absurdity  or  moral  wrong  in  imputing  it  to  a  vendee  ?  Do 
not  the  necessities  of  the  case  often  demand  it?'^  It  is  re- 
spectfully contended  that  the  test,  "  whether  the  vendee 
did  in  fact  know  or  believe  that  the  vendor  intended  to 
defraud  his  creditors,""*  would  furnish  a  very  uncertain  and 
fluctuating  standard,  and  would  not  in  fact  constitute  a 
general  rule  of  any  utility.  The  intellectual  and  moral 
perceptions  are  stronger  or  weaker  in  different  men,  accord- 
ing to  their  natures  and  education,  and  a  man  morally  ob- 
tuse might  look  upon  a  transaction  as  honest  which  to  the 
average  person  would  appear  to  be  manifestly  unfair  or 
fraudulent.  We  have  seen  that  a  man  may  commit  a  fraud 
without  believing  it  to  be  a  fraud. ^ 

§  383.  Purchaser  with  notice. — It  is  manifest  that  one  pur- 
chasing of  the  fraudulent  grantee,  with  notice  of  the  prior 
fraud,  takes  the  title  subject  to  all  the  infirmities  with 
which  it  was  affected  in  the  hands  of  his  grantor.  To  hold 
otherwise  would  be  equivalent  to  saying  that  three  conspir- 
ing together  might  accomplish  a  fraud  which  would  be  im- 


'  See  §§  5,  6.  2  See  §§  9,  10. 

-  Wood  V.  Carpenter,  loi  U.  S.  135,         *  Parker  v.  Conner,  93  N.  Y.  118,  126. 
143.  '  See  §  8. 


§§  2,84,  385  PURCHASER    WITH    NOTICE. 


D-D 


possible  to  two.^     Purchasers  pe7iclente  lite  are  bound  by 
the  result  of  the  litigation.''^ 

§  384.  Purchaser  with  notice  from  bona  fide  purchaser. — 
It  is  a  well-settled  rule  in  equity  that  a  purchaser  with 
notice  himself  from  a  bona  fide  purchaser  for  a  valuable 
consideration,  who  bought  without  notice,  may  protect 
himself  under  the  first  purchaser.^  The  only  exception  to 
this  rule  is  where  the  estate  becomes  revested  in  the  origi- 
nal party  to  the  fraud,  in  which  case  the  original  equity 
will  re-attach  to  it  in  his  hands."*  A  volunteer  with  notice, 
who  derives  his  title  from  a  bona  fide  purchaser  for  value 
without  notice,  is  unaffected  by  the  fraudulent  character  of 
the  original  transaction.  This  is  necessarily  the  case  ;  other- 
wise the  party  holding  the  perfect  title  might  be  unable  to 
dispose  of  it,  and  its  value  would  be  greatly  impaired.  The 
party  purchasing  with  notice  recovers  in  the  right  of  his 
vendor.^ 

§  385.  Fraudulent  grantee  as  trustee. — Elliott,  J.,  ob- 
served in  a  recent  case  in  the  Supreme  Court  of  Indiana. 
that  "where  property  is  fraudulently  conveyed,  the  grantee 
holds  it  as  trustee  for  the  creditors  of  the  grantor." ''  In 
Blair  V.  Smith '' the  court  said:  "Mrs.  Smith  received  the 
money  as  trustee,  and  as  such  must  account  for  it.  If  she 
had  received  a  stock  of  goods  from  her  husband  pursuant 
to  a  corrupt  scheme  to  defraud  his  creditors,  she  certainly 
could  have  been  charged  as  trustee.  The  fact  that  she  re- 
ceived one  species  of  property  rather  than  another  can  make 
no  difference.     The  governing  principle  is  the    same,  no 


'  Wilcoxen  v.  Morgan,  2  Col.  478.  Piatt,  3  How.  401  ;  Johnson  v.  Gibson, 

5  Tilton   V.    Cofield,  93   U.  S.   168;  116111.294. 

Allen  V.  Halliday,  28  Fed.  Rep.  263.  '  See  Fulton  v.  Woodman,  54  Miss. 

'Allison  V.   Hagan,  12  Nev.  55;   2  158;  Goshorn  v.  Snodgrass,  17  \V.  Va. 

Fonb.    Eq.    149;     i    Story's    Eq.   Jur.  717. 

409.  "  Buck  V.  Voreis,  89  liid.  117;  Blair 

■*  I  Story's  Eq.  Jur.  §410;  Church  v.  v.  Smith,  114  Ind.  125. 

Church,  25  Pa.  St.  278.     See  Oliver  v.  '114  Ind.  114,  125. 


526  TITLE    FROM    FRAUDULENT    VENDEE.  §  386 

matter  what  kind  of  property  the  fraudulent  participant 
in  the  positive  wrong  receives.  Mr.  Pomeroy  asserts,  wliat 
is  well  known  to  be  the  law,  that  a  fraudulent  grantee  takes 
as  trustee,  and  says  :  '  The  lien  upon  the  original  articles 
will  extend  to  the  resulting  fund  or  the  substituted  goods.' "  ^ 

§  386.  Title  from  fraudulent  vendee. — It  was  at  one  time 
sought  to  establish  the  rule,  at  least  in  some  of  the  author- 
ities, that  a  bona  fide  purchaser  from  a  fraudulent  grantee, 
was  not  entitled  to  protection  against  the  claims  of  the 
creditors  of  the  fraudulent  grantor.^  The  argument  in  sup- 
port of  this  doctrine  was  to  the  effect  that  by  the  very  terms 
of  the  statute  against  fraudulent  transfers,  the  conveyance 
was  pronounced  utterly  void,  frustrate,  and  of  no  effect, 
and  consequently  a  subsequent  conveyance  from  the  fraud- 
ulent grantee  could  have  no  foundation  on  which  to  rest. 
So,  also,  it  was  contended  that  it  was  against  the  policy  of 
the  statute  to  afford  protection  to  a  subsequent  purchaser 
from  the  fraudulent  grantee,  though  he  parted  with  value, 
in  ignorance  of  any  infirmity  in  the  title  he  was  acquiring. 
Quoting  the  words  of  Chancellor  Kent:  "Though  the 
debtor  himself  may  fraudulently,  on  his  own  part,  convey 
to  a  bona  fide  purchaser,  for  a  valuable  consideration,  yet 
his  fraudulent  grantee  cannot ;  for  it  is  understood  that  the 
proviso  in  the  13  Eliz.  does  not  extend  to  such  subsequent 
conveyance.  The  policy  of  that  act  would  be  defeated  by 
such  extension.  Its  object  was  to  secure  creditors  from 
being  defrauded  by  the  debtor ;  and  the  danger  was,  not 
that  he  would  honestly  sell  for  a  fair  price,  but  that  he 
would  fraudulently  convey,  upon  a  secret  trust  between 
him  and  the  grantee,  at  the  expense  of  the  creditors.  If 
the  debtor  sells,  himself,  in  a  case  where  the  creditor  has  no 


'  Citing  Pomeroy 's  Equity  Jur.,  vol.  527,  note  ;  Hoke  v.  Henderson,  3  Dev. 

3,  §  1291.  (N.  C.)  Law  12;  Thames  v.  Rembert, 

'^  Roberts  v.  Anderson,  3  Johns.  Ch.  63  Ala.  570. 
(N.  Y.)  371 ;  Preston  v.  Crofut,  Conn. 


§3^7  FRAUDULENT    GRANTEE.  527 

lien,  and  sells  for  a  valuable  consideration,  he  acquires 
means  to  discharge  his  debts ;  and  it  may  be  presumed  he 
will  so  apply  them.  If  his  fraudulent  grantee  be  enabled 
to  sell,  the  grantor  cannot  call  those  proceeds  out  of  his 
hands,  and  the  grantee  can  either  appropriate  them  to  his 
own  use,  or  to  the  secret  trusts  upon  which  the  fraudulent 
conveyance  was  made.  There  is  more  danger  of  abuse, 
and  that  the  object  of  the  statute  would  be  defeated,  in  the 
one  case  than  in  the  other."  ^  The  decree  of  Chancellor 
Kent  was  reversed  on  error  ;^  and  it  was  dissented  from 
and  the  contrary  doctrine  held  by  Judge  Story,  in  Bean  v. 
Smith,*  and  now  in  nearly  if  not  all  the  States,  the  doctrine 
is  settled,  that  a  fraudulent  conveyance  will  not,  at  the  in- 
stance of  the  creditors,  be  vacated  to  the  prejudice  of  an 
innocent  purchaser  from  the  fraudulent  grantee.* 

§  387.  Creditors  of  fraudulent  grantee. — In  Susong  v.  Will- 
iams^ the  court  held  that  where  a  conveyance  was  made  by 
a  mother  to  her  son  upon  a  secret  trust  to  reconvey  to  the 
grantor  when  peace  should  be  re-established,  the  motive  of 
the  grantor  in  making  the  conveyance  being  fear  of  confis- 
cation, the  conveyance  was  valid  between  the  parties,  and 
the  reconveyance,  being  without  consideration,  was  void  as 
to  the  creditors  of  the  son.  This  is  based  upon  the  princi- 
ple that  the  grantor  by  making  this  conveyance  to  her  son, 
valid  and  effectual  on  its  face,  and  permitting  it  to  be  re- 
corded, thereby  held  her  son  out  to  the  world  as  the  owner 
of  the  property  whereby  he  was  enabled  to  obtain  credit. 
The  principles  of  this  case  would  seem  to  render  it  unsafe 
for  any  owner  of  property  to  allow  the  title  of  it  for  any 
cause  to  rest  in  another  person.     Certainly  il  behooves  the 


'  Roberts  v.  Anderson,  3  Johns.  Ch.  2  Lea.  Cas.  in  Eq.  (4th  Am.  cd.)  42; 

(N.  Y.)  371,  378.  Bump    on    Fraud.    Conv.   480-90;    4 

'  Anderson  V.  Roberts,  18  Johns.  (N.  Kent  464;    Young  v.   Lalhrop,  67  N. 

Y.)  515.  C.  63;  S.  C.  12  Am.  Rep.  603  ;  Gordon 

^  2  Mason  252.  v.  Ritenour,  87  Mo.  61. 

■•  See  note  to  Basset  v,  Nosworthy,        '  i  Heisk.  (Tenn.)  625. 


528  FRAUDULENT  GRANTEES.       §§  388,  3S9 

fraudulent  debtor  to  exercise  care  and  good  judgment  in 
selecting  a  vendee  who  not  only  will  consummate  the  secret 
trust,  but  who  will  not  be  frustrated  in  so  doing  by  his  own 
creditors.  This  doctrine  of  apparent  ownership  may  be 
variously  illustrated.  In  Budd  v.  Atkinson  ^  it  appeared 
that  a  father  bought  a  farm  and  caused  it  to  be  conveyed 
to  his  son  by  a  deed  which  was  recorded.  The  son  entered 
into  possession  of  the  property  and  lived  upon  it.  Subse- 
quently he  contracted  debts  on  the  credit  of  his  ownership 
of  the  farm.  Then  at  his  father's  request  he  conveyed  the 
property  to  the  father,  without  consideration,  and  upon  the 
ground  that  the  latter  had' never  intended  to  give  the  farm 
to  him,  and  that  the  son  was  not  aware  that  the  convey- 
ance had  been  made  to  him.  The  court  held  that  the  deed 
to  the  father  was  fraudulent  as  against  the  son's  creditors.^ 
Where,  however,  a  fraudulent  mortgagee  reconveys  the  land 
to  the  fraudulent  mortgagor,  before  any  lien  attaches  in 
favor  of  the  creditors  of  the  former,  they  cannot  subject 
the  land  to  the  payment  of  their  debts.^ 

§  388.  Liability  between  fraudulent  grantees. — In  Riddle  v. 
Lewis  ^  the  court  decided  that  fraudulent  grantees,  as  be- 
tween themselves  incur  no  responsibility  to  one  another  by 
permitting  the  grantor  to  have  or  dispose  of  any  part  of 
the  property  conveyed. 

§  389.  Fraudulent  grantee  sharing  in  recovery, — Where  a 
fraudulent  scheme  or  purchase,  under  which  a  creditor  ob- 
tained property  of  an  insolvent  debtor,  is  set  aside  in  a  suit 
brought  by  another  creditor  against  the  fraudulent  vendee. 


'  30  N.  J.  Eq.  530.  who  have  come  in  (although  after  the 

-  Where  a  fund  arising  from  prop-  creditors  of  the  fraudulent  vendee)  are 

erty    fraudulently   assigned    has   been  fully  paid.     Mullanphy   Sav.   Bank  v. 

brought  into  court  at  the  instance  of  Lyle,  7  Lea  (Tenn.)  431. 

creditors  of  the  vendor,  creditors  of  the  ^  Powell  v.  Ivey,  88  N.  C.  256.     See 

fraudulent  vendee  will  not  be  permitted  §  398. 

to  have  satisfaction  of  their  claims  out  ■*  7  Bush  (Ky.)  193. 

of  it  until  all  the  creditors  of  the  vendor 


§389 


FRAUDULENT    GRANTEE. 


529 


the  latter  will  not  be  allowed  to  share  with  the  complainant 
in  the  proceeds  of  the  property/  But,  as  we  have  shown, 
where  an  illegal  preference  is  set  aside,  the  creditor  who 
attempted  to  secure  such  preference  is  not  necessarily 
thereby  debarred  from  participating  in  a  distribution  of  the 
debtor's  property  under  a  voluntary  assignment  act,  includ- 
ing the  property  thus  illegally  conveyed  to  him.'^ 


'  Smith  V.  Craft,  11  Biss.  351  ;  Wil-  Murray  v.  Riggs,  15  Johns.  (N.Y.)  571  ; 
son  V.  Horr,  15  Iowa  493.  See  Riggs  Harris  v,  Sumner,  2  Pick.  (Mass.)  129. 
V.  Murray,  2  Johns.  Ch.  (N.  Y.)  582  ;         •  White  v.  Cotzhausen,  129U.  S.  329. 


34: 


CHAPTER  XXV. 


PREFERENCES. 


390.  Preferences  legal. 

391.  Must  represent  actual  debt. 

392.  Vigilant  creditors. 

392a.  Preferences  in  New  York  for 
wages. 


§  393.  Compromises — Secret  preferen- 
tial agreements. 

394.  Secret  antecedent  agreement  to 
prefer. 


"  Equity  delights  in  equality." 

§  390.  Preferences  legal. — In  the  absence  of  a  bankrupt 
act,  the  principle  prevails  in  most  of  the  States  that  an  in- 
solvent debtor  may  make  preferences  among  his  creditors,' 
even  to  the  extent  of  transferring  all  his  property  to  one 
creditor  to  the  exclusion  of  the  others.^     The  common  law 


1  Smith  V.  Craft,  11  Biss.  347 ;  Swift 
V.  Hart,  35  Hun  (N.  Y.)  130,  citing 
this  section  ;  Leavitt  v.  Blatchford,  17 
N.  Y.  537 ;  Warren  v.  Jones,  68  Ala. 
449 ;  Crawford  v.  Kirksey,  55  Ala.  282  ; 
Shealy  v.  Edwards,  75  Ala.  418;  Bish- 
op V.  Stebbins,  41  Hun  (N.  Y.)  246 ; 
Osgood  V.  Thorne,  63  N.  H.  375  ;  Low 
V.  Wortman,  44  N.  J.  Eq.  202 ;  Wal- 
den  V.  Murdock,  23  Cal.  550  ;  Giddings 
V.  Sears,  115  Mass.  505;  Ferguson  v. 
Spear,  65  Me.  279 ;  French  v.  Motley, 
63  Me.  328 ;  Forrester  v.  Moore,  ^^ 
Mo.  651 ;  Clark  v.  Krause,  2  Mackey 
(D.  C.)  567  ;  Richardson  v.  Marqueze, 
59  Miss.  80  ;  Eldridge  v.  Phillipson,  58 
Miss.  270;  Jewett  v.  Noteware,  30 
Hun  (N.  Y.)  194;  Totten  v.  Brady,  54 
Md.  170;  Preusser  v.  Henshaw,  49 
Iowa  41  ;  Atlantic  Nat.  Bank  v.  Tav- 
ener,  130  Mass.  407  ;  Savage  v.  Dowd, 
54  Miss.  728  ;  Shelley  V.  Boothe,  73  Mo. 
74 ;  Spaulding  v.  Strang,  37  N.  Y.  135  ; 


Auburn  Exchange  Bank  v.  Fitch,  48 
Barb.  (N.  Y.)  344  ;  Allen  v.  Kennedy, 
49  Wis.  549  ;  Keen  v.  Kleckner,  42  Pa. 
St.  529 ;  Jordan  v.  White,  38  Mich. 
253 ;  Murphy  v.  Briggs,  89  N.  Y.  451  ; 
Hill  V.  Bowman,  35  Mich.  191 ;  Smith 
V.  Skeary,  47  Conn.  47 ;  Frazer  v. 
Thatcher,  49  Tex.  26  ;  Holbird  v.  An- 
derson, 5  T.  R.  235  ;  Estwick  v.  Cail- 
laud,  5  T.  R.  420 ;  Goss  v.  Neale,  5 
Moore  19.  The  law  tolerates  prefer- 
ences.    Burr  V.  Clement,  9  Col.  i. 

'  Richardson  v.  Marqueze, 59  Miss. 80. 

Purpose  of  bankrupt  act. — The  great 
object  of  the  late  Bankrupt  Act,  so  far  as 
creditors  were  concerned,  was  to  secure 
equality  of  distribution  of  the  bank- 
rupt's property  among  them.  It  set 
aside  transactions  had  within  four  or 
six  months  prior  to  the  bankruptcy,  de- 
pending upon  their  character,  defeating 
or  tending  to  defeat  such  distribution. 
See  Mayer  v.  Hellman,  91  U.  S.  501. 


§  39°  PREFERENCES    LEGAL.  53 1 

favors  and  rewards  the  vigilant  and  active  creditor.  The 
right  of  a  debtor  under  the  rules  of  the  common  law  to 
devote  his  whole  estate  to  the  satisfaction  of  the  claims  of 
particular  creditors,  results,  as  Chief-Justice  Marshall  de- 
clares, "  from  that  absolute  ownership  which  every  man 
claims  over  that  which  is  his  own."^  If,  while  a  man  re- 
tains his  property  in  his  own  hands,  the  right  of  giving 
preferences  should  be  denied,  he  would  so  far  lose  the 
dominion  over  his  own  that  he  could  not  pay  a?iybody,  be- 
cause whoever  he  paid  would  receive  a  preference.^  It 
makes  no  difference  that  the  creditor  and  debtor  both 
knew  that  the  effect  of  the  application  of  the  insolvent's 
estate  to  the  satisfaction  of  the  particular  claim  would  be 
to  deprive  other  creditors  of  the  power  to  reach  the 
debtor's  property  by  legal  process  or  enforce  satisfaction  of 
their  claims.^  If  there  is  no  secret  trust  agreed  upon  or 
understood  between  the  debtor  and  creditor  in  favor  of  the 
former,  but  the  sole  object  of  a  transfer  of  property  is  to 
pay  or  secure  the  payment  of  a  debt,  the  transaction  is  a 
valid  one  at  common  law.^  The  distinction  is  between  a 
transfer  of  property  made  solely  by  way  of  preference  of 
one  creditor  over  others,  which  is  legal,  and  a  similar  trans- 
fer made  with  a  design  to  secure  some  benefit  or  advantage 
from  it  to  the  debtor.^  It  is  an  absurdity  to  say  that  a  con- 
veyance of  property  which  pays  one  rreditor  a  just  debt 
and  nothing  more,  is  fraudulent  as  against  other  creditors 
of  the  common  debtor.^     In  a  fair  race  for  preference  if  a 


'  Brashear  v.  West,  7  Pet.  608,  614  ;  ence  of  a  botta  fide  creditor,  was  not 

Reed  v.  Mclntyre,  98  U.  S.  510;  Mayer  rendered  fraudulent  against  other  cred- 

V.  Hellman,  91  U.  S.  500;  Campbell  v.  itors  as  matter  of  law  by  containing  a 

Colorado  Coal  &  Iron  Co.,  9  Col.  65.  stipulation  that  the  purchaser  should 

*  Tillou  V.  Britton,  9  N.  J.  Law  120,  employ   the  debtor    at    a    reasonable 
cited  in  Campbell  v.  Colorado  Coal  &  salary  to  wind  up  the  business. 

Iron  Co.,  9  Col.  65.  '  Banfield     v.    Whipple,     14     Allen 

^  Wood  V.  Dixie,  7  Q.  B.  892.  (Mass.)    13;    Giddings    v.    Sears,    115 

*  In  Smith  v.  Craft,  123  U.  S.  436,  it  Mass.  507. 

was  held  that  a  bill  of  sale  of  a  stock  "  Auburn  E,\change  Bank  v.  Fitch, 

of  goods  in  a  shop,  by  way  of  prefer-  48  Barb.  (N.  Y.)  354, 


532  ACTUAL    DEBT.  §  39I 

creditor  by  diligence  secures  an  advantage,  it  may  be  main- 
tained ;  but  if  his  purpose  is  not  to  collect  the  claim,  but 
to  help  the  debtor  cover  up  his  property,  he  cannot  shield 
himself  by  showing  that  his  debt  was  bona  fide}  We  may 
here  observe  that  an  insolvent  debtor  may  prefer  his 
daughters  to  the  extent  that  they  are  his  creditors  as  his 
wards,  although  such  preference  may  leave  the  debtor 
without  the  means  of  paying  his  other  debts.^  In  a  contro- 
versy recently  before  the  Supreme  Court  of  the  United 
States,^  construing  the  statute  of  Illinois,  it  was  decided 
that  a  preferential  disposition  of  all  the  assets  of  an  insol- 
vent debtor  operated  as  a  general  assignment.  The  decree 
appealed  from  entirely  excluded  the  preferred  creditors 
from  participating  in  the  fund.  In  modifying  this  decree 
Mr.  Justice  Harlan  said :  "The  mother,  sisters,  and  brother  of 
Alexander  White,  Jr.,  were  his  creditors,  and,  so  far  as  the 
record  discloses,  they  only  sought  to  obtain  a  preference 
over  other  creditors.  But  their  attempt  to  obtain  such 
illegal  preference  ought  not  to  have  the  effect  of  depriving 
them  of  their  interest,  under  the  statute,  in  the  proceeds  of 
the  property  in  question,  or  justify  a  decree  giving  a  prior 
right  to  the  appellee.  It  was  not  intended,  by  the  statute, 
to  give  priority  of  right  to  the  creditors  who  are  not  pre- 
ferred. All  that  the  appellee  can  claim  is  to  participate  in 
such  proceeds  upon 'terms  of  equality  with  other  creditors." 

§  391.  Must  represent  actual  debt. — The  preferred  cred- 
itor must  have  a  valid  subsisting  claim  against  the  debtor 
which  the  transfer  was  given  to  satisfy  or  secure.  In 
Union  National  Bank  v.  Warner*  the  conveyance  was 
made  by  a  father  to  his  sons,  who  were,  however,  not 
creditors.     The  mutual  fraudulent  intent  being  shown,  the 


'  Smith  V.  Schwed,  9  Fed.  Rep.  483.        -  Micou  v.  National  Bank,  104  U.  S. 
See  David  v.  Birchard,  53  Wis.  494 ;     543. 

Menton  v.  Adams,  49  Cal.  620.  *  White  v.  Cotzhausen,  129  U.  S.  345. 

*  12  Hun  (N.  Y.)  306. 


§  392  VIGILANT    CREDITORS.  533 

conveyance  was  annulled,  their  agreement  to  pay  some  of 
his  debts  being  deemed  a  part  of  the  fraudulent  scheme 
which  fell  with  it.  So  in  Davis  v.  Leopold,^  the  convey- 
ance by  a  husband  through  a  third  person  to  his  wife  was 
set  aside,  the  wife  not  being  a  creditor;'*  while  in  Crown- 
inshield  v.  Kittridge  ^  a  mortgage  was  annulled  because  it 
was  given  for  a  fictitious  or  excessive  amount,  and  exe- 
cuted for  the  double  purpose  of  securing  a  bona  fide  debt 
and  preventing  creditors  from  attaching  the  property. 

§392.  Vigilant  creditors.  —  The  general  rule  in  equity 
only  requires  that  the  fund  acquired  by  a  creditors*  pro- 
ceeding should  be  distributed  among  the  creditors  pro 
rata}  And  where  a  creditor  has  not  obtained  any  lien  at 
law,  not  having  obtained  any  judgment,  he  is  not  entitled 
to  a  priority  over  the  other  creditors.'  The  commence- 
ment of  a  creditor's  suit  in  chancery  by  a  judgment-cred- 
itor, with  execution  returned  unsatisfied,  gives  him  a  lien 
upon  all  the  equitable  assets  of  the  debtor,^  and  the  same 
general  rule  is  applied  to  supplementary  proceedings.'  The 
first  party  to  move  is  rewarded  as  a  vigilant  creditor,  the 
commencement  of  his  suit  being  regarded  as  an  actual  levy 
upon  the  equitable  assets  of  his  debtor,^  and  entitles  him 
to  a  priority.^  A  purchaser /^;/^^;//^  lite  with  notice,  will 
take  subject  to  the  rights   of   the   complainant.'"     "The 

'  87  N.  Y.  620.  13  Wend.  (N.  Y.)  244;   Voorhees   v. 

'  Compare  Jewett  v.    Noteware,    30  Seymour,  26  Barb.  (N.  Y.l  5S0. 

Hun  (N.  Y.)  194.  '  Ednionston  v.  McLoud,    16  N.  Y. 

•'•  7  Met.  (Mass.)  522.  544.     See  §61. 

*  Robinson    v.    Stewart,    10    N.  Y.  '  Lynch   v.    Johnson.  48  N.  Y.   33  ; 

196.  The  Deposit  Nat,  Bank  v.  Wickham, 

6  Ibid.  44  How.  Pr.  (N.  Y.)   422  ;  Roberts  v. 

«  Storm  V.  Waddell,  2  Sandf.  Ch.  (N.  Albany  &  W.  S.  R.R.  Co..  25  Barb. 

Y.)  494 ;  Brown  v.  Nichols,  42  N.  Y.  (N.  Y.)  662 ;  Field  v.  Sands,  8  Bosw. 

26.      Examine   Freedman's  Savings  &  (N.  Y.)  685. 

Trust  Co.    V.   Earle,    no  U.  S.  710;  °  George  v.  Williamson,  26  Mo.  190; 

Safford    v.    Douglas,  4  Edw.  Ch.  (N.  2  Hoffman's  Ch.  Pr.   114;  Corning  v. 

Y.)  538  ;  Boynton  v.  Rawson,  I  Clarke  White,  2  Paige  (N.  Y.)  567. 

Ch.  (N.  Y.)  592 ;   Hone  v.  Henriquez,  '"  Jeffres  v.  Cochrane,  47  Barb.  (N. 

Y.)  557. 


534  PREFERENCES    IN    NEW    YORK.  §  392^ 

vigilant  creditor,  pursuing  his  claim,  acquires  a  preferable 
equity,  which  attaches  and  becomes  a  specific  lien  by  the 
filing  of  his  bill."^  This  right  is  said  to  be  as  well  defined 
and  as  exclusive  of  the  claims  of  other  creditors  as  is  the 
right  secured  by  a  judgment  lien  upon  the  debtor's  prop- 
erty.^ Where  a  party  purchased  lands  pending  a  suit  to 
reach  the  judgment-debtor's  interest  therein,  and  entered  into 
possession  and  made  improvements,  such  a  grantee  is  not 
entitled  to  have  his  improvements  discharged  from  the  lien 
of  the  decree  rendered  against  the  lands/^  Equity  will  not 
relieve  a  party  from  a  risk  which  he  voluntarily  assumes. 
This  is  a  phase  of  the  general  rule  that  no  allowance  will 
be  made  for  improvements  placed  upon  land  after  suit 
brought.*  The  Court  of  Chancery  does  not,  however,  give 
any  specific  lien  to  a  creditor  at  large,  against  his  debtor, 
further  than  he  has  acquired  at  law.  It  is  only  when  he 
has  obtained  a  judgment  and  execution  in  seeking  to  sub- 
ject the  property  of  his  debtor  in  the  hands  of  third  per- 
sons, or  to  reach  property  not  accessible  to  an  execution, 
that  a  legal  preference  is  acquired  which  a  Court  of  Chan- 
cery will  enforce.^  In  New  York  "  the  law  gives  no  pref- 
erence to  a  vigilant  creditor  in  the  estate  of  a  decedent."  ^ 

§  392^.  Preferences  in  New  York  for  wages. — By  statute  in 
New  York'^  it  is  provided  that,  in  all  assignments  made 
pursuant  to  the  act,  the  wages  or  salaries  of  employes  shall 
be  preferred  before  any  other  debt.  The  Court  of  Appeals 
held  that  an  assignment  was  not  rendered  void  by  reason 
of  the  omission  to  insert  therein  a  clause  giving  such  pref- 

1  Burt  V.  Keyes,  i  Flippin  72,     See        -  Burt  v.  Keyes,  i  Flippin  72, 
Douglass  V.  Huston,  6  Ohio  156 ;  Miers        ^  Patterson  v.  Brown,  32  N.  Y.  81. 
V.  Zanesville  &  M.  Turnpike  Co.,   13        ^  Sedgwick  &  Wait  on  Trial  of  Title 

Ohio  197  ;  Corning  v.  White,  2  Paige  to  Land,  2d  ed.,  §  705. 
(N.  Y.)  567  ;  George  v.  Williamson,  26        -  Day  v.  Washburn,  24  How.  355. 
Mo.  190  ;  Albany  City  Bank  v.  Scher-         *  Lichtenberg  v,  Herdtfelder,  103  N. 

merhorn,  i  Clarke's  Ch.  (N.  Y.)  297 ;  Y.  306. 

Storm  V.  Waddell,  2  Sandf.   Ch.  (N.         ^  Laws   of  1877,  Ch.  466,  §  29,   as 

Y.)  494.  amended  by  Laws  of  1884,  Chap.  328. 


§  393  COMPROMISES.  535 

erence,  as  the  instrument  would  be  read  in  connection  with 
the  statute  with  the  same  effect  as  though  the  provision 
formed  a  part  of  it.^ 

§  393.  Compromises— Secret  preferential  agreements. — The 
law  has  ever  scrupulously  guarded  the  integrity  and  good 
faith  required  in  the  general  compromises  of  creditors  with 
their  debtors.  From  considerations  of  public  policy  and 
sound  morals,  transactions  of  this  character  should  be  con- 
ducted with  truth  and  fairness,  lest  any  undue  secret  ad- 
vantage be  secured  to  one  creditor  at  the  expense  of  an- 
other.*^  Attempts  to  thwart  the  application  of  these  salutary 
principles  are  common  and  when  detected  will  be  over- 
thrown.^ In  Cockshott  v.  Bennett,*  the  defendants  being 
indebted  to  plaintiffs  and  other  creditors,  a  compromise 
was  effected  at  lis.  in  the  pound  as  to  all  the  creditors  ex- 
cept plaintiffs,  who  refused  to  sign  the  deed  unless  the  de- 
fendants gave  them  a  note  for  the  remaining  9^.  in  the 
pound.  The  note  was  accordingly  given,  and  defendants 
made  a  subsequent  promise  to  pay  it.  Lord  Kenyon  in 
defeating  a  recovery  placed  his  opinion  upon  the  founda- 
tion that  the  note  was  a  fraud  upon  the  creditors  who  were 
parties  to  the  deed  by  which  their  debts  were  to  be  can- 
celled in  consideration  of  receiving  iii-.  in  the  pound,  and 
observed  that  "  all  the  creditors  being  assembled  for  the 
purpose  of  arranging  the  defendants'  affairs,  they  all  under- 
took and  mutually  contracted  with  each  other  that  the  de- 
fendants should  be  discharged  from  their  debts  after  the 
execution  of  the  deed."  Upon  the  point,  as  to  the  revival 
of  the  debt  by  a  subsequent  promise,  the  learned  Chief- 
Justice  said  :  "  Contracts  not  founded  on  immoral  consid- 
erations  may   be  revived But   this   transaction   is 


'  Richardson  v.  Thurber,  104  N.  Y.  disclosures    concerning    his    property. 

606.  Graham  v.  Meyer.  99  N.  Y.  611. 

*  Fanner   v.    Dickey,   i   FHppin   36.  '  Bhss  v.  Matteson,  45  N.  Y.  22. 

The  debtor  seeking  a  composition   is  •*  2  T.  R.  763. 
not  bound  unless  requested  to  make 


536  COMPROMISES.  §  393 

bottomed  in  fraud,  which  is  a  species  of  immorality,  and 
not  being  available  as  such,  cannot  be  revived  by  a  subse- 
quent promise."  Mr.  Justice  Ashurst  remarked  in  the 
same  case  that  the  creditors  "  were  induced  to  enter  into 
the  agreement  on  principles  of  humanity  in  order  to  dis- 
charge the  defendants  from  their  incumbrances  ;  and  if 
they  had  not  thought  that  such  would  have  been  the  effect, 
they  would  not  probably  have  agreed  to  sign  the  deed,  but 
each  would  have  endeavored  to  obtain  payment  of  his 
whole  debt.     Therefore  I  think  that  this  security  is  not 

merely  voidable,  but  absolutely  void The  note  was 

void  on  the  ground  of  fraud,  and  any  subsequent  promise 
must  be  jiudtint  pactum!'  So  in  Jackson  v.  Lomas,^  a 
secret  agreement  was  made  by  a  debtor  with  a  creditor  to 
pay  an  additional  sum,  the  consideration  of  which  agree- 
ment was  that  the  creditor  should  sign  a  composition  deed 
with  the  other  creditors.  Mr.  Justice  Duller  declared  the 
secret  agreement  absolutely  void,  and  refused  to  enforce 
it*  The  principle  of  these  English  cases  is  upheld  in  the 
€arly  case  of  Payne  v.  Eden,^  in  New  York,  where  a  note 
;given  in  consideration  of  the  creditors  signing  the  insol- 
vent's petition  to  make  up  the  statutory  proportion  was 
adjudged  void.  And  in  Wiggin  v.  Bush,*  a  note  executed 
by  a  debtor  to  his  creditor,  to  induce  him  to  withdraw  his 
opposition  to  the  debtor's  discharge  under  an  insolvent  law 
was  adjudged  void.  So  a  note  given  by  a  third  person  to 
a  creditor  in  consideration  of  his  withdrawing  all  opposition 
to  the  discharge  of  his  debtor  as  a  bankrupt,  even  though 
without  the  knowledge  of  the  debtor,  is  void.^     In  Case  v. 

1  4  T.  R.  166.  '3  Caines  (N.  Y.)  213. 

■^  See  Jones  v.  Barkley,  2  Doug.  696  ;  ^12  Johns,  (N.  Y.)  306. 

Sumner  v.  Brady,  i  H.  Bla.  647 ;  Jack-  ^  Bell  v.  Leggett,  7  N.  Y.  176.     See 

son  V.  Duchaire,  3  T.  R.  551  ;  Feise  v.  Waite  v.  Harper,  2  Johns.  (N.  Y.)  386  ; 

Randall,   6  T.   R.   146;    Leicester  v.  Tuxbury  v.  Miller,  19  Johns.  (N.  Y.) 

Rose,  4  East  372  ;  Holmer  v.  Viner,  I  311  ;  Drexler  v.  Tyrrell,  15  Nev.  132  ; 

Esp.   131 1    Knight   v.  Hunt,   5    Bing.  York  v,  Merritt,  'j'j  N.  C.  214;  Sharp 

432;    Howson  V.  Hancock,  8  T,   R.  v.  Teese,  9  N.  J.  Law  352. 
575  ;  Solinger  v.  Earle,  82  N.  Y.  393. 


§  394  SECRET    ANTECEDENT    AGREEMENT.  537 

Gerrish,^  Chief-Justice  Shaw,  in  deciding  upon  an  agree- 
ment of  this  character  where  a  note  had  been  driven,  said  : 
"  This  was  an  unwarrantable  coercion  upon  the  debtor,  and 
a  fraud  upon  the  other  creditors,  which  renders  the  note 
void." 

§  394.  Secret  antecedent  agreement  to  prefer. — An  agree- 
ment between  a  debtor  and  creditor  that,  in  consideration 
of  receiving  a  loan,  the  debtor  will  prefer  such  creditor  in 
the  event  of  insolvency,  has  been  considered  to  be  in  the 
nature  of  a  secret  lien,  which  is  a  fraud  upon  subsequent 
creditors  of  the  debtor  who  are  ignorant  of  the  arrano-e- 
ment,  and  a  subsequent  disposition  of  the  property  in  ac- 
cordance with  such  an  arrangement  can  be  avoided  by  such 
subsequent  creditors.^  We  doubted  the  soundness  of  this 
conclusion  in  our  first  edition,  and  the  case  cited  has  since 
been  overturned  ^  and  its  conclusions  departed  from.**  In 
National  Park  Bank  v.  Whitmore,^  Earl,  J.,  said:  "A 
debtor  may  obtain  credit  by  a  promise  to  pay  in  the  future, 
either  in  cash  or  in  property,  or  by  promising  to  give  his 
check  or  an  indorsed  note,  or  a  confession  of  judgment. 
Neither  such  a  promise,  nor  its  performance,  is  a  legal  fraud 
upon  any  one  ;  and  why  may  he  not  promise  to  give  se- 
curity upon  the  property  purchased,  or  other  |)roperty  ? 
Such  a  promise,  honest  in  fact,  has  never  been  held  to  be 
a  fraud  or  to  work  a  fraud  upon  creditors.  Security  hon- 
estly given  in  pursuance  of  such  a  promise,  relates  back  to 
the  date  of  the  promise,  and,  except  as  to  intervening  rights, 
is  just  as  good  and  effectual  as  if  given  at  the  date  of  the 
promise  ;  and  it  has  generally  been  so  held,  even  in  bank- 
ruptcy proceedings.*^     But  here  the  agreement  was  to  make 


*  15  Pick.  (Mass.)  49.  *  Citing  Bump's  Bankruptcy    [loth 

*  Smith  V,  Craft,  11  Biss.  340.  ed.]  821  ;  Forbes  v.  Howe,  102  .Mass. 
'  17  Fed.  Rep.  705.  427;  Bank  of  Leavenworth  v.  Hunt,  11 

*  See  National  Park  Bank  v.  Whit-  Wall.  391  ;  Biirdiok  v.  Jackson,  7  Hun 
more,  104  N.  Y.  304,  and  cases  cited.  (N.  Y.)  488;  Ex  part c  Ames,  i  Low- 

'  104  N.  Y.  303.  ell's  Dec,  561  ;  Ex  parte  Fisher,  L.  R. 


538  SECRET    ANTECEDENT   AGREEMENT.  §  39  + 

the  preferential  assignment  in  case  it  became  necessary  to 
protect  the  creditor ;  and  it  is  further  claimed  that  such  a 
conditional  agreement  is  a  fraud  upon  other  creditors.  A 
failing  debtor  may  make  an  assignment  preferring  one  or 
more  creditors  because  he  is  under  a  legal,  equitable,  or 
moral  obligation  to  do  so,  or  he  may  do  it  from  mere 
caprice  or  fancy,  and  the  law  will  uphold  such  an  assign- 
ment honestly  made.  If  he  may  make  such  an  assignment 
without  any  antecedent  promise,  why  may  he  not  make  it 
after  and  in  pursuance  of  such  a  promise  ?  How  can  an 
act  otherwise  legal  be  invalidated  because  made  in  pursu- 
ance of  a  valid  or  invalid  agreement  honestly  made  ?  In 
Smith  V.  Craft  ^  Judge  Gresham  held  that  such  a  condi- 
tional agreement  for  a  future  preference  was  a  fraud  upon 
creditors.  But  in  the  same  case^  upon  a  rehearing,  Judge 
Woods  held  that  the  same  agreement  was  not  fraudulent, 
and  in  a  very  satisfactory  opinion  showed  that  such  an 
agreement  as  we  ha've  here,  for  a  future  preference  in  case 
of  insolvency,  is  not  a  legal  fraud  upon  creditors.^  This 
agreement  did  not  create  any  lien,  legal  or  equitable,  upon 
the  property  of  the  defendants.  It  was  not  an  agreement 
for  a  future  lien  upon  the  specific  property,  which  is  some- 
times held  to  create  an  equitable  lien  which  may  be  enforced 
in  equity.  It  was  not  an  agreement  for  any  lien  at  all.  It 
was  simply  an  agreement,  in  case  of  an  assignment  by  the 
defendants,  to  prefer  Whiting.  The  agreement  did  not 
bind  defendants'  property,  nor  encumber  it,  but  left  it  sub- 
ject to  all  the  remedies  of  their  creditors,  and  it  neither 
hindered  nor  delayed  those  creditors.  They  could  have 
made  the  same  assignment  without  a  previous  agreement 


7    Ch.   App.  636 ;    Ex  j)arte  Kilner,  ^  Citing  Walker   v.  Adair,  i  Bond 

L.  R.  1 3  Ch.  Div.  245  ;  Mercer  v.  Peter-  1 58  ;  Anderson  v.  Lachs,  59  Miss,  in; 

son,  L.  R.  2  Ex.  304;  S.  C.  L.  R.  3  Ex.  Spaulding  v.  Strang,  37  N.  Y.  135  ;  S. 

104.  C.  38  N.  Y.  9 ;  Haydock  v.  Coope,  53 

'  1 1  Biss.  340.  N.  Y.  68. 

'  17  Fed.  Rep.  705. 


§  394  SECRET    ANTECEDENT    AGREEMENT.  539 

and  it  is  impossible  to  perceive  how  the  agreement  worked 
any  legal  harm  to  any  one.  It  is  not  important  to  deter- 
mine whether  this  was  an  agreement  of  which  a  court  of 
equity  would  enforce  specific  performance,  but  we  do  not 
believe  it  was,  and  think  it  must  stand  both  in  law  and 
equity  like  an  agreement  to  pay  at  a  future  day." 


CHAPTER  XXVI. 

CONVEYANCES    VALID     BETWEEN     THE     PARTIES RELIEF    TO 

DEFRAUDED    GRANTORS. 


§  395-  Conveyances   binding    between 
tlie  parties. 

396.  The  theory — No  reconveyance. 

397.  Massachusetts  cases. 

398.  General  rule  and  policy. 

399.  When  aid  will  be  extended  to 

grantors. 

400.  Cases  and  illustrations. 


§  401.  The  cases  just  considered  excep- 
tional. 

402.  Grantee  enforcing  fraudulent  deed 

403.  Fraud   upon    debtor   as    distin- 

guished from  fraud  upon  cred- 
itors. 

404.  Declaring  deed  a  mortgage. 
404a.  Redeeming   mortgaged    prop- 
erty. 


§  395-  Conveyances  binding  between  the  parties. — The  stat- 
ute under  which  fraudulent  and  voluntary  conveyances  may 
be  set  aside,  13  Eliz.  c.  5,  ordinarily  has  no  application  to 
the  parties  to  such  instruments  or  their  representatives. 
In  Jackson  v.  Garnsey/  Spencer,  C.  J.,  in  referring  to  this 
subject,  used  these  words:  "As  between  the  parties  they 
are  expressly  excluded  from  its  operation,  and  are  left  as 
they  stood  at  the  common  law  ;  and  before  the  statute  the 
heir  could  never  set  up  his  title  against  the  voluntary  alienee 
of  his  ancestor,  nor  call  upon  him  for  contribution,  where 
both  were  amenable  to  the  creditors  of  the  ancestor  as  ter- 
tenants ;  nor  will  courts  of  equity  assist  the  party  makmg 
a  voluntary  conveyance  or  his  representative  claiming  as 
such,  by  setting  them  aside."  The  cases  holding  such  con- 
veyances binding  between  the  parties  are  numerous.^     The 


>  16  Johns.  (N.  Y.)  189.  See  §§112, 
113,  121. 

'^  See  Mercer  v.  Mercer,  29  Iowa  557  ; 
Tantum  v.  Miller,  11  N.  J.  Eq.  551; 
Bonesteel  v.  Sullivan,  104  Pa.  St.  9  ; 


Lerow  v.  Wilmarth,  9  Allen  (Mass.) 
386;  Bullitt  V.  Taylor,  34  Miss.  708, 
737  ;  Armington  v.  Rau,  100  Pa.  St. 
168  ;  Haak's  Appeal,  100  Pa.  St.  62  ; 
Doe  d.  Abbott  v.  Hurd,  7  Blackf.  (Ind.) 


§  395 


CONVEYANCES    BINDING. 


541 


same  rule  appertains  to  general  assignments  which,  though 
voidable  by  creditors,  are  always  valid  between  the  imme- 
diate parties.*  The  conveyance,  as  between  the  parties, 
stands  upon  the  same  ground  as  if  a  full  and  adequate  con- 
sideration had  been  paid.^  It  is  held  in  conformity  with 
this  rule  that  a  debtor  who  has  conveyed  his  property  in 
order  to  defraud  his  creditors  has  no  standinir  in  a  court  of 
equity  to  question  the  fairness  or  adequacy  of  price  ob- 


510;  McGuire  v.  Miller,  15  Ala.  394, 
397  ;  Williams  v.  Higgins,  69  Ala.  523 ; 
Dyer  v.  Homer,  22  Pick.  (Mass.)  253  ; 
Keel  V.  Larkin,  83  Ala.  142  ;  Tyler  v. 
Tyler,  25  111.  App.  343  ;  Songer  v.  Par- 
tridge, 107  111.  529  ;  Barrow  v.  Barrow, 
108  Ind.  345  ;  Reichart  v.  Castator,  5 
Binn.  (Pa.)  109 ;  S.  C.  6  Am.  Dec.  402, 
and  note  ;  Newell  v.  Newell,  34  Miss. 
385  ;  Shaw  v.  Millsaps,  50  Miss.  380  ; 
Davis  V.  Swanson,  54  Ala.  277  ;  Noble 
V.  Noble,  26  Ark.  317  ;  Lloyd  v.  Foley, 
6  Sawyer  426 ;  Van  Wy  v.  Clark,  50 
Ind.  259;  Crawford  v.  Lehr,  20  Kans. 
509  ;  Peterson  v.  Brown,  17  Nev.  173  ; 
Allison  V.  Hagan,  12  Nev.  38  ;  Stewart 
V.  Piatt,  loi  U.  S.  738 ;  Harmon  v. 
Harmon,  63  111.  512  ;  Graham  v.  Rail- 
road Co.,  102  U.  S.  148  ;  George  v. 
Williamson,  26  Mo.  190 ;  Sharpe  v. 
Davis,  76  Ind.  17  ;  Nichols  v.  Patten, 
18  Me.  231  ;  Ellis  v.  Higgins,  32  Me. 
34  ;  Bush  V.  Rogan,  65  Ga.  321  ;  Good- 
wyn  V.  Goodwyn,  20  Ga.  600 ;  McCles- 
key  V.  Leadbetter,  i  Ga.  551.  In  Bar- 
row V.  Barrow,  108  Ind.  345,  it  was 
held  that  where  a  wife  joined  her  hus- 
band in  conveying  his  land  in  fraud  of 
creditors,  she  could  not,  after  obtain- 
ing a  divorce,  have  the  conveyance  set 
aside,  and  the  land  subjected  to  the 
payment  of  her  judgment  for  alimony. 
'  Ames  V.  Blunt,  5  Paige  (N.  Y.)  13  ; 
Mills  V.  Argall,  6  Paige  (N.  Y.)  577  ; 
Smith  V.  Howard,  20  How.  Pr.  (N.  Y.) 
121,  126;  Bradford  v.  Tappan,  11  Pick. 
(Mass.)  76 ;  Van  Winkle  v.  McKee,  7 


Mo,  435  ;  Bellamy  v.  Bellamy,  6  Fla. 
62 ;  Rumery  v,  McCulloch,  54  Wis. 
565.     See  Chap.  XXI. 

*  Chapin  v.  Pease,  10  Conn.  73. 

Relaxation  of  the  rule. — Bowes  v. 
Foster,  2  H.  &  N.  779,  seems  to  evi- 
dence an  intention  to  relax  this  salu- 
tary rule.  Plaintiff  being  in  financial 
difficulties,  and  fearing  proceedings  on 
the  part  of  his  creditors,  made  an 
agreement  with  defendant,  who  was 
also  a  creditor,  that  a  pretended  sale 
of  a  stock  of  goods  should  be  made  to 
defendant.  An  invoice  was  prepared, 
a  receipt  given  for  the  purchase-money, 
and  possession  delivered  to  the  defend- 
ant. The  latter  sold  the  goods  as  his 
own.  Plaintiff  brought  trover  and  was 
permitted  to  recover  upon  the  theory 
that  the  transaction  never  was  in  real- 
ity a  sale.  Pollock,  C.  B.,  said  :  "  I  am 
by  no  means  sure  that  a  man  who,  un- 
der the  pressure  of  distress  and  misfor- 
tune, lends  himself  to  such  a  transac- 
tion, is  in  the  same  delictum  as  a  man 
who  does  so  without  such  motive." 
Still  more  remarkable  is  the  statement 
of  Martin,  B.,  who  observed  :  "  It  is 
said  that  a  person  ought  not  to  be  al- 
lowed to  set  up  his  own  fraud.  But 
here  there  was  no  fraud  ;  it  was  only 
intended  to  give  the  defendant  the 
power  to  pretend  that  he  was  the 
owner  of  the  goods."  If  observations 
such  as  these  are  to  pass  unchallenged 
the  principle  of  law  for  which  we  are  con- 
tending would  be  practically  nullified. 


542  THE    THEORY.  §  396 

tained  at  the  public  sale  of  the  premises  under  a  creditor's 
bill  to  reach  such  property.^  It  is  not  material  whether 
the  party  is  alleging  the  fraud  as  matter  of  defense,  or  as  a 
ground  of  action,^  for,  as  was  said  by  Lord  Mansfield,^ 
"  no  man  shall  set  up  his  own  iniquity  as  a  defense,  any 
more  than  as  a  cause  of  action."  * 

§  396.  The  theory— No  reconveyance. — Lord  Chancellor 
Thurlow^  declared  his  opinion  to  be  that  in  all  cases  where 
money  was  paid  for  an  unlawful  purpose  the  party,  though 
particeps  crwttms,  might  recover  at  law  ;  and  the  reason 
was  that  if  courts  of  justice  meant  to  prevent  the  perpetra- 
tion of  crimes  it  must  be,  not  by  allowing  a  man  who  has 
possession  to  hold  it,  but  by  putting  the  parties  back  in  the 
condition  in  which  they  were  before  entering  into  the 
transaction.  The  doctrine  of  the  learned  Lord  Chancel- 
lor would  seem  to  be  sufficiently  broad  to  cover  the  cases 
of  conveyances  made  in  fraud  of  creditors.  Yet  the  au- 
thorities, as  a  general  rule,  reveal  a  singular  absence  of  any 
disposition  on  the  part  of  the  courts  to  extend  relief  to 
fraudulent  grantors.  A  fraudulent  vendee  is  under  no 
legal  obligation  to  reconvey,  though  morally  bound  to  do 
so  ;  and  a  court  of  equity  will  give  no  aid  where  both  the 
vendor  and  vendee  participate  in  the  illegal  transaction.''  It 
is  familiar  learning  that  equity  will  not  decree  a  specific 


'  Guest  V.  Barton,  32  N.  J.  Eq.  120,  main     indisputable."       McMaster     v. 

^  Williams  v.  Higgins,  69  Ala.  523.  Campbell,  41  Mich.  516.     Whenever  it 

^  Montefiiori  v.  Montefiori,  i  W.  Bla.  appears  that  the  object  of  a  suitor  in 

364.  filing  a  creditor's  bill  is  to  aid  a  person 

^"As     between     the    grantor    and  who   has   placed   his   property  in  the 

grantees  the  conveyances  made  were  name  of  another  to  hinder  creditors  to 

good  and  passed  title  to  the  property,  regain  control  of  it,  equity  will  refuse 

And  as  to  the  creditors  of  the  grantor  assistance.    Ruckman  v.  Conover,  37 

they  were  not  void,  but  merely  voida-  N.  J.  Eq.  583. 

ble  at  their  option  ;   they,  by  proper  *  See  Neville  v.  Wilkinson,  i  Bro.  C. 

proceedings,  could  have  them  set  aside,  C.  547. 

but  if  no  steps  were  taken  by  them  for  ^  Powell  v.  Ivey,  88  N.  C.  256;   S.  C. 

such    purpose,   then   undoubtedly   the  28  Alb.  L,  J.  254. 
title  of  the  grantees  would  be  and  re- 


§  39^  THE   THEORY.  543 

performance  of  an  agreement  by  the  fraudulent  grantee  to 
reconvey  the  property  to  the  debtor,^  and  will  not  interfere 
to  correct  a  mistake  in  a  deed  that  was  executed  for  a 
fraudulent  purpose.^  And  if  a  party  obtains  a  deed  with- 
out consideration  upon  a  parol  agreement  that  he  will  hold 
the  land  in  trust  for  the  grantor,  there  is  authority  to  the 
effect  that  such  trust  will  not  be  enforced,  as  it  would  vio- 
late the  statute  of  frauds,  and  also  the  general  rule  that 
parol  evidence  cannot  be  admitted  to  vary,  add  to,  or 
contradict  a  written  instrument.^  In  a  New  Jersey  case ^ 
it  was  decided  that  a  note  wiiich  was  given  for  property 
transferred  to  the  maker  for  the  purpose  of  defrauding  the 
creditors  of  the  payee  could  not  be  enforced  in  the  hands 
of  the  payee  against  the  maker.  In  the  course  of  the 
opinion  Chief-Justice  Beasley  indulged  in  the  following  re- 
freshing observations :  "  It  was  urged  that  the  statute  for 
the  prevention  of  frauds  and  perjuries  does  not  invalidate 
transactions  the  end  of  which  is  to  prevent  or  make  diffi- 
cult the  collection  of  just  claims,  except  so  far  as  concerns 
creditors,  and  that,  inter  partes,  such  transactions,  if  con- 
taining no  other  infirmity,  will  be  effectuated  at  law.  It  is 
certainly  true,  the  statute  referred  to  does  not,  proprio 
vigore,  annul  beyond  the  extent  thus  defined,  the  convey- 
ances and  contracts  at  which  it  is  levelled.  Nothing  more 
than  this  was  necessary  to  effect  its  purpose,  which  was 
the  relief  and  protection  of  creditors  against  this  class  of 
frauds.  But  it  is  also  clear,  that  it  has  no  tendency  to 
legalize  any  act  which  was  not  legal  at  the  time  of  its  en- 


'  W^alton  V.  Tusten,  49  Miss.    577  ;  v.  Pease,  10  Conn.  72  ;  Tyler  v.  Tyler. 

Sweet  V.  Tinslar,  52  Barb.  (N.  Y.)  271  ;  25  111.  App.  343.     See  §  429. 

Canton  v.  Dorchester,  8  Cush.  (Mass.)  "  Gebhard  v.  S.attler.  40  Iowa  152. 

525;   Grider  v.  Graham,  4  Bibb  (Ky.)  '  Pusey  v.  Gardner,  21  W.  Va.  474; 

70 ;  Baldwin  v.  Cawthorne,  19  Ves.  166 ;  Troll  w  Carter,  1 5  VV.  Va.  567  ;  Zane  v. 

Ellington  v.  Currie,  5  Ired.  (N.  C.)  Eq.  Fink,  18  W.  Va.  755.     See  Cutler  v. 

21  ;   St.  John  v.  Benedict,  6  Johns.  Ch.  Tultle.  19  N.  J.  Eq.  549. 

(N.  Y.)    Ill;    Waterman   on   Specific  ^Church    v.    Muir.    33    N.  J.    Law 

Performance,  ed.  1881,  §  340;   Chapin  319. 


544  MASSACHUSETTS    CASES.  §  397 

actment A  contract,  the   purpose  of   which   is  to 

protect  a  debtor  against  the  just  claims  of  creditors,  is  an 
immoral  act.  Such  an  affair  is  inimical  to  social  policy. 
It  is  in  direct  opposition  both  to  the  letter  and  spirit  of  the 

statute  for  the  prevention  of  frauds In  their  essence 

and  in  their  effects,  such  contracts  are  as  immoral  and  per- 
nicious as  many  of  those  which  the  law  has  declared  to  be 
utterly  void.  In  these  respects  how  are  they  to  be  dis- 
tinguished from  contracts  to  indemnify  persons  against  the 
consequences  of  their  illegal  acts  ;  against  liability  for  the 
publication  of  a  libel ;  from  promises  by  uninterested 
parties  to  furnish  money  for  the  prosecution  of  law-suits ; 
from  agreements  in  contravention  of  the  bankrupt  or  in- 
solvent acts,  or  in  general  restraint  of  trade ;  or  from  that 
host  of  other  conventions,  which  have  been  so  often  judi- 
cially condemned,  not  on  account  of  any  enormous  immor- 
ality, but  on  the  score  of  their  inconsistency  with  public 
interest  and  good  government  ?  I  can  see  no  reason  why 
contracts  to  defraud  creditors  should  stand  on  a  different 
footing  from  the  rest  of  those  embraced  in  the  class  to 
which  they  evidently  belong.  They  are  hostile  to  fair  deal- 
ing and  commercial  honesty,  and,  on  this  account,  should 
be  subjected  to  the  ban  of  outlawry."^ 

§397.  Massachusetts  cases. —  In  Massachusetts  a  long 
series  of  cases  has  established  the  rule  that  a  transfer  either 
of  real  or  personal  property,  made  with  a  view  to  defraud 
the  creditors  of  the  grantor,  although  the  grantee  has  par- 
ticipated in  this  intention,  is  good  between  the  parties,  and 
void  only  in  favor  of  creditors  ;  or  to  speak  accurately,  is 
voidable  by  creditors  at  their  election.  If  no  creditors  in- 
tervene the  conveyance  stands  ;  if  creditors  elect  to  affirm 

'  Compare  Nellis  v.  Clark,  20  Wend,  i  Ohio  St.  262 ;   Hamilton  v.  Scull,  25 

(N.   Y.)  37,  and  dissenting  opinion  of  Mo.  165  ;  Andruss  v.  Doolittle,  11  Conn. 

Chief-Justice  Nelson  ;   Briggs  v.  Mer-  283 ;  Merrick  v.  Butler,  2  Lans.  (N.  Y.) 

rill,  58  Barb.  (N.  Y.)  389  ;  Ager  v.  Dun-  103. 
can,  50  Cal.  325  ;   Goudy  v.  Gebhart, 


§   39^  GENERAL    RULE    AND    POLICY.  545 

the  transfer  and  receive  the  consideration,  it  is  thereby  rati- 
fied and  confirmed.  Payment  of  the  grantor's  debts  to  the 
full  value  of  the  property  purges  the  fraud.^  This  doctrine 
extends  to  executory  contracts.^  In  Freeland  v.  Freeland^ 
the  court  say  :  "A  conveyance  made  in  fraud  of  creditors 
is  valid  as  between  the  parties,  and  can  be  avoided  only  by 
creditors,  or  by  the  assignee  in  insolvency  representing 
them  ;  and,  if  he  affirms  it,  it  stands  good."* 

§  398.  General  rule  and  policy. — These  covinous  convey- 
ances are  binding  upon  heirs, ^  legatees,*'  and,  as  is  elsewhere 
shown,'''  in  certain  cases  upon  personal  representatives®  and 
assignees.^  The  fraudulent  conveyance  is  treated  as  so  far 
valid  that  creditors  of  the  vendee  may  seize  upon  the  prop- 
erty and  may  even  cancel  a  reconveyance  of  it  to  the 
grantor.-*" 

Though  a  reconveyance  cannot  be  enforced,  the  fraudu- 
lent vendee  is  said,  in  some  of  the  cases,  to  be  under  a  high 
moral  and  equitable  obligation  to  restore  the  property" 
The  law  is  not  so  unjust  as  to  deny  to  men  the  right,  while 


1  Drinkwater  V.  Drinkwater,  4  Mass.  son,  54  Ala.  277;   Loomis  v.  Tifft,  16 
354  ;  Oriental  Bank  v.  Haskins,  3  Met.  Barb.  (N.  Y.)  545. 

(Mass.)    332;    Crovvninshield   v.    Kit-         '  See  §  115  ;  also  Chap.  XXL 
tridge,  7  Met.  (Mass.)  520.  '"  Chapin  v.  Pease,  10  Conn.  69.     See 

'  Knapp  V.  Lee,  3  Pick.  (Mass.)  452;  §  387.     In  Allison  v.  Hagan.  12  Nev. 

Dyer  v.  Homer,  22  Pick.  (Mass.y  253.  46,  the  court  said  :  "  Nor  will  the  courts, 

See  The  Lion,  i  Sprague  40;    Harvey  as  between  the  parties  to  a  fraudulent 

V.  Varney,  98  Mass.  120.  conveyance,  or  between   a    fraudulent 

2  102  Mass.  477.  grantee  and  his  creditors,  permit  either 
'  Citing  Butler  v.  Hildreth,   5   Met.  the  fraudulent  grantor  or  grantee  to  be 

(Mass.)  49;    Snow  v.    Lang,   2    Allen  heard  in  avoidance  ofthe  fraudulent  act." 
(Mass.)    18;    Harvey    v.    Varney,    98         "In  Fargo  v.   Ladd.  6  Wis.  106,  it 

Mass.  118.     See  §  107.  was   held   that    where  the  grantee  of 

»  Moseley  V.  Moseley,  1 5   N.  Y.  334.  properly    fraudulently    conveyed    had 

See  §  121.  voluntarily  reconveyed  to  the  grantor, 

«  Guidry   v.    Grivot,  2  Martin  N.  S.  in  apparent  execution  of  his  trust,  he 

(La.)  13;  S.  C.  14  Am.  Dec.  193.     See  could  not  thereafter  make  a  valid  claim 

R  121^  n.  to  the  property,  or  its  proceeds,  on  the 

-  See  §§  112,  113.  ground  of  the  original  fraudulent  con- 

"  Blake  v.  Blake,  53  Miss.  193  ;  Merry  veyance.     See  Second  National  Bank  v. 

V,  Fremon,  44  Mo.  522  ;  Davis  v.  Swan-  Brady,  96  Ind.  505. 
35 


546  WHEN    AID    WILL    BE    EXTENDED.  §  399 

it  is  in  their  power  to  do  so,  to  recognize  and  fulfill  their 
obligations  of  honor  and  good  faith.  And  until  the  cred- 
itors of  the  vendee  acquire  actual  liens  upon  the  property 
they  have  no  legal  or  equitable  claims  in  respect  to  it, 
higher  than,  or  superior  to,  those  of  the  grantor.-'  It  has 
been  contended  that  the  transfer  only  made  visible  an 
ownership  which  already  existed  though  secretly.^ 

The  boundaries  of  these  rules  as  to  the  conclusiveness 
of  voluntary  or  covinous  conveyances  between  the  parties 
have,  however,  been  broken  over  in  some  instances.  And 
the  rule  itself  has  been  questioned  upon  the  theory  that 
both  parties  are  seldom  equally  to  blame  in  a  transaction 
tinctured  with  fraud  in  each,  and  if  they  are  the  doctrine 
seems  to  encourage  a  double  fraud  on  the  one  side  to  punish 
the  single  fraud  on  the  other.^ 

§  399.  When  aid  will  be  extended  to  grantors. — This  rule, 
it  has  been  said,  did  not  in  the  nature  of  things  apply 
where  the  grantor  was  not  in  pari  delicto  with  the  grantee, 
as  where  a  creditor  av^ailed  himself  of  his  power  over  a 
debtor  and  induced  him  by  misrepresentation  to  make  a 
fraudulent    conveyance    to    him.*     Thus    in     Roman    v. 


'  Davis  V.  Graves,  29  Barb.  (N.  Y.)  act  should  be  void  only  as  against  those 

485;  Stanton  V.  Shaw,  3  Baxter  (Tenn.)  who  should  thereafter  purchase   upon 

12.    Mr.  Roberts  says  (Roberts'  Fraud-  good,  i.  e.  valuable,  consideration. 

ulentConveyances,  p.641),  that  "  volun-  'See  Keel   v.   Larkin,  83  Ala.  146, 

tary  conveyances  were  always  binding  and  cases  cited  ;  Lillis  v.  Gallagher,  39 

upon  the  party,  and  all  claiming  volun-  N.  J.  Eq.  94. 

tarily  under  him  ;  and  the  statutes  of  *  Gowan    v.    Gowan,    30   Mo.   476. 

Elizabeth  against   fraudulent   convey-  Compare    Nichols    v.    McCarthy,    53 

ances  have  expressly  iguarded  against  Conn.  299. 

a   construction  in   derogation  of  this  ^  Austin  v.  Winston,  i   Hen.  &  M. 

rule."     Thus  in  the  statute  13  Eliza-  .(V^l-)    33;    Holliway   v.    Holliway,  jj 

beth,  c.    5,   it   was  provided  that  the  Mo.  396.     In  Mississippi  it  is  held  that 

fraudulent  gifts  and  grants  therein  de-  a  defendant  cannot  resist  payment  of 

nounced  should  be   void   only  against  the  purchase  price  of  goods  sold  and 

those  persons  whose  actions,  debts,  and  delivered  to  him,  on  the  ground  that 

accounts   are   hindered   and    delayed  ;  the  sale  was  in  fraud  of  the  creditors  of 

'and  in  27  Eliz.  it  was  with  similar  cau-  the  seller.     Gary  v.  Jacobson,  55  Miss, 

tion  provided  that  the  voluntary  con-  204.     But  see,  contra,  Church  v.  Muir, 

veyances  in  the  contemplation  of  that  33  N.  J.   Law  318;  Nellis  v.  Clark,  4 


§  399  WHEN    AID    WILL    BE    EXTENDED.  547 

Mali  ^  the  doctrine  is  asserted  that  there  may  be  different  de- 
grees of  guilt  as  between  the  parties  to  a  fraudulent  or  illegal 
transaction,  and  if  one  party  act  under  circumstances  of 
oppression,  imposition,  undue  influence,  or  at  a  great  dis- 
advantage, with  the  other  party  concerned,  so  that  it  ap- 
pears his  guilt  is  subordinate  to  that  of  the  defendant,  the 
court  in  such  case  will  extend  relief.  Parker,  J,,  said  in 
James  v.  Bird  :^  "There  is  no  case  in  equity  where  anv  re- 
lief has  been  given  to  a  fraudulent  grantor  of  property,  the 
conveyance  being  made  to  protect  it  against  his  creditors, 
except  that  of  Austin  v.  Winston,^  decided  by  a  divided 
court,  and  perhaps,  under  the  circtimstajices,  properly  de- 
cided." The  authority  of  the  case,  however,  has  been  in 
some  measure  acknowledged  in  several  States.'^  The  court 
in  Fletcher  v.  Fletcher^  concede  that  it  would  assist  the 
grantor  in  cases  where  circumstances  were  shown  which 
warranted  its  interposition  on  recognized  and  settled 
grounds  of  equity  jurisprudence,  "  such  as  fraud  in  pro- 
curing the  deed,  imposition  by  the  grantee  in  violation  of 
some  fiduciary  relation,  delusion,  or  the  like,  on  the  part  of 
the  grantor,  at  the  time  of  executing  the  deed."  In  Pinck- 
ston  v.  Brown  ^  it  appeared  that  at  the  time  the  deed  was 
executed  the  plaintiff  was  old,  infirm,  weak  of  mind,  and 
much  diseased  and  distressed  in  body.  The  deed  was  made 
with  a  view  to  hinder  and  delay  the  collection  of  a  debt. 
The  party  benefited  was  the  plaintiff's  oldest  son,  in  wliose 
ability  and  integrity  she  had  the  greatest  confidence.  The 
transfer  had  undoubtedly  been  consummated  by  means  of 


Hill  (N.  Y.)  424 ;  Walton  v.  Bonham,  v.    Thomas,  6    Mich.   in.     But  com- 

24  Ala.  513.     See  Moseley  v.  Moseley,  pare  Clay  v.  WilMams,  2  Munf.  (V'a.) 

15N.  Y.  334.  121;    Starke   v.   Littlepage,   4    Rand. 

'  42  Md.  513.  (Va.)  371  ;  Jones  v.  Comer,    5  Uigh 

«  8  Leigh  (Va.)  510.  (Va.)  357  ;  Griffin  v.  Macaulay.  7  Gratt. 

3  I  Hen.  &  M.  (Va.)  33.  (Va.)  564. 

*  See  Bellamy  v.  Bellamy,  6  Fla.  104 ;  '2  MacAr.  (D.  C.)  39,  40. 

Freeman  V.  Sedwick,  6  Gill  (Md.)  41  ;  '3    Jones'    Eq.     (N.   C.)   496.     See 

Cushwa  V.  Cushwa,  5  Md.  53  ;  Quirk  Nichols  v.  McCarthy,  53  Conn.  299. 


548  WHEN    AID    WILL    BE    EXTENDED.  §  399 

the  undue  influence  and  deceit  practiced  upon  and  exercised 
over  the  aged  and  confiding  mother  by  the  son.  The  court 
held  that  the  mother  and  son  were  in  delicto,  but  not  in 
pari  delicto,  and  at  the  suit  of  the  mother  set  the  transac- 
tion aside.^  In  a  case  which  came  before  the  Supreme 
Court  of  New  York,*^  A.  sued  B.  for  slander.  B.  to  protect 
himself  conveyed  property  to  C,  who  agreed  to  reconvey. 
B.  defeated  the  slander  suit.  It  was  held  that  C.  must  re- 
convey.  Johnson,  J.,  said  :  "  Oilman  had  at  the  time  no 
other  creditors,  and  his  sole  design  was  to  get  his  property 
out  of  the  way  of  any  judgments  which  might  possibly  be 
recovered  in  those  actions,  and  not  to  hinder,  delay,  or  de- 
fraud any  other  person  whatever.  It  turned  out  that  the 
several  plaintiffs  in  those  actions  had  no  'lawful'  claim 
against  Oilman.  They  were  not  creditors,  and,  as  to  them, 
the  conveyance  was  valid,  as  it  was,  also,  between  the  grantor 
and  grantee.  It  was  not  designed  to  defraud  the  plaintiff 
of  his  claim,  as  the  referee  expressly  finds.  As  this  con- 
veyance w^as  not  made  with  intent  to  hinder,  delay,  or  de- 
fraud any  existing  creditor,  or  any  person  having  a  lawful 
claim,  but  only  a  person  making  an  unlawful  and  unfounded 
claim,  which  the  defendant  Oilman  disputed  and  denied, 
and  ultimately  defeated,  it  may  present  a  grave  question, 
whether  it  falls  at  all  within  the  condemnation  of  the  statute. 
....  The  sole  object  of  the  statute  here,  in  declaring  con- 
veyances void,  is  to  protect,  and  prevent  the  defeat  of,  law- 
ful  debts,  claims,  or  demands,  and  not  those  which  are  un- 
lawful, or  trumped  up,  and  which  have  no  foundation  in 
law  or  justice,  and  the  verity  of  which  is  never  established 
by  any  judgment,  or  by  the  assent  of  the  person  against 
whom  they  are  made.  As  against  claims  and  demands  of 
the  latter  class,  the  statute  does  not  forbid  conveyances  or 
assignments,   nor    declare    them   void."     It  may  well  be 


'  See  Osborne  v.  Williams,  18  Ves.         -  Baker  v.   Gilman,  52  Barb.  (N.  Y.) 
382  ;  Story's  Equity  Jur.  §  300.  36. 


§  400  CASES  AND  ILLUSTRATIONS.  549 

seriously  questioned,  however,  whether  this  contention  can 
be  uniformly  upheld.  The  courts  would  be  justified  in  re- 
fusing to  inquire  whether  the  grantor's  apprehensions  as  to 
the  recovery  of  a  judgment  against  him  were  well  or  ill 
founded,  and  might  well  incline  to  leave  the  parties  in  the 
position  in  which  it  found  them.^ 

§  400.  Cases  and  illustrations. — In  Boyd  v.  De  La  Mon- 
tagnie^  it  appeared  that  a  husband  had  secured  a  gratuitous 
transfer  of  property  from  his  wife  by  means  of  false  repre- 
sentations on  his  part,  that  she  was  liable  for  a  debt,  when 
in  fact  no  such  liability  existed.  Though  the  transaction 
was  consummated  in  the  belief  that  the  efifect  of  the  trans- 
fer would  be  to  hinder  and  delay  the  creditors,  or  in  some 
way  to  save  the  property,  it  was  held  to  be  no  answer  that 
the  wife  consented  to  the  act  with  a  view  to  defraud  cred- 
itors. Chief-Justice  Church  said:  "The  parties  do  not 
stand  on  equal  terms,  and  the  husband  cannot  avail  himself 
of  the  plea  of  particeps  criminis  on  the  part  of  the  wife." 
A  court  of  equity  will  interpose  its  jurisdiction  to  set  aside 
instruments  between  persons  occupying  relations  in  which 
one  party  may  naturally  exercise  an  influence  over  the  con- 
duct of  another.  A  husband  is  held  to  occupy  such  a  re- 
lation to  his  wife,  and  these  equitable  principles  applv  to 
them  in  respect  to  gratuitous  transfers  by  the  wife  to  the 
husband.^  So  in  Freelove  v.  Cole  **  it  was  decided  that  as 
there  are  degrees  of  crime  and  of  wrong,  the  courts  can 
and  will  give  relief  in  many  cases  as  against  the  more 
guilty.  "  To  exclude  relief  in  such  cases,"  said  Smith,  J., 
"  the  parties  must  not  only  be  i7t  delicto  but  /;/  pari  de- 
licto!' Applying  this  doctrine  it  was  held  that  where  the 
plaintiff  was  infirm  of  mind  and  incompetent  to  manage 


•  Compare  Tantum  v.  Miller,  11  N.  '  73  N.  Y.  498. 

J.  Eq.  551  ;    Harris  v.  Harris,  23Gratt.  '  See  Barnes  v.  Brown,  32  Mich.  146. 

(Va.)  737,  764,  and  stt  contra,  Fletcher  ^  41   Barb.  (N.  Y.)  326  ;   affirmed,  41 

V.  Fletcher,  2  MacAr.  (D.  C.)  38.  N.  Y.  619,  without  an  opinion. 


DO 


O  CASES    AND    ILLUSTRATIONS.  .         §  4OO 


and  conduct  his  business  affairs  with  ordinary  prudence 
and  discretion,  and  the  defendant  was  his  son-in-law,  con- 
fidential friend,  and  legal  adviser,  and  had  procured  a  con- 
veyance to  himself  of  the  property  in  order  to  place  it  be- 
yond the  reach  of  the  plaintiff's  creditors,  relief  might  still 
be  accorded  the  plaintiff.^  Ford  v.  Harrington,^  an  im- 
portant and  leading  case  in  the  New  York  Court  of  Ap- 
peals, in  which  judges  of  the  eminence  of  Denio,  Johnson, 
Comstock,  Selden,  and  Brown  participated,  seems  clearly 
to  establish  the  same  general  principle.  It  was  there  ex- 
pressly held  that  where  an  attorney  procured  from  a  client 
a  conveyance  of  a  valuable  interest  in  land  for  a  manifestly 
inadequate  consideration,  the  conveyance  being  advised  by 
the  attorney  with  a  view  to  defeat  a  creditor  of  the  grantor, 
though  the  agreement  was  illegal,  yet  the  rule  prohibiting 
the  attorney  from  obtaining  any  unconscionable  advantage 
in  dealing  with  his  client  must  prevail,  and  the  attorney 
could  be  compelled  to  reconvey  the  land.^  And  where  the 
parties  to  a  conveyance  are  brothers,  the  grantor  being  crip- 
pled and  diseased  in  body,  weak  in  mind,  and  easily  influ- 
enced, and  under  the  control  of  the  grantee,  who  was  a 
person  vigorous  in  both  body  and  mind,  the  conveyance 
was  set  aside  at  the  suit  of  the  grantor,  it  appearing  that  no 
consideration  was  paid,  that  a  reconveyance  was  promised, 


'  In    O'Conner  v.    Ward,   60   Miss.  Cited  and  quoted  are  Osborne  v.  Will- 

1025-1035  (decided  in  April,  1883),  the  iams,  18  Ves.  382  ;  Pinckston  v.  Brown, 

Supreme    Court   of    Mississippi   said :  3  Jones'  Eq.    (N.   C.)  494 ;    Smith  v. 

"  We  do  not  agree  with  the  proposi-  Bromley,  2    Doug.  696 ;    Browning  v. 

tion  announced   by  Mr.  Bump  in  his  Morris,  Cowp,  790 ;    Boyd  v.   De  La 

work  on  Fraudulent  Conveyances,  that  Montagnie,  73  N.  Y.  498 ;  W.  v.  B.,  32 

where  a  person  has  sufficient  capacity  Beav.  574;   Ford  v,  Harrington,  16  N. 

to  contract,  and  makes  a  conveyance  Y.  285. 

with  intent  to  hinder,  delay,  or  defraud  -  16  N.  Y.  285.    See  Freelove  v.  Cole, 

his  creditors,  a  court  of  equity  will  not  41  Barb.  (N.  Y.)  318  ;  Gibson  v.  Jeyes, 

inquire  into   the  degrees  of  guilt  be-  6  Ves.  266 ;  Smith  v.  Kay,  7  H.  L.  Cas. 

tween  the  grantor  and  the  grantee.  The  771. 

rule  is  not  universal,  and,  as  stated,  is  ^  See  Boyd  v.  De  La  Montagnie,  4  T. 

not    supported     by    the    authorities."  &  C.  (N.  Y.)  153. 


§  40I 


THE    CASES    JUST    CONSIDERED. 


55^ 


and  that  the  transfer  was  induced  by  operating  upon  the 
grantor's  fears  that  he  was  in  danger  of  losing  the  property 
by  reason  of  a  breach  of  promise  suit  which  had  no  foun- 
dation in  fact.* 

§  401.  The  cases  just  considered  exceptional. — The  practi- 
tioner, however,  must  be  careful  to  remember  that  the  cases 
just  considered  are  exceptions  to  a  well-defined  and  almost 
universal  rule.  While  it  is  possible  to  deduce  from  them 
a  general  principle  that  degrees  of  guilt  will  be  recognized 
in  such  transactions,  and  that  grantors  may,  in  certain  cases, 
reclaim  the  property  fraudulently  alienated  where  the  trans- 
action was  superinduced  by  the  unfair  action  of  a  vendee 
who  occupied  some  relation  of  confidence  which  enabled 
him  to  unduly  influence  the  vendor,  yet  a  very  clear  case 


'  Holliway  v.  Hollivvay,  ^]^  Mo.  396. 
See  Cadwallader  v.  West,  48  Mo.  483  ; 
Bradshaw  v.  Yates,  67  Mo.  221  ;  Ford  v. 
Hennessy,  70  Mo.  581  ;  Ranken  v.  Pat- 
ton,  65  Mo.  378  ;  Garvin  v.  Williams, 
44  Mo.  465.  In  Fisher  v.  Bishop,  108 
N.  Y,  25,  29,  it  appeared  that  plaintiff, 
who  was  much  advanced  in  years,  be- 
came involved  as  indorser  for  his  son, 
who  failed  and  absconded.  Just  prior 
to  leaving  the  son  gave  the  father  scant 
security  for  the  liability.  W.,  a  justice 
of  the  peace,  was  employed  to  draw  the 
papers.  Thereafter  W.,  by  threats  to 
the  effect  that  the  conveyance  was 
fraudulent  and  could  be  set  aside,  per- 
suaded plaintiff  to  give  defendants  a 
mortgage  to  secure  a  debt  of  the  son 
which  the  father  was  under  no  obliga- 
tion to  assume.  Ruger,  Ch.  J.,  said : 
"The  extent  to  which  the  plaintiff  con- 
fided in  the  defendant  Wattles  is  clearly 
shown  by  the  fact  that  he  had  fre- 
quently employed  him  in  business  trans- 
actions, and  that  the  conveyances  which 
he  then  threatened  to  annul  and  over- 
throw were  drawn  by  him,  and  ac- 
cepted under  his  advice  and  co-opera- 


tion. It  was  a  gross  breach  of  good 
faith  for  a  person  thus  trusted,  and 
who  had  by  conducting  the  business, 
vouched  for  its  validity  and  lawfulness, 
to  turn  around  for  the  purpose  of  gain- 
ing a  personal  advantage,  and  assert 
that  he  had  been  engaged  in  an  illegal 
transaction,  which  he  could  at  his  own 
option  annul  and  destroy.  The  case 
shows  that  by  these  means  the  defend- 
ants have  obtained  security  for  a  large 
amount,  from  an  old  man  who  was 
under  no  legal  or  moral  obligation  to 
give  it,  and  without  any  consideration 
to  support  it  except  the  nominal  one  of 
a  dollar,  and  that  this  was  extorted  at 
a  time  when  he  was  laboring  under 
much  distress  and  anxiety  of  mind,  on 
account  of  the  trouble  that  encom- 
passed him.  The  parties  in  this  case 
did  not  meet  on  equal  terms,  and  the 
defendants  took  an  unfair  advantage  of 
the  position  in  which  they  had  been 
placed,  and  of  the  confidence  reposed 
in  them  by  the  plaintiff,  to  procure  from 
him  a  valuable  security  to  which  they 
had  no  legal  right." 


552  THE    CASES    JUST    CONSIDERED.  §  40 1 

with  well-defined  reasons  for  excepting  it  from  the  general 
rule  must  be  presented.  Debtors  contemplating  fraudulent 
alienations  should  draw  little  encouragement  from  these 
exceptional  cases,  for,  as  a  general  rule,  after  passing 
through  the  troubled  waters  of  insolvency  they  will  find 
themselves  stripped  of  the  power  to  reach  or  recover  the 
secreted  property  in  the  hands  of  their  fraudulent  grantees. 
The  ancient  rule,  in  paj'i  delicto  mclior  est  conditio  possi- 
dentis, is  not  to  be  easily  uprooted,  and  must  not  be  consid- 
ered as  overthrown  or  abrogated  by  these  cases.  The  great 
effort  has  been,  in  at  least  a  portion  if  not  all  of  the  cases 
just  considered,  to  show  that  the  parties  were  not  i7i  pari 
delicto  because  of  the  reliance  and  confidence  placed  in  the 
grantee,  especially  when  he  assumed  to  advise  or  act  in  a 
professional  capacity,  or  occupied  a  position  where  he  could 
exercise  undue  influence  over  the  vendor.  In  Renfrew  v. 
McDonald,^  the  fraudulent  grantor,  seeking  to  set  aside  a 
conveyance  made  to  hinder  creditors,  was  summarily  dis- 
missed on  the  opening  oral  statement  of  his  counsel.  The 
plaintiff  alleged  great  intimacy  with  and  confidence  in  the 
defendant,  and  charged  that  it  was  through  his  influence 
and  procurement  that  the  fraudulent  conveyance  had  been 
made,  and  that  defendant  had  knowingly  advised  plaintiff 
that  he  had  no  defense  to  certain  notes,  the  collection  of 
which  plaintiff  sought  to  hinder  and  delay  by  the  convey- 
ance in  question,  when  in  fact  a  defense  did  exist.  The 
court  said  :  "  Nothing  is  alleged  by  way  of  excuse  for  the 
attempted  fraud,  except  what  might  be  with  more  or  less 
truth  alleged  in  every  case.  The  recipient  of  property  with 
intent  to  defraud  creditors,  possesses  the  intimacy  and  con- 
fidence of  the  fraudulent  debtor,  and  advises  the  attempted 
fraud  and  consents  to  be  made  the  instrument  thereof.  To 
allow  the  grantor  in  such  a  case  to  set  aside  the  grant  and 
be  restored  to  all  he  has  parted  with  for  the  illegal  purpose. 


'II  Hun  (N.  Y.)  255. 


§  402         ENFORCING  FRAUDULENT  DEED.  553 

would  be  to  afford  great  encouragement  to  future  attempts 
of  that  character."  In  Fredericks  v.  Davis  ^  the  doctrine 
is  asserted  that  the  grantor  in  an  alleged  fraudulent  con- 
veyance, made  with  full  knowledge  of  the  facts,  is  estopped 
by  his  own  warranty  of  title  from  testifying  that  the  con- 
veyance is  fraudulent.^  This  doctrine  is  supported  by  the 
case  of  Phillips  v.  Wooster,^  wherein  the  court  say  :  "  The 
position  which  the  plaintiff  occupies  in  relation  to  the  trans- 
action complained  of  as  fraudulent,  excludes  him  from  al- 
leging the  fraud,  or  claiming  any  benefit  against  it.  Tlic 
conveyance  against  which  he  now  seeks  to  derive  advan- 
tage from  the  property,  was  made  by  himself,  with  a  full 
knowledge  of  all  the  facts  as  they  existed  at  the  time,  as 
we  are  bound  to  presume  since  he  has  shown  nothing  to 
the  contrary.'*  So  that  if  the  money  paid  was  the  debtor's, 
as  he  now  insists  it  was,  and  the  conveyance  to  the  wife 
therefore  fraudulent  as  against  creditors,  it  was  not  fraudu- 
lent as  against  him,  for  he  was  not  only  consenting  to  the 
act,  but  himself  performed  it." 

§  402.  Grantee  enforcing  fraudulent  deed. — The  rule  being 
established  that  the  courts  will  not  interfere  to  set  aside  a 
fraudulent  executed  contract  as  between  the  parties,  it  has 
been  contended  that  the  same  principle  would  preclude  the 
grantee  both  from  enforcing  his  apparent  right  to  the  pos- 
session of  the  land  under  the  deed,  and  from  collectinn'  tiie 
rents  or  damages.^  A  consideration  of  the  reason  and  pcil- 
icy  of  the  rule,  however,  led  the  courts  to  hold  otherwise. 
It  is  considered  a  mistake  to  suppose  that  the  jxirties  being 
ill  pari  delicto,  the  court  would  refuse  the  grantee  all  rem- 
edy. The  deed  as  between  the  parties  is  jierfectly  good. 
The  grantor,  by  a  stern  but  necessary  policy  of  the  law,  is 


'  3  Mont.  251.  15  Gray  (Mass.)  564  ;  Harvey  v.  \'ar- 

"■  Compare  Dodge  v.  Freednian's  Sav.     ney,  98  Mass.  118. 
&  Trust  Co.,  93  U.  S.  383;    Pitts  v.         =  36  N.  Y.  414. 

Wilder,  l  N.  Y.  525  ;  Gates  v.  Mowry,         ^  Citing  Grant  v.  Morse,  22  N.Y.  323. 

'  Peterson  v.  Brown,  17  Nev.  176. 


554  FRAUD  UPON  A  DEBTOR.  §  403 

excluded  from  presenting  the  proof  which  would  show  the 
fraud.  He  is  in  this  respect  the  actor  ;  his  fraud  silences 
and  estops  him  from  averring  against  his  deed.^  The  rule 
operates  only  in  cases  where  the  refusal  of  the  court  to  aid 
either  party  frustrates  the  object  of  the  transaction,  and 
destroys  one  of  the  temptations  to  enter  into  contracts  vio- 
lating the  policy  of  the  law.^  To  permit  the  grantor,  when 
sued  by  the  grantee,  to  plead  the  mutual  fraud  of  the  par- 
ties, in  order  to  enable  him  to  avoid  the  effect  of  the  deed 
by  being  permitted  to  remain  in  possession  of  the  property 
without  the  payment  of  rent  or  damages,  would  virtually 
be  permitting  him  to  reap  the  reward  of  his  own  iniquity 
since  he  was  the  real  actor  in  the  fraud,  and  would  tend  to 
encourage  others  to  violate  the  law,  with  the  hope  of  prof- 
iting by  committing  frauds  upon  their  creditors.  It  would 
nullify  the  rule.^  There  is  a  distinction  between  an  exe- 
cuted and  an  executory  fraudulent  contract.  As  to  the 
latter  the  court,  where  the  parties  are  equally  participants 
in  the  fraud,  in  pari  delicto,  will  leave  them  in  the  predica- 
ment where  they  place  themselves,  refusing  any  relief  or 
interference.  And  where  the  contract  is  executed,  as  by  a 
deed  transferring  the  title,  the  court  acts  upon  the  same 
principle,  declining  either  to  cancel  the  deed  or  restore  the 
title.  But  the  effect  is  very  different  ;  in  one  case  a  specific 
performance  will  be  refused  ;  in  the  other  the  fraudulent 
grantee  remains  owner  of  the  estate  as  against  the  grantor, 
and  all  the  world  except  the  defrauded  creditors.^ 

§  403.  Fraud  upon  a  debtor  as  distinguished  from  fraud 
upon  creditors. — Fraud  practiced  by  a  third  party  upon  a 
debtor  is  manifestly  a  different  thing  from  fraud  upon  cred- 
itors, and  it  may  well  be  doubted  w^hether  a  creditor  can 


'  Broughton  v.  Broughton,  4  Rich.  372.     See  Cushwa  v.  Cushwa,  5  Md. 

Law    (.S.   C.)    497.     See   Bonesteel   v.  52;  Murphy  v.  Hubert,  16  Pa.  St.  57. 
Sullivan,  104  Pa.  St.  9.  ^  Murphy  v.  Hubert,  16  Pa.  St.  57  ; 

^  Peterson  v.  Brown,  17  Nev.  177  ;  Peterson  v.  Brown,  17  Nev.  I77-I79- 
Starke   v.    Littlepage,  4   Rand.   (Va.)         ■»  Walton  v.  Tusten,  49  Miss.  576. 


§  404  DECLARING    DEED    A    MORTGAGE.  555 

seize  property  the  title  to  which  has  passed  to  a  third  party, 
or  attack  such  a  conveyance  where  the  creditor  proceeds 
upon  the  ground  that  the  purchaser  committed  a  fraud 
upon  the  seller  which  entitled  the  latter  to  avoid  the  sale. 
In  Garretson  v.  Kane^  the  court  used  these  words:  "A 
creditor  cannot  redress  all  the  wrongs  done  to  his  debtor. 
He  cannot  claim  damages  for  a  trespass  or  for  a  deceit. 
A  fraud  like  that  offered  to  be  proved  in  this  case  would 
entitle  the  seller  to  relief  in  a  court  of  cquitv  upon  projicr 
terms,  and  possibly  a  creditor  may  have  relief  there  ;  but 
he  cannot  step  in  and  claim  that  such  a  sale  was  absolutely 
void  at  law.     If  he  can  interfere  at  all  his  rights  will  be  the 

same  as  those  of  his  debtor A  creditor  who  seeks 

to  avoid  a  sale  as  fraudulent  against  him,  does  not  represent 
his  debtor,  but  exercises  rights  paramount  to  his.  There 
is  in  truth  no  similarity  between  [the]  two  kinds  of  fraud. 
In  the  one  case  it  is,  either  in  fact  or  in  law,  tlic  fiaud  of 
the  debtor  himself,  while  in  the  other  the  debtor  is  the  vic- 
tim, and  guilty  of  no  wrong.  A  case  may  occur  combining 
both  descriptions  of  fraud."  ^  It  will  be  at  once  apparent 
that  this  element  of  the  law  enters  largely  into  the  cases  in 
which  the  debtor  or  grantor  has  a  standing  to  attack  or 
avoid  his  own  transfer. 

§  404.  Declaring  deed  a  mortgage. — As  is  elsewhere  stated, 
an  absolute  conveyance  may  be  shown  to  be  a  mortgage.'^ 
The  theory  of  the  decisions  is  that  dealings  between  the 
borrower  and  the  lender  of  money,  or  debtor  and  creditor, 
conducted  by  requiring  an  absolute  deed  for  security,  and 
a  renunciation  of  all  legal  right  of  redemj)tion.  are  so  sig- 
nificant of  oppression,  and  so  calculated  to  invite  to   or 


'  27  N.  J.  Law  211.  6  Wis.  645  ;  Hovey  v.  Holcomb,  11  III. 

-See  Graham  v.  Railroad  Co..  102  660;  McAlpine    v.  Sweetscr,   76    Ind. 

U.  S.  148.     Compare  Eaton  v.  Perry,  78. 

29  Mo.  96;  Prosser  v.  Edmonds,  i  Y.  -'Campbell  v.  Dearborn.   109  Mass. 

&  C.481;  French  v.  Shotwell,  5  Johns.  130;  Carr  v.  Carr.  52  N.  Y.  251.     See 

Ch.  (N.  Y.)  555  ;  Crocker  v.  Bellangee,  §  238. 


556  MORTGAGED  PROPERTY.  §  404^ 

result  in  wrong  and  injustice  on  the  part  of  the  stronger 
toward  the  weaker  party  in  the  transaction,  as  in  them- 
selves to  constitute  a  quasi  fraud  against  which  equity 
ought  to  relieve,  as  it  does  against  the  strict  letter  of  an 
express  condition  of  forfeiture.  The  grounds  of  relief 
being  purely  equitable,  it  may  and  should  be  refused  if  the 
equitable  considerations  upon  which  it  rests  are  wanting. 
Therefore  an  absolute  deed  made  by  a  debtor  to  one  cred- 
itor, with  the  intention  to  defraud  other  creditors,  will  not 
be  adjudged  an  equitable  mortgage  at  the  solicitation  of 
the  debtor.  Fraud  against  creditors  cannot  be  set  up,  it  is 
true,  by  any  one  not  standing  upon  the  rights  of  a  de- 
frauded creditor  to  defeat  any  legal  claim  or  interest  which 
the  fraudulent  debtor  may  seek  to  enforce.  But  such  a 
party  is  in  no  condition  to  ask  a  court  of  equity  to  inter- 
fere actively  in  his  behalf,  to  secure  to  him  the  fruits  of  his 
fraudulent  devices.  One  who  comes  for  relief  into  a  court 
whose  proceedings  are  intended  to  reach  the  conscience  of 
the  parties,  must  first  have  that  standard  applied  to  his  own 
conduct  in  the  transactions  out  of  which  his  grievance 
arises.  If  that  condemns  him  he  cannot  insist  upon  apply- 
ing it  to  the  other  party.^ 

§  404(7.  Redeeming  mortgaged  property. — The  courts  will 
not  seek  to  enlarge  the  scope  or  legal  effect  of  a  transac- 
tion that  is  tainted  with  a  design  to  defraud  creditors. 
Hence  where  property  is  pledged  or  mortgaged  by  a  debtor 
the  pledgor  or  mortgagor  will  be  permitted  to  redeem  it 
though  the  design  to  defraud  creditors  may  have  been 
present  in  his  mind  when  the  pledge  was  made  or  the  loan 
procured.  Such  a  transaction  does  not  in  itself  purport  to 
vest  an  absolute  title  in  the  pledgee  or  mortgagee,  and  the 
courts  \\\\\  not  strive  to  enlarge  or  vary  its  operation 
merely  to  inflict  punishment  upon  a  fraudulent  debtor  by 


'  Hassam  v.  Barrett,  115  Mass.  256,  258. 


§  404^  MORTGAGED  PROPERTY.  557 

cutting  off  the  right  to  redeem.^  Another  illustration  may 
be  cited.  In  Gowan  v.  Gowan^  it  was  expressly  decided 
that  where  a  debtor  deposits  personal  property  with  a  bailee 
to  protect  it  from  creditors,  the  bailee  cannot  defeat  the 
debtor's  action  to  recover  the  property  by  setting  up  the 
fraud. 

'  See  Smith  v.  Quartz  Mining  Co.,  14     109,   116;  Jones  v.  Rahilly,    16  Minn. 
Cal.  242 ;    Taylor  v.  Weld,    5   Mass.     320. 

'  30  Mo.  472. 


CHAPTER  XXVII. 


JURISDICTIONAL    QUESTIONS CONCLUSION. 


§  405.  Jurisdiction  beyond  State  bound- 
aries. 
406.  Outside   county   of   defendant's 
residence. 


§  407.  Appeal    to    United   States  Su- 
preme Court — Uniting'claims. 

407^;.  Certificate  of  division. 


§  405.  Jurisdiction  beyond  State  boundaries. — A  few  mis- 
cellaneous observ^ations  will  bring  this  branch  of  the  discus- 
sion to  a  close. 

Creditors  may  be  reminded  that  the  courts  of  one  State 
cannot  entertain  jurisdiction  of  an  action  to  recover  lands 
lying  in  another  State  where  the  proceeding  is  in  rem^  for 
actions  for  the  recovery  of  real  property,  or  for  the  deter- 
mination of  an  interest  therein,  are  local  and  must  be 
brought  in  the  State  and  county  where  the  premises  are 
situated.^  But  where  the  court  has  jurisdiction  of  the 
proper  parties,  it  may,  by  its  judgment  or  decree,  as  we 
have  seen,  compel  them  to  do  equity  in  relation  to  lands 
located  without  its  jurisdiction.  The  court  in  such  case 
acts  in  personam^  and  may  compel  a  specific  performance 
of  a  contract  for  the  sale  of  land  beyond  the  borders  of  the 
State,^  or  a  conveyance  of  lands  outside  the  State  jurisdic- 


1  Gardner  v^.  Ogden,  22  N.  Y.  333.  '  Gardner  v.  Ogden,  22  N.  Y.  333  ; 

■  Sedgwick  &  Wait  on  Trial  of  Title  Arglasse   v.    Muschamp,    i  Vern.  75  ; 

to  Land,  2d  ed.,  §  465,  and  cases  cited.  Penn   v.    Lord    Baltinnore,    i   Ves.  Sr. 

See  American  Union  Tel.  Co.  v.  Mid-  444;    Paschal  v.  Acklin,  27  Texas  173  ; 

dleton,  80  N.  Y.  408  ;  Blake  v.  Free-  Dale  v.  Roosevelt,  5  Johns  Ch.  (N.  Y.) 

man,   13   Me.    130.     Foreign    statutes  174;    Newton    v.    Bronson,    13  N.  Y. 

have  no  force  ex  proprz'o  vigore,  but  587  ;  Sutphen  v.  Fowler,  9  Paige's  Ch. 

the  title  of  a  foreign  assignee  may  be  (N.  Y.)  280;  Great  Falls  Mfg.  Co.  v, 

recognized  by  comity  if  this  can   be  Worster,  23  N.  H.  462. 
done  without  injustice  to  home  citizens.         ''  Newton  v.  Bronson,  13  N.  Y.  587,    . 
Matter  of  Waite,  99  N.  Y.  433. 


§  40^  defendant's  residence.  559 

tion  when  the  title  has  been  fraudulently  obtained  by  a  de- 
fendant ;  ^  and  a  debtor  may  be  compelled  to  convey  lands 
in  another  State  for  the  benefit  of  creditors,  so  as  to  vest 
in  the  grantee  the  legal  title.^  So  the  court  has  power  to 
decree  the  cancellation  of  a  void  mortgage  which  is  an  ap- 
parent lien  and  cloud  upon  property  beyond  the  jurisdic- 
tion of  the  court.  "This  power,"  says  Johnson,  J.,  "has 
been  frequently  exercised  to  compel  parties  to  perform 
their  'contracts  specifically,  and  execute  conveyances  of 
lands  in  other  States,  and  also  to  set  aside  fraudulent  con- 
veyances of  lands  in  other  States."^  "Where  the  neces- 
sary parties  are  before  a  court  of  equity,"  said  Swaync,  J., 
"  it  is  immaterial  that  the  res  of  the  controversy,  whether 
it  be  real  or  personal  property,  is  beyond  the  territorial 
jurisdiction  of  the  tribunal.  It  has  the  power  to  compel 
the  defendant  to  do  all  things  necessary,  according  to  the 
lex  loci  rei  sit(s,  which  he  could  do  voluntarily,  to  give  full 
effect  to  the  decree  ai^ainst  him."'*  Without  regard  to  the 
situation  of  the  subject-matter,  such  courts  consider  the 
equities  between  the  parties,  and  enforce  obedience  to  their 
decrees  by  process  i?i  perso7iam^ 

§  406.  Outside  county  of  defendant's  residence. — In  a  case 
which  arose  in  Georgia,^  it  appeared  that  the  constitution 
and  laws  of  that  State  required  that  suits  must  be  brought 
in  the  county  in  which  the  defendant  resided,  and  it  was 
held  that  it  was  good  ground  of  demurrer  to  a  bill  in  equity 
to  set  aside  a  fraudulent  conveyance  of  land  that  it  was  not 
filed  in  the  county  of  the  defendant's  residence.  The  de- 
fect was  held  not  to  be  cured  by  the  fact  that  the  bill  was 
filed  in  the  county  where  the  land  was  situated,  or  because 
a  lessee  of  the  defendant  in  possession  of  the  j)r()jUMly  was 


'  Gardner  v.  Ogden,  22  N.  Y.  327.  ■*  Phelps  v.  McDonald,  99  U.  S.  308. 

'  Bailey  v.  Ryder,  10  N.  Y.  363.  '  Miller    v.    Sherry.    2    Wall.    249  ; 

'  Williams  v.  Ayrault,  31   Barb.  (N.  Mitchell  v.  Bunch,  2  Paige  (N.  Y.)  606. 

Y.)  364,  368.  °  Taylor  v.  Cloud,  40  Ga.  288. 


560  UNITING    CLAIMS.  §§  407,  407^ 

a  party  to  the  bill,  when  no  substantial  relief  was  sought 
against  such  tenant.^  This  is  exceptional  practice,  for,  at 
least  so  far  as  realty  is  concerned,  the  action  to  set  aside  a 
conveyance  would  be  local,  and  local  actions  should  be 
brought  in  the  county  where  the  land  lies.^ 

§  407.  Appeal  to  United  States  Supreme  Court — Uniting 
claims.— When  judgment-creditors  join  in  a  suit  to  set  aside 
a  fraudulent  conveyance  by  their  debtor,  and  the  amounts 
found  due  to  the  creditors  respectively  are  less  than  the 
jurisdictional  limit  of  the  United  States  Supreme  Court, 
the  several  claims  cannot  be  united  to  give  jurisdiction  on 
appeal.^  In  Seaver  v.  Bigelows,'*  Nelson,  J.,  said  :  "  The 
judgment-creditors  who  have  joined  in  this  bill  have  sepa- 
rate and  distinct  interests  depending  upon  separate  and 
distinct  judgments.     In  no  event  could  the  sum  in  dispute 

of  either  party  exceed  the  amount  of  their  judgment 

The  bill  being  dismissed  each  fails  in  obtaining  payment 
of  his  demands.  If  it  had  been  sustained,  and  a  decree 
rendered  in  their  favor,  it  would  only  have  been  for  the 
amount  of  the  judgment  of  each."  In  Schwed  v.  Smith  ^ 
the  same  court  held  that  if  the  decree  was  several  as  to 
creditors  it  was  difficult  to  see  why  it  was  not  also  several 
as  to  their  adversaries,  the  theory  being  that  although  the 
proceeding  was  in  form  but  one  suit,  its  legal  effect  was 
the  same  as  though  separate  suits  had  been  instituted  on 
each  of  the  separate  causes  of  action.^ 

§  407^.  Certificate  of  division. — Whether  a  sale  and  deliv- 
ery of  a  debtor's  stock  of  goods,  by  way  of  preference  of  a 
bona  fide  creditor,  is  fraudulent  against  other  creditors,  in- 


>  See  Smith  v.  Bryan,  34  Ga.  53.  S.  548  ;  Ex  parte  Phoenix  Ins.  Co.,  117 

""  Sedgwick  &  Wait  on  Trial  of  Title  U.  S.  369  ,  Tupper  v.  Wise,  1 10  U.  S. 

to  Land,  2d  ed.,  §  465.  398  ;  Stewart  v.  Dunham,  1 15  U.  S.  61. 

'  Schwed  V.  Smith,  106  U.  S.  188;  *  5  Wall.  208. 

Gibson  v.  Shufeldt,  122  U.  S.  27.     See  "  106  U.  S.  188. 

Fourth  National  Bank  v.  Stout,  113  U.  "  See  Ex  parte  Baltimore  &  O.  R.R. 

S.  684;  Hawley  v.  Fairbanks,  108  U.  Co.,  106  U.  5.  5. 


§  407a  CONCLUSION.  561 

yolves  a  question  of  fact,  depending  upon  all  the  circum- 
stances and  cannot  be  referred  to  the  United  States  Su- 
preme Court  by  certificate  of  division  of  opinion.^ 

This  closes  the  discussion  concerning  fraudulent  convey- 
ances and  creditors'  bills.  We  have  traced  the  famous 
statute  of  Elizabeth  from  its  enactment  to  the  present  time, 
and  have  seen  how  important  the  place  it  fills  has  become 
in  our  jurisprudence.  The  volume  of  litigation  engendered 
by  covinous  alienations  is  scarcely  creditable  to  the  integrity 
of  our  people.  The  ability  of  the  courts  to  successfully 
grapple  with  fraudulent  debtors  without  the  coercive  aid 
of  imprisonment  frequently  becomes  a  matter  of  grave 
doubt.  Hence  it  is  that  the  existence  of  cases  accomplish- 
ing results  like  those  of  Cutting  v.  Cutting,^  and  Broadway 
Bank  v.  Adams,^  is  to  be  so  deeply  deplored.  That  the 
law  regulating  the  remedies  of  creditors  against  covinous 
conveyances  and  for  the  conversion  of  equitable  assets  is 
developing  in  the  right  direction,  and  becoming  more  effect- 
ual against  the  debtor  class,  must  be  conceded.  It  is  still, 
however,  in  an  unsatisfactory  condition.  The  many  forms 
in  which  a  debtor's  assets  can  be  secreted  or  spirited  away, 
and  the  endless  varieties  of  fraudulent  devices,  render  the 
solution  of  the  problem  a  matter  of  extreme  difficulty. 
Time  and  experience  alone  can  work  out  a  satisfactory 
conclusion.  The  development  must  of  necessity  be  in  the 
courts  ;  we  doubt  the  ability  of  the  legislative  power  to 
further  materially  progress  this  branch  of  our  law. 


'  Jewell  V.  Knight,  123  U.  S.  426.  '  See  §  40.  '  See  §  367. 


86 


VOID    AND    VOIDABLE   ACTS. 


CHAPTER   I. 


VOID    AND    VOIDABLE    ACTS    DISCUSSED. 


§  408.  Void  and  voidable  acts. 

409.  Importance  of  the  subject. 

410.  Scope  of  the  inquiry. 

411.  The  distinction  generally  stated 

— Illustrations. 

412.  Misleading    definitions    in    the 

early  cases. 

413.  Doctrine  of  degrees  of  void  acts. 

414.  Other  inaccuracies. 

415.  Nullities  or  void  acts  defined. 

416.  Illustrations  of  void  acts. 

417.  Retrospective  legislation  affect- 

ing remedies. 

418.  Adjudications  to  avoid  nullities. 

419.  No  degrees  of  nullities. 

420.  Void  and  voidable  acts  distin- 

guished. 

421.  Absence  of  jurisdiction  as  dis- 

tinguished    from     excess    of 
jurisdiction. 

422.  Jurisdiction  and  the  exercise  of 

jurisdiction. 

423.  Distinctions  in  jurisdiction  con- 

sidered. 

424.  Legislation  or  acts  in  aid  of  the 

rebellion. 

425.  Result  of  the  cases— Principles 

applicable  to  a  nullity. 

426.  Voidable  acts  further  defined. 


§427. 
428. 

429. 
430- 
431- 
432. 
433. 
434- 
435- 
436. 
437- 
438. 

439- 
440. 

441. 
442. 

443- 

444- 
445- 
446. 
446-1 
446^. 


Effect  of  avoidance. 
Four  classes  of  defective  or  in- 
effectual acts. 
Void  and  illegal  acts  discussed. 
Policy  of  the  law. 
Guilty  knowledge. 
Illegal  acts. 

Presumption  of  legality. 
Void  in  part,  void  in  Mo. 
Void  acts  which  are  not  illegal. 

[  Acts  void  by  statute  of  frauds. 

Void  corporate  acts. 

[  Consummated  illegal  acts. 

Void  and  voidable  marriages. 

Irregularities  and  nullities  dis- 
tinguished. 

Justification  under  irregular  or 
erroneous  process. 

Words   "  erroneous  "   and    "  ir- 
regular "  discussed. 

Void  used  in  the  sense  of  void- 
able. 

Terms  "  become  void  "  and  "  de- 
termined "  distinguished. 
Void  or  voidable  negotiable  in- 
struments. 

,  Defective  public  securities. 


§408.  Void  and  voidable  acts.— Covinous  alienations  be- 
long to  one  of  the  common  classes  of  voitlable  acts  or 
transactions.     The  use  of  the  word  "  void  "  in  the  sense  of 


564  VOID  AND  VOIDABLE  ACTS.  §  408 

"voidable"  in  the  statute  of  Elizabeth^  has  also  aided  in 
creatine  some  of  the  confusion  to  be  found  in  the  author- 
ities  concerning  the  legal  signification  of,  and  distinction 
between,  these  two  words.  The  inquiry  upon  which  we 
are  about  to  enter  has  been  suggested  in  part  by  these 
considerations.  Though  the  discussion  opens  a  wide 
field,  we  shall  necessarily  treat  it  in  a  limited  and  very  gen- 
eral way,  making  only  incidental  reference  to  fraudulent 
conveyances.  A  glance  at  the  authorities  has  convinced 
the  writer  that  exhaustive  treatment  upon  so  general  a 
theme  is  not,  in  the  nature  of  things,  possible.  We  would 
willingly  suppress  what  has  been  here  attempted,  had  not 
other  counsels  protested  that  it  should  be  preserved. 

A  clear  comprehension  of  the  legal  characteristics  of  void 
and  voidable  acts,  and  an  accurate  statement  of  the  dis- 
tinctions which  exist  in  modern  jurisprudence  between  such 
acts,  is  manifestly  of  the  highest  importance.  These 
classes  of  acts  are  usually  treated  and  considered  as  mere 
incidents  in  connection  with  the  discussion  of  rights  flow- 
ing from  valid  acts.  No  controlling  objection,  however, 
can  be  suggested  to  the  independent  classification  and  dis- 
cussion of  such  acts.  A  task  of  this  kind  successfully 
accomplished  would  tend  to  render  the  body  of  our  law 
more  compact  and  accessible,  lighten  the  labors  of  the 
student,  and  be  especially  valuable  as  bringing,  side  by  side, 
cases  decided  from  common  motives  or  considerations, 
arising  out  of  dissimilar  transactions.  The  great  confusion 
which  has  been  introduced  into  this  branch  of  the  law  is 
due  in  part  to  the  meagre,  imperfect,  and  misleading  defi- 
nitions of  "nullities*'  or  "void  acts"  contained  m  the 
earlier  reports;  in  part  to  the  carelessness  of  judges  and 
law  writers,  and  largely  to  the  improper  use  by  legislative 
bodies  of  the  word  "  void,"  in  statutory  enactments,  where 
"  voidable  "  was  intended. 

'  See  §§  317,  445- 


§  409  IMPORTANCE    OF    THE    SUBJECT.  565 

Blunders  in  determining  whether  an  act  is  void  or  void- 
able, or  in  deciding  which  of  these  two  great  classes  em- 
brace it,- are  often  fraught  with  disastrous  consequences  to 
the  rights  of  the  parties  interested.  At  the  threshold  of 
the  inquiry  there  is  presented  a  distinction  in  jurisdiction, 
and  a  distinction  as  to  the  form  of  action  or  procedure,  or 
the  character  of  the  plea  or  answer  to  be  interposed,  in  a 
legal  controversy  involving  the  transaction.  If  the  act  is 
an  absolute  nullity  it  may,  as  a  general  rule,  be  totally 
ignored  and  disregarded,  and  no  loss  of  rights  will  result 
from  laches  or  inaction  or  in  any  way.  On  the  contrary, 
should  the  act  be  voidable  merely,  but  not  absolutely  void, 
speedy  action  to  affirm  and  ratify  it,  or  disaffirm  and  avoid 
it,  by  plea,  suit,  notice,  or  other  act,  may  become  necessary 
to  protect  and  preserve  the  rights  of  the  parties. 

§  409.  Importance  of  the  subject. — These  two  words  "  void  " 
and  "voidable,"  or  rather  the  legal  results  flowing  from 
their  constant  use  and  application  in  the  law,  plav  an  im- 
portant part  in  our  jurisprudence,  and  are  constantlv  com- 
ing up  for  interpretation  and  exposition  in  every  phase  of 
litigation,  and  are  the  subject  of  consideration  in  practically 
all  the  varying  transactions  of  life.  A  careful  study  of  the 
cases,  and  their  number  is  large,  where  the  boundaries  be- 
tween nullities,  or  acts  which  are  absolutely  without  legal 
effect,  and  voidable  acts,  or  transactions  which  are  or  may 
become  valid  for  some  or  all  purposes,  have  been  over- 
looked or  disregarded,  abundantly  justifies  special  treat- 
ment of  the  subject,  and  renders  necessary  a  discussion  of 
the  different  methods  of  redress  applicable  to  each  class  of 
acts.*     This  discussion,  and  the  classification'  of  the  cases 


1  Void  and  voidable  confounded. —  third  persons  the  distinction  is  highly 

"  Probably  no  words  are  more  inaccu-  important,    because    nothing    can    be 

rately   used    in    the   books   than   void  founded  upon   a  deed  which  is  af>so- 

SinA  voidable."     Chief-Justice  Ryan  in  Itttely  void ;  whereas  from  those  which 

Bromley    v.   Goodrich,    40  Wis.    139.  are  only  voidable  fair  titles  may  flow. 

*'  In    regard   to   the   consequences   to  These  terms  have  not  always  been  used 


c,66 


IMPORTANCE    OF    THE    SUBJECT. 


§  409 


showing-  the  application  of  the  principles  by  virtue  of  which 
void  and  voidable  acts  are  defined  and  distinguished,  will 
of  necessity  incidentally  involve  the  rules  and  tests  govern- 
ing acts,  contracts,  or  transactions  which  possess  all  the 
necessary  elements  of  vitality,  are  legal  and  binding,  being 
neither  void  nor  voidable,  and  the  consummation  of  which 
does  not  contravene  any  settled  principle  of  law.  Rights 
resting  upon  or  flowing  from  acts  or  contracts  of  this  char- 
acter will  not  be  considered,  except  in  so  far  as  may  be 
requisite  to  point  out  the  fatal  error  or  imperfection  in  the 
void  or  voidable  act  under  discussion,  by  comparison  or 
analogy  with  an  act  which  concededly  would  be  valid  and 
effectual  for  every  purpose. 


with  nice  discrimination;  indeed  in 
some  books  there  is  a  great  want  of 
precision  in  the  use  of  them."  Chief- 
Justice  Parker  in  Somes  v.  Brewer,  2 
Pick.  (Mass.)  191.  See  Crocker  v.  Bel- 
langee,  6  Wis.  668.  "  The  use  of  the 
word  '  void '  in  a  loose  and  uncertain 
sense  is  no  novelty,  either  in  legislation 
or  the  language  of  jurists."  Terrill  v. 
Auchauer,  14  O.  S.  85.  See  Van  Shaack 
V.  Robbins,  36  Iowa  204 ;  Green  v. 
Kemp,  13  Mass,  518  ;  Brown  v.  Brown, 
50  N.  H.  552  ;  Kearney  v.  Vaughan, 
50  Mo.  284.  "  The  word  '  void  '  has 
certainly  been  construed  as  '  voidable  ' 
in  some  instances,"  Denman,  Ch.  J., 
in  Pearse  v.  Morrice,  2  Ad.  &  El.  94. 
"  It  is  by  no  means  easy  to  lay  down 
any  one  rule,  whereby  to  distinguish 
between  an  irregularity  and  that  which 
makes  a  proceeding  a  nullity,"  Cole- 
ridge, J.,  in  Chambers  v,  Coleman,  9 
Dowl.  594.  "  Deductions  founded  on 
the  broadest  meaning  of  this  word 
(void)  would  lead  to  greater  errors 
than  are  found  in  the  most  erroneous 
cases,  while  those  founded  on  its  nar- 
rower and  more  usual  meaning  seldom 
err.  When  we  say  that  any  given  class 
of  contracts  is  void,  let  us  be  sure  of 
the  meaning  of  the  word  before   we 


undertake  to  declare  all  the  conse- 
quences that  follow  from  its  applica- 
tion. Observation  of  its  use  will  give 
us  its  meaning."  Again  it  is  said  in 
this  same  case  :  "  Acts  tainted  with  an 
infirmity  may  very  well,  and  in  very 
correct  language,  be  called  by  some 
void,  and  by  others  voidable,  because, 
regarded  in  different  aspects,  they  are 
both.  A  contract  may  for  a  time  be 
voidable  as  against  one,  and  void  as 
against  the  others,  whom  it  is  intended 
to  affect ;  voidable  as  against  the  par- 
ties doing  wrong,  and  void  as  against 
the  persons  wronged  ;  or  vice  versa, 
voidable  in  favor  of  the  persons  wrong- 
ed, and  void  in  favor  of  the  wrong- 
doer ;  void  as  not  binding  to  fulfil  and 
voidable  after  fulfilment ;  voidable  in 
fact  because  void  or  not  binding  in 
right.  And  when  the  party  wronged 
elects  to  avoid  the  act,  it  becomes  bind- 
ing on  neither,  or  rescinded  as  to  both. 
Voidable  because  one  party  is  bound, 
and  the  other,  or  some  other  person  is 
not."  PearsoU  v,  Chapin,  44  Pa.  St. 
13.  "  Many  difficulties  ....  have  arisen 
out  of  the  use  of  the  words  'void  '  and 
'voidable,'  and  the  uncertain  extent  of 
meaning  attached  to  them."  Dillon, 
C.  J.,  in  Allen  v.  Berryhill,  27  Iowa  538. 


§§  4TO>  411  THE    DISTINXTION    STATED.  567 

§  410.  Scope  of  the  inquiry. — The  inquiry  will  therefore  be 
limited  chiefly  to  immature  and  imperfect  acts,  to  what  are 
sometimes  called  legal  abortions  ;  to  acts  which  are  void 
because  settled  principles  of  law  have  interfered  to  prevent 
their  formation  or  consummation  ;  to  cases  where  "a  con- 
tract fails  to  be  made  when  it  seems  to  have  been,  or,  hav- 
ing been  made,  can  be  rescinded  by  one  side  or  the  other, 
and  treated  as  if  it  had  never  been,"^  The  discussion  will 
embrace  not  only  a  general  classification  of  these  acts,  but 
in  addition  a  consideration  of  the  principles  and  rules  gov- 
erning their  avoidance  or  affirmance. 

§  411.  The  distinction  generally  stated— Illustrations. — It 
may  be  observed  in  a  very  general  way  that  acts  are  con- 
sidered void  largely  for  reasons  prompted  by  considerations 
of  public  policy,  for  example,  transactions  which  are  mala 
in  se,  or  in  some  cases  rnala  prohibit  a  ;  that  acts  arc  void- 
able chiefly  where  the  rights  of  individuals  who  are  regarded 
as  under  the  guardianship  of  the  law  would  be  injuriouslv 
afl"ected  by  their  enforcement.'^  These  tests  are  not  exclu- 
sive. The  acts  of  infants,  lunatics,  and  idiots  arc  familiar 
examples  of  the  latter  class.  They  are  peculiarly  Under 
the  protection  of  the  law.  The  infant  is  presumed  to  lack 
sufficient  discretion  to  act  or  contract ;  reason  is  wantino; 
in  degree.  In  the  case  of  a  lunatic,  however,  espcciallv 
after  inquisition,  or  of  an  idiot, ^  reason  is  wanting  alto- 
gether. Hence  it  is  said  that  a  lunatic  needs  more  pro- 
tection  than   a  minor.'*     The  policy  of  the  law  rendering 


'  Holmes'  Common  Law,  p.  308.  more  of  the  primary  elements  which 

'  Judge  Holmes  in  his  admirable  lee-  have  been  shown,  or  are  seen  at  once, 

tures  on  the  Common   Law,  says  (p.  to  be   necessary  to  the  existence  of  a 

308) :  "  When   a  contract  fails   to   be  contract." 

made,  although  the  usual  forms  have         '  See  Owing's  Case,  i    Blarwl's  Ch. 

been  gone  through  with,  the  ground  of  (Md.)   3S6 ;  Stewart  v.   Lispenard,  26 

failure  is  commonly  said  to  be  mistake,  Wend.  (N.  Y.)  314;  Crosswell  v.  Pco- 

misrepresentation,    or    fraud.      But    I  pie,  13  Mich. 436  ;  A'.r /»<//■/«•  liromlicld, 

shall  try  to  show  that  these  are  merely  i  Hov.  Supp.  184. 
dramatic  circumstances,  and  that   the        ^Dexter  v.  Hall,   15  Wall.  9.     But 

true  ground  is  the  absence  of  one  or  see  Breckenridge   v.  Ormsby,   i  J.  J. 


568 


THE    DISTINCTION    STATED. 


§  411 


ineffectual  acts  of  corporations  wliich  are  ultra  vires  may- 
be considered  as  founded  upon  both  of  these  considerations. 
The  general  public  are  interested  in  seeing  that  only  the 
corporate  powers  actually  conferred  upon  the  corporation 
by  its  franchise  are  exercised  ;  creditors  and  stockholders 
are  interested  in  the  application  and  use  of  the  property  of 
the  corporation  solely  toward  the  legitimate  purpose  of  its 
existence.^ 


Marsh  (Ky.)  236  ;  S.  C.  19  Am.  Dec. 
71.  In  Edwards  V.  Davenport,  20  Fed. 
Rep.  761,  the  court  said  :  "  The  rule  as 
to  the  responsibilityof  a  lunatic  or  per- 
son non  compos  irzentis,  upon  his  con- 
tracts, is  the  same  in  equity  as  in  law." 

'  See  §  426. 

Doctrine  of  ultra  vires. — In  Kent  v. 
Quicksilver  Min.  Co.,  78  N.  Y.  185, 
Folger,  J.,  said:  "  In  the  application  of 
the  doctrine  of  t{ltra  vires  it  is  to  be 
borne  in  mind  that  it  has  two  phases : 
one  where  the  public  is  concerned,  one 
where  the  question  is  between  the  cor- 
porate body  and  the  stockholders  in  it, 
or  between  it  and  its  stockholders  and 
third  parties  dealing  with  it  and 
through  it  with  them.  When  the  pub- 
lic is  concerned  to  restrain  a  corpora- 
tion within  the  limit  of  the  power  given 
to  it  by  its  charter,  an  assent  by  the 
stockholders  to  the  use  of  unauthorized 
power  by  the  corporate  body  will  be 

of  no  avail A  corporation  may 

do  acts  which  affect  the  public  to  its 
harm,  inasmuch  as  they  are  perse  illegal 
or  are  malum  prohibitum.  Then  no  as- 
sent of  stockholders  can  validate  them. 
It  may  do  acts  not  thus  illegal,  though 
there  is  want  of  power  to  do .  them, 
which  affect  only  the  interest  of  the 
stockholders.  They  may  be  made  good 
by  the  assent  of  the  stockholders,  so 
that  strangers  to  the  stockholders  deal- 
ing in  good  faith  with  the  corporation 
will  be  protected  in  a  reliance  upon 
those   acts."     See,  further,   Taylor   v. 


Chichester  &  M.  Ry.  Co.,  L.  R.  2  Exch. 
390 ;  Whitney  Arms  Co.  v.  Barlow,  63 
N.  Y.  63.  In  Bissell  v.  Mich.  Southern 
&  N.  I.  R.R.  Cos.,  22  N.  Y.  269,  Chief- 
Justice  Comstock  observed  :  "  The 
books  are  full  of  cases  upon  the  powers 
of  corporations  and  the  effect  of  dealing 
in  a  manner  and  for  objects  not  intended 
in  their  charters  ;  but  with  the  slight  ex- 
ception named,  there  is  an  entire  ab- 
sence, not  only  of  adjudged  cases,  but 
of  even  judicial  opinion  or  dicta,  for  the 
proposition  that  mere  want  of  authority 
renders  a  contract  illegal.  Such  a 
proposition  seems  to  me  absurd.  The 
words  ultra  vires  and  illegality  repre- 
sent totally  different  and  distinct  ideas. 
It  is  true  that  a  contract  may  have  both 
those  defects,  but  it  may  also  have  one 
without  the  other.  For  example,  a 
bank  has  no  authority  to  engage,  and 
usually  does  not  engage,  in  benevolent 
enterprises.  A  subscription,  made  by 
authority  of  the  board  of  directors  and 
under  the  corporate  seal,  for  the  build- 
ing of  a  church  or  college  or  an  alms- 
house, would  be  clearly  ultra  vires, 
but  it  would  not  be  illegal.  If  every 
corporator  should  expressly  assent  to 
such  an  application  of  the  funds,  it 
would  still  be  ultra  vires,  but  no  wrong 
would  be  committed  and  no  public  in- 
terest violated."  In  Matter  of  McGraw, 
III  N.  Y.  106,  Peckham,  J.,  said: 
"  The  theory  upon  which  the  plea  of 
tiltra  vires  is  examined  is  that  it  will 
not,  as  a  general  rule,  prevail  whether 


§§    412,  413  MISLEADING    DEFINITIONS.  569 

§  412.  Misleading  definitions  in  the  early  cases. — The  con- 
sideration of  this  general  subject  is  not  free  from  difficulties 
and  embarrassments.  The  definitions  of  void  and  voidable 
acts  are,  as  has  been  remarked,  misleading  and  imperfect. 
It  is  said  in  the  earlier  text-books  and  abridgments  that 
"void  things  are  good  to  some  purpose."^  Whatever  un- 
derstanding may  have  prevailed  in  earlier  times  as  to  the 
true  meaning  in  law  of  the  word  void,  it  is  manifest  that 
as  applied  in  our  modern  jurisprudence  this  definition  is 
incorrect,  for,  as  we  shall  presently  see,  void  acts  are  not 
"good  to  some  purpose."^  No  deed  can  be  pronounced 
in  a  legal  sense  utterly  void  which  is  valid  as  to  some  per- 
sons, but  may  be  avoided  at  the  election  of  otiiers.^ 

§  413.  Doctrine  of  degrees  of  void  acts. — Again,  it  is  laid 
down  in  the  ancient  books  that  a  thing  may  be  void  in 
several  degrees.  First,  void  so  as  if  never  done  to  all piir- 
poses  so  as  all  persons  may  take  advantage  thereof  ;  second, 
void  to  some  purposes  only  ;  third,  so  void  by  operation 
of  law  that  he  that  will  have  the  benefit  of  it  may  make  it 
good.'*  It  can  scarcely  be  said  with  strict  accuracy  that 
different  degrees  of  void  acts  are  recognized  in  modern 
jurisprudence.  "Void  things  are  no  things";  a  nullitv 
cannot  be  subdivided  ;  nothing  can  be  founded  upon  wiiat 
is  absolutely  void.^  Clearly  the  third  degree  above  in- 
stanced does  not  define  a  nullity  or  void  act  ;  such  an  act, 
as  will  presently  appear,  is  incapable  of  ratification  or  of 
being  made  good.  No  waiver  or  acceptance  can  give  it 
vitality.  Ratification  would  be  itself  as  ineffectual  and  in- 
valid as  the  void  act.*^     A  void  act,  as  we  shall  show,  ac- 


interposed  for  or  against  a  corporation,  ^Spencer,    C.    J.,    in    .Anderson    v. 

wlien  it  will  not  advance  justice,  but  Roberts,  18  Johns.  (N.  Y.)  528. 

will  accomplish  a  legal  wrong."  ^  Keite    v.    Clopton.   Carter    19;    22 

'  Finch's  Law,  8vo,  62;  22  Viner's  Viner's  Abridgment,  f3. 

Abridgment,  12.  ''  Bromley  v.  Goodiicii,  40  Wis.  140. 

■^  See  Dewing  v.Perdicaries,  96  U.  S.  "^United    States   v.    tirassniayer.    9 

196.     See  §  425.  Wall.  75;    Marsh  v.  Fulton  County,  10 


570 


OTHER    INACCURACIES. 


§  414 


complishes  and  effects  no  results  ;  establishes  and  secures 
no  rights  ;  is  ineffectual  for  all  purposes  ;  and  may  be  ab- 
solutely disregarded  by  every  one.^ 

§  414.  Other  inaccuracies. — Again,  it  is  said  that  a  thing 
is  void  which  was  done  against  law  at  the  very  time  of  the 
doing  it,  and  no  person  is  bound  by  such  act  ;  but  a  thing 
is  only  voidable  which  is  done  by  a  person  who  ought  not 
to  have  done  it,  but  who,  nevertheless,  cannot  avoid  it 
himself  after  it  is  done,  although  it  may  by  some  act  in 
law  be  made  void  by  his  heir,  etc.^  As  defining  a  void 
act,  this  statement  is  manifestly  meagre  and  imperfect, 
while  as  embodying  the  elements  of  a  voidable  act,  it  is 
positively  wrong.  The  remark  that  a  person  who  does  a 
voidable  thing  "cannot  avoid  it  himself"  is  not  true.^  The 
case  of  infancy,  not  to  instance  other  examples,  is  clearly 


Wall.  684.  See  McCracken  v.  City  of 
San  Francisco,  16  Cal.624;  Dewing  v. 
Perdicaries,  96  U.  S.  196.  In  Veeder 
V.  Mudgett,  95  N.  Y.  310,  Finch,  J., 
observed  that  "  An  act  absolutely  and 
wholly  void,  because,  under  the  law, 
incapable  of  being  performed,  cannot 
be  made  valid  by  estoppel.  This  is 
true  where  under  the  law  there  is  an 
entire  lack  of  power  to  do  the  act 
which  is  brought  in  question.  The 
distinction  is  well  illustrated  in  Scovill 
v.  Thayer,  105  U.  S.  143.  Under  the 
law  of  Kansas  no  company  like  that 
then  before  the  court  could  increase 
its  capital  to  more  than  double  an 
amount  originally  authorized.  The 
capital  was  sought  to  be  increased  in 
excess  of  that  amount.  As  against 
creditors  it  was  claimed  to  be  a  valid 
increase  by  the  operation  of  an  estop- 
pel, but  the  court  ruled  otherwise,  and 
justly  ;  for  the  very  foundation  of  an 
estoppel,  the  misleading  of  creditors  to 
their  injury,  was  wanting.  The  latter 
knew  and  were  bound  to  know  that  no 
power  existed  to  so  increase  the  capital, 


and  therefore  that  it  was  not  increased  ; 
and  hence  they  were  not,  and  could 
not  be  misled.  But  where,  as  in  the 
present  case,  the  abstract  power  did 
exist,  and  there  was  a  way  in  which 
the  increase  could  lawfully  be  made, 
and  the  creditors  could,  without  fault, 
believe  that  the  increase  had  been  law- 
fully effected  and  the  necessary  steps 
had  been  taken,  there  the  doctrine  of 
estoppel  may  apply,  and  the  increased 
stock  be  deemed  valid  as  against  the 
creditors  who  have  acted  upon  the 
faith  of  such  increase." 

'  See  §§  419,  489. 

-  2  Lilly's  Abr.  807  ;  10  Bacon's 
Abr.  374. 

^  "  The  term  void  will  be  used  to 
express  that  which  is  in  its  very  crea- 
tion wholly  without  effect,  an  absolute 
nullity,  and  voidable  where  the  instru- 
ment or  act  in  its  creation  has  an  effect 
to  transfer  something,  but  which  may 
be  defeated  by  the  person  making  it,  by 
showing  an  inherent  vice  or  defect  in 
the  transaction."  Chief-Justice  Parker 
in  Somes  v.  Brewer,  2  Pick,  (Mass.)  191. 


§4^5  NULLITIES    DEFINED.  5;i 

in  point  against  the  accuracy  of  this  definition.  It  is 
universally  conceded,  as  we  shall  presently  see,  that  an 
infant,  upon  attaining  his  majority,  may  disaffirm  and 
avoid  a  voidable  act  or  contract  done  or  entered  into  by 
him  in  his  infancy,  and  that  the  great  majority  of  his 
acts  are  voidable.^  True  this  definition  is  quoted  without 
criticism,  and  in  the  leading  case  of  Anderson  v.  Roberts  - 
is  even  apparently  regarded  as  embodying  the  true  distinc- 
tion between  void  and  voidable  acts  by  so  learned  a  jurist 
as  Chief-Justice  Spencer,  but  the  whole  tenor  of  the  opin- 
ion in  that  case  clearly  shows  that  the  learned  judge  could 
not  have  regarded  the  test  as  universally  correct,  and  tiiat 
his  apparently  unqualified  approbation  of  its  accuracy  was 
an  oversight.  These  definitions  being  inaccurate  and  mis- 
leading, an  effort  will  be  made,  in  the  progress  of  this 
limited  discussion,  to  define  a  nullity  or  void  act,  and  to 
formulate  the  rules  by  which  it  may  be  detected  and  dis- 
tinguished from  a  voidable  or  valid  act.^ 

§  415.  Nullities  or  void  acts  defined. — It  is  very  difficult 
to  give  a  concise  and  yet  sufficiently  comprehensive  defini- 
tion of  a  nullity.  Its  character  will  be  best  understood 
after  reference  to  the  decided  instances  of  it  and  to  the  in- 
cidents which  pertain  to  it.  Perhaps,  however,  it  may  be 
defined  as  a  proceeding  that  is  taken  u'ithout  any  founda- 
tion for  it,  or  that  is  essentially  defective,  or  that  is  ex- 
pressly declared  to  be  a  nullity  by  a  statute.*  The  word 
nullity,  as  applied  to  a  suit  or  action,  has  been  defined  to 
be  "such  a  defect  as  renders  the  proceedings  in  which  it 
occurs  totally  null  and  void,  of  no  avail  or  effect  whatever, 
and  incapable  of  being  made  so."^  Though  this  dclinition 
relates  to  a  judicial  proceeding  it  may  be  regarded  as  ap- 

•  See  §§  450-459.  Salter  v.  Hilgen,  40  Wis.  365  ;  Allis  v. 
'•i  18  Johns.  (N.  Y.)  528.  Billinpfs,  6  Met.  (Mass.)  417  ;  Somes  v. 
^  See  §425.  Brewer,  2  Pick.  (Mass.)  191;  Ins- 
'' Salter    v.     Hilgen,  40  Wis.  365,     keep  v.   Lecon)-,   i    N.  J.  L.  iii;   Van 

citing  Macnamara  on  NuUilies,  p.  4.         Shaackv.  Robbins,  36Io\va  201;  Ancler- 

*  Macnamara  on  Nullities,  p.  4.     See    son  v.  Roberts,  18  Johns.  (N.  Y.)  527. 


572  ILLUSTRATIONS    OF    VOID    ACTS.  §  41^ 

plicable  to  acts  and  transactions  generally.  A  void  act  is 
"SO  nugatory  and  ineffectual  that  nothing  can  cure  it." 
Hence  a  void  writ  is  incurably  defective ;  but  if  it  be 
merely  voidable,  the  defect  may  be  remedied  by  acts  of 
the  defendant  which  estop  him  from  contesting  its  valid- 
ity.-^ So  a  judgment  is  void  if  given  b)^  one  who  has  no 
colorable  right  to  act.^  In  Cable  v.  Cooper  ^  the  court  say 
that  "  it  is  a  universal  rule  in  regard  to  all  things  that  are 
void  that  they  are  as  if  they  had  never  been."  In  An- 
derson V.  Roberts*  Chief-Justice  Spencer  said  :  "  A  thing  is 
void  which  is  done  against  law  at  the  very  time  of  doing  it, 
and  where  no  person  is  bound  by  the  act."  This  is  borrowed 
from  the  definition  in  Lilly's  Abridgment  already  cited.^ 

§  416.  Illustrations  of  void  acts. — Contracts  to  do  an  il- 
legal act  or  omit  a  legal  public  duty,  contracts  in  a  form 
forbidden  by  law,  attempted  official  acts  of  persons  having 
no  recognized  title  ^e  facto  or  de  jure  to  the  office,  con- 
tracts to  do  an  impossible  thing,  or  that  leave  uncertain 
the  thing  that  is  to  be  done  ;  such  acts  or  contracts  are,  in 
legal  contemplation,  absolutely  void  because  they  have  no 
legal  sanction  and  establish  no  legitimate  bond  or  relation 
between  the  parties,  and  even  a  stranger  may  raise  the  ob- 
jection.^    In  Oliver  v.  Houdlet'''  the  court  say:  "An  act 


■'  Coleman  V.  Mansfield,  i  Miles  (Pa.)  Nicholson,  26  Beav.  58;  Flint  v.  War- 

59.  ren,  15  Sim.  626  ;  Ewen  v.  Bannerman, 

-  Hervey  v.  Edmunds,  68  N.  C.  245.  2  Dow  &  C.  74 ;  and  for  uncertainty  of 

3  15  Johns.  (N.  Y.)  155.  object,  see  Trippe  v.  Frazier,  4  Har.  & 

^  18  Johns.  (N.  Y.)  527.     See  Stevens  J.  (Md.)  446  ;  Dashiell  v.  Attorney-Gen- 

V.  Hyde,  32  Barb.  (N.  Y.)  176.  eral,  6  Har.  &  J.  (Md.)   i  ;  Goddard  v. 

*  See  §414.  Pomeroy,  36  Barb.  (N.  Y.)  546  ;  Fon- 

«  See  Pearsoll  v.  Chapin,  44  Pa.  St.  tain  v.  Ravenel,  17  How.  369;  Owens 

9;  Humphreston's  Case,  2  Leon.  218;  v.  Missionary  Society,  14  N.  Y.  380; 

Lane  v.  Cowper,  F.  Moore  103.    As  to  White  v.  Fisk,  22  Conn.  31  ;  Beekman 

charitable  bequests  void  for  uncertainty,  v.  Bonsor,  23  N.  Y.  298;  Holland  v. 

see   Bridges  v.  Pleasants,  4    Ired.  Eq.  Alcock,    108  N.  Y.    312;  Prichard  v. 

(N.  C.)  26  ;  S.  C.  44  Am.  Dec.  94,  and  Thompson,  95  N.  Y.  76  ;  Power  v.  Cas- 

note  beginning  at  page    98.      As    to  sidy,  79  N.  Y.  602 ;  Cottman  v.  Grace, 

when  the  bequests  are  void  for  uncer-  112  N.  Y.  299. 

tainty   in   amount,  see  Hartshorne   v.         '  13  Mass.  239  ;  S.  C.  7  Am.  Dec.  134. 


§4^7  RETROSPECTIVE    LEGISLATION.  573 

merely  void  may  be  treated  as  a  nullity  by  either  party  and 
even  by  a  stranger."  The  word  void  is  defined  as  being 
applicable  to  an  act  "of  no  legal  force  or  effect  whatso- 
ever ;  null  and  incapable  of  confirmation  or  ratification."^ 
"If  the  contract  is  void  the  title  does  not  pass.""  So  it 
has  been  observed  that  if  a  judgment  or  decree  be  null,  no 
action  on  the  part  of  the  plaintiff,  no  inaction  upon  the 
part  of  the  defendant,"^  no  resulting  equity  in  the  hands  of 
third  persons,  no  power  residing  in  any  legislative  or  other 
department  of  the  government,'*  can  invest  it  with  any  of 
the  elements  of  power  or  of  vitality.  Hence,  where  there 
is  a  total  absence  of  power  in  a  corporation  to  issue  bonds 
under  any  circumstances,  and  not  a  mere  failure  to  comply 
with  prescribed  requirements  and  conditions,  bonds  so 
issued  are  absolutely  void,  and  the  payment  of  installments 
of  interest  thereon,  or  the  exercise  of  acts  of  ownership 
over  property  received  as  the  proceeds  of  the  bonds,  will 
not  make  a  case  for  the  application  of  any  doctrine  of  es- 
toppel or  ratification  ;  the  payments  and  acts  of  ownership 
are  equally  unauthorized  and  void.  A  void  act  cannot  be 
ratified.^  A  void  act  never  is  and  never  can  be  binding: 
either  on  the  party  with  whom  it  originates  or  on  others.' 

§  417.  Retrospective  legislation  affecting  remedies. — Right 
here  a  clear-cut  distinction  plainly  shadowed  fortii  in  the 
authorities  may  be  considered.  A  suit  is  instituted  and 
process  served  in  a  court  which  is  without  jurisdiction  at 
the  time  of  such  issuance,  but  upon  which  jurisdiction  is 
subsequently    conferred    by   statute.       Remedial    statutes, 


'Van  Shaack  v.  Robbins,  36  Iowa  cial  Sales.  §  56 ;  Griffin  v.  Cunningham, 

203;  Webster's  Diet. ;  Dewing  v.  Per-  20  Gratt.  (Va.)  109;  Lane  v.  Nelson, 

dicaries.  96  U.  S.  195.  79  P^i-  St.  407. 

'  Holmes'  Common  Law.  p.  332.  '  See  Parkersburg  v.  Brown.  106  U. 

^SeeKramer  V.  Holster,  55  Miss.243.  S.  4S7  ;  Loan  Association  v.  Topeka, 

■■  See  Pryor  v.  Downey.  50  Cal.  388  ;  20  Wall.  667  ;  Veccler  v.  Mudgett.  95 

S.  C.  19  Am.  R.  656;  Maxwell  v.  Goet-  N.  Y.  310;  Scovill  v.  Thayer,   105  U. 

schius,  40  N.  J.   Law   383  ;   S.  C.  29  S.  143. 
Am.  R.  242 ;  Freeman  on  Void  Judi-        '  Henry  v.  Root,  33  N.  Y.  537. 


574  TO    AVOID    NULLITIES.  §  418 

especially  acts  of  Congress,^  may  have  a  retroactive  effect, 
and  confer  jurisdiction  over  a  pending-  action.^  Even 
though  the  court  lacked  jurisdiction  at  the  outset,  the  pro- 
ceeding is  not  regarded  as  void  in  the  sense  of  being  wholly 
incapable  of  confirmation  or  ratification.  The  issuance  of 
the  writ  is  not  void,  nor  the  filing  of  the  declaration,  nor 
the  service  of  the  process ;  they  possess  at  least  sufficient 
vitality  to  present  the  question  of  jurisdiction  itself,  and  to 
support  a  valid  finding  in  favor  of  the  defendant  that  the 
court  is  without  jurisdiction.  When  the  case  comes  up 
for  trial  the  inquiry  will  be  limited  to  the  question  of  the 
present  authority  to  try  the  controversy.^  The  doctrine  of 
the  retrospective  effect  of  remedial  legislation  is  illustrated 
in  the  case  of  repealing  acts  which  operate  to  take  away 
jurisdiction  from  pending  suits;*  and  acts  of  Congress 
transferring  suits  to  State  and  Federal  courts  respectively 
when  a  new^  State  is  admitted  are  valid.^ 

§  418.  Adjudications  to  avoid  nullities. — The  word  void,  as 
we  shall  presently  see,  can  scarcely  be  applied  with  pro- 
priety to  acts  which  outwardly  appear  to  be  sound,  and 
which,  while  unimpeached,  can  enforce  respect,  and  confer 
and  establish  rights,  and  the  infirmity  of  which  cannot  be 
made  manifest.  A  void  act  "  is  a  caput  77iortuum.  and 
nothing  can  2:ive  it  vitalitv."  ^     Hence  a  writ  which  is  a 


'  There  are  no  constitutional  restric-  Legal   Maxims,    35.      See   Wright   v. 

tions  upon  Congress  in  the  matter  of  Hale,  6    H.  &    N.  227 ;    Kimbray   v. 

retrospective   legislation.     See   Larkin  Draper,  L.  R.  3  Q.  B.  160;  Larkin  v. 

V.  Saffarans,  15  Fed.  Rep.  149;  Satter-  Saffarans,  15  Fed.  Rep.  150. 

lee  V.  Matthewson,  2  Pet.  380 ;  Sink-  ^  Larkin  v.  Saffarans,  1 5   Fed.  Rep. 

ing  Fund  Cases,  99  U.  S.  700.  152  ;  Sampeyreac  v.  United  States,  7 

-'See  Sampeyreac  v.  United  States,  Pet.  222;  s.  C.  Hempst.  118. 

7  Pet.  222;  s.  C.  Hempst.  118;  Town-  ^Larkin  v.  Saffarans,  15  Fed.  Rep. 

send  V.  Townsend,  Peck  (Tenn.)  1,17;  153. 

Fisher  v.  Dabbs,  6  Yerg.  (Tenn.)  118.  ^  See  Railroad   Co.  v.  Grant,  98  U. 

"  Where  the  enactment  deals  with  pro-  S.  398 ;  South  Carolina  v.  Gaillard,  loi 

cedure  only,  unless  the  contrary  is  ex-  U.    S.   433  ;    Ex  parte    McCardle,    7 

pressed,  the  enactment  applies  to  all  Wall.  514;  Benner  v.  Porter,  9  How. 

actions,  whether  commenced  before  or  235;  McNulty  v.  Batty,  10  How.  72. 

after  the  passing  of  the  act."    Broom's  ®  Dewing  v.  Perdicaries,  96  U.  S.  196. 


§  4l8  TO    AVOID    NULLITIES.  575 

nullity  cannot  be  a  ground  of  proceedings  for  contempt  for 
disobeying  its  mandate.^  As  will  be  shown,  a  defect  in  a 
legal  proceeding  that  "  does  not  take  away  the  foundation 
or  authority  for  the  proceeding,  or  apply  to  its  whole  oper- 
ation," is  an  irregularity  as  distinguished  from  a  nullity.'* 
Again  a  transaction,  it  is  said,  is  void  when  it  is  a  mere 
nullity  and  incapable  of  confirmation  ;  whereas  a  voidable 
transaction  is  one  which  may  be  either  avoided  or  confirmed 
by  matter  arising  ex  post  facto?  The  court  remark,  in 
Pearsoll  v.  Chapin,^  that  "even  nullities  may  be  only  void- 
able in  the  sense  that  a  regular  adjudication  is  necessary  to 
declare  them  void."  This  is  clearly  not  a  correct  statement. 
While  it  may  be  true  that  a  suit  in  equity  will  lie  to  cancel 
an  instrument  which  is  void,  but  apparently  valid,  or  order 
it  to  be  delivered  up,  this  is  done  upon  the  principle  quia 
timet  as  it  is  called,  that  is,  through  fear  that  such  instru- 
ment may  be  vexatiously  or  injuriously  used  when  the 
evidence  upon  which  its  nullity  is  predicated  is  lost  or 
diminished,  or  through  fear  that  it  may  throw  a  cloud  or 
suspicion  over  the  plaintiff's  title  and  interest.''  That  a 
formal  adjudication  is  necessary,  however,  to  avoid  a  nul- 
lity, is  certainly  incorrect.  Even  the  relief  just  instanced 
will  not  be  extended  where  the  invalidity  or  illegality  of 
the  instrument  appears  on  its  face  and  admits  of  no  doubt. *^ 


'  State  V.  Civil  District  Court,  13  Re-  v.  B.,  32  Beav.  574  ;  Pettit  v.  Shepherd, 

porter  780.  5  Paige  (N.  Y.)  493 ;  Fish  v.  French, 

■'Chambers    v.    Coleman,    9    Dowl.  15  Gray  (Mass.)  520;  Onions  v.  Cohen. 

588-595.  2  Hem.  &  M.  354.     See  §512. 

=  I    Steph.    Com.    474,   475.     "The  '  See  Stuart  v.  Palmer,  74  N.  Y.  183  ; 

line  of  distinction  has  not  been  accu-  Guest  v.   City  of  Brooklyn,  69  N.  V. 

rately  drawn  as  to  all  the  cases  where  506  ;  Nichols  v.  Voorhis,  18  Hun  (N.  V.) 

the  process  is   merely  erroneous,  and  33. 

those  where  it  is  an  absolute  nullity,  Clouds  on  Title— \n  Townscnd  v. 
and  perhaps  each  case  must  depend  in  The  Mayor,  77  N.  Y.  545,  Earl,  J.,  de- 
some  measure  on  its  own  circum-  livering  the  opinion  of  the  New  York 
stances."  Day  v.  Sharp,  4  Whart.  (Pa.)  Court  of  Appeals,  said  :  "  The  action  is 
342.  to  set  aside  and  cancel  the  tax,  upon 

^  44  Pa.  St.  13.  the  ground  that  it  is  illegal  and  a  cloud 

^  Cooper  V.  Joel,  27  Beav.  313;  W.  upon  plaintiff's  title  to  his  lands.     It  is 


5/6 


TO    AVOID    NULLITIES. 


§418 


Thus  when  a  writ  is  void  it  can  derive  no  vitality  from  the 
defendant's  inaction.  He  cannot  be  compelled  to  move  to 
vacate  it,  but  on  the  contrary  may  disregard  it  altogether, 
and  may  at  any  time  successfully  resist  any  claims  based 
upon  it.  As,  however,  the  process  may  be  employed  to 
cloud  his  title  or  subject  him  to  various  annoyances,  the 
more  prudent  course  is  to  move  to  have  it  quashed.  That 
courts  will  vacate  void  process,  and  also  process  based  upon 


claimed  to  be  illegal  solely  upon  the 
ground  that  the  law  in  pursuance  of 
which  it  was  imposed  is  unconstitu- 
tional and  therefore  void It  is  a 

general  rule  that  the  owner  of  real 
estate  must  wait  until  his  title  is  as- 
sailed, or  his  possession  is  disturbed,  or 
his  rights  are  actually  interfered  with, 
before  he  can  invoke  the  protection  of 
the  courts.  The  law  generally  con- 
cerns itself  only  with  actual  wrongs, 
and  not  with  such  as  are  merely  po- 
tential. But  there  are  some  exceptions 
to  this  rule.  Courts  will,  under  certain 
circumstances,  entertain  actions  to  re- 
move a  cloud  upon  title  to  land  to  pre- 
vent future  harm.  It  is  not  sufficient 
that  there  is  a  formal  title  or  lien  cre- 
ating the  cloud.  Where  the  cloud  is 
claimed  to  be  created  by  a  lien,  the 
lien  must  be  apparently  valid,  and 
must  exist  under  such  circumstances 
that  it  may  in  the  future  embarrass  or 
injure  the  owner  or  endanger  his  title. 
But  it  has  been  decided  many  times  in 
this  State  that  where  the  lien  is  invalid 
upon  its  face,  or  where  the  invalidity 
will  necessarily  appear  in  any  proceed- 
ing taken  to  enforce  title  under  it,  then 
the  jurisdiction  of  a  court  of  equity 
cannot  be  invoked  to  set  it  aside.  Then 
the  owner  must  wait  until  his  title  is 
actually  assailed  under  the  lien,  and  his 
defense  will  always  be  at  hand.  [Scott 
V.  Onderdonk,  14  N.  Y.  9;  Heywood 
v.  City  of  Buffalo,  14  N.  Y.  534;  Ward 
V.  Dewey,  16  N.  Y.  519  ;  Hatch  v.  City 


of  Buffalo,  38  N.  Y.  276;  Newell  v. 
Wheeler,  48  N.  Y.  486 ;  Marsh  v.  City 
of  Brooklyn,  59  N.  Y.  280.]  ....  No 
valid  tax  can  be  imposed  under  an  un- 
constitutional law,  and  such  a  tax  could 
not  constitute  such  a  cloud  upon  title 
as  to  call  for  the  interference  of  a  court 
of  equity.  [Stuart  v.  Palmer,  74  N.  Y. 
183.]  "  Mr.  Justice  Field,  in  Pixley  v. 
Huggins,  15  Cal.  127,  133,  lays  down 
the  following  test  to  determine  whether 
a  cloud  exists  upon  a  title :  "  Would 
the  owner  of  the  property,  in  an  action 
of  ejectment,  brought  by  the  adverse 
party,  founded  upon  the  deed,  be  re- 
quired to  offer  evidence  to  defeat  a  re- 
covery ?  If  such  proof  would  be  neces- 
sary the  cloud  would  exist ;  if  the  proof 
would  be  unnecessary  no  shade  would 
be  cast  by  the  presence  of  the  deed. 
If  the  action  would  fall  of  its  own 
weight,  without  proof  in  rebuttal,  no 
occasion  could  arise  for  the  equitable 
interposition  of  the  court ;  as  in  the 
case  of  a  deed  void  upon  its  face,  or 
which  was  the  result  of  proceedings 
void  upon  their  face,  requiring  no  ex- 
trinsic evidence  to  disclose  their  ille- 
gality." See  also  "Clouds  upon  Title," 
Cent.  L.  J.  261.  In  no  case  can  that 
be  called  a  cloud  which  upon  its  face  is 
void.  New  York  &  N.  H.  R.R.  Co.  v. 
Schuyler,  17  N.  Y.  592,  599.  But  when 
such  claim  appears  to  be  valid  upon  the 
face  of  the  record  and  the  defect  can 
only  be  made  to  appear  by  extrinsic 
evidence,  particularly  if  that  evidence 


§  419  NO  DEGREES  OF  NULLITIES.  577 

void  judgments,  and  thereby  relieve  the  defendant  from 
annoyance,  there  can  be  no  doubt.^ 

§  419.  No  degrees  of  nullities. — The  apparently  irresistible 
inclination  to  subdivide  and  classify  nullities  is  further 
illustrated  in  the  case  of  Means  v.  Robinson,^  in  which 
absolute  nullities  are  declared  to  be  of  two  kinds  :  "  Those 
resulting  from  stipulations  derogating  from  the  force  of 
laws  made  for  the  preservation  of  public  order  or  good 
morals,  and  those  established  for  the  interest  of  individ- 
uals."^ The  former  it  is  said  are  not  susceptible  of  ratifi- 
cation ;  but  if  by  subsequent  dispositions  of  law,  or  by  suc- 
cession of  time,  such  stipulations  cease  to  be  illegal,  they 
may  from  that  time  be  ratified.  It  may  be  here  observed 
that  the  use  of  the  word  absolute  in  this  connection  is 
practically  meaningless  ;  it  is  a  mere  epithet.  A  nullity 
being  some  act  or  transaction  which  is  totally  void,  and  ac- 
complishes no  result,  and  is  incapable  of  being  made  elTect- 
ual  or  available  by  ratification  or  laches  in  any  manner,  an 
absohttc  nullity  will  not  be  of  any  greater  or  different  eflfect. 
Nullities  differing  in  degree,  as  has  been  said,  cannot  in  the 
nature  of  things  exist.^  The  statement  that  an  absolute 
nullity  may  be  ratified  by  "  succession  of  time,"  or  by  laches,, 
cannot  certainly  be  accepted  ;  it  is  subversive  of  every  defi- 
nition of  a  void  act.  That  a  nullity  may  be  ratified  after 
the  condition  which  rendered  it  void  is  removed,  by  legis- 
lation or  otherwise,  may  well  be  seriously  questioned.  It 
would  be  giving  an  entirely  new  and  different  effect  lo  an 
act  already  performed  with  reference  to  the  then  existing 

depends  upon  oral  testimony  to  estab-  sale  upon  a  paid  judgment,  is  a  familiar 

lish  it,  this  presents  a  case  for  invoking  illustration  of  a  case  of  the  latter  kind, 

the  aid  of  a  court  of  equity  to  remove  Ward  v,  Dewey,  16  N.  Y.  522. 

it  as  a  cloud  upon  the  title.     The  case  '  See  Mabry  v.  State,  9  Yerg.  (Tenn.) 

of  fraud  in  procuring  a  deed  to  be  exe-  207. 

cuted   which   apparently   conveys   the  '7  Tex.  516. 

tide,  or  the  case  of  the  sale  of  land  by  ^  See  Cl.iy  v.  Clay's  Heirs.  35  Texas 

a  sheriff  and  the  execution  of  a  deed  to  530. 

the  purchaser  after  redemption,  or  a  'See  §413. 
37 


578  VOID  AND  VOIDABLE  ACTS.  §  42O 

laws,  and  would  be  changing  the  rights  and  liabilities  of 
the  parties  without  their  consent.  Nor,  as  we  shall  see, 
can  the  doctrine  be  accepted  that  "  the  ratification  of  a  void 
contract  makes  it  a  valid  contract."^ 

§  420.  Void  and  voidable  acts  distinguished. — It  is  said  in 
The  State  v.  Richmond,^  that  there  is  "great  looseness  and 
no  little  confusion  in  the  use  of  the  terms  void  and  voida- 
ble, growing,  perhaps  in  some  degree,  out  of  the  imperfec- 
tion of  our  language."  ^  The  terms  void  and  voidable  as 
used  in  the  books,  have  been  said  to  stand  for  absolutely 
and  relatively  void.  That  is  regarded  as  absolutely  void 
which  the  law  or  the  nature  of  things  forbids  to  be  en- 
forced at  all,  and  that  is  considered  relatively  void  which 
the  law  condemns  as  a  wrong  to  individuals  and  refuses  to 
enforce  as  against  them.^  "A  contract  is  void  when  it  is 
a  nullity  obligatory  on  neither  party  and  insusceptible  of 
ratification  ;  when  either  party  is  bound,  or  it  may  be  con- 
firmed, it  is  only  voidable."  ^  Another  method  of  stating 
the  distinction  is  given  in  the  case  of  Fletcher  v.  Stone, ^ 
where  it  is  said  that  acts  which  are  mala  in  se  are  generally 
absolutely  void,  and  that  no  right  or  claim  can  be  derived 
from  any  such  acts.  But  acts  which  are  only  mala  prohi- 
bita  are  either  void  or  voidable  according  to  the  nature  and 
effects  of  the  act  prohibited.  If  it  concerns  the  public 
good,  it  is  generally  to  be  considered  void  ;  but  if  it  is  pro- 
hibited for  the  purpose  of  securing  the  private  rights  of  the 
parties  interested,  it  is  only  voidable.  This  case  embodies 
a  general,  but  nevertheless  a  forcible  and  highly  important 
exposition  of  the  distinction  between  these  acts.  We  may 
observe  that  the  distinction  sought  to  be  drawn  can  scarcely 
be  intelligently  embodied  in  a  general  rule  which  will  ena- 

'  See  Clay  v.  Clay's  Heirs,  35  Texas  '  Breckenridge's  Heirs  v.  Ormsby,  i 

509-530.  J.  J.  Mar.  (Ky.)  240  ;  s.  C.  19  Am.  Dec. 

•'  26  N.  H.  237.  74- 

3  See  §  409,  n.  °  3  Pick.  (Mass.)  250-253. 
^  See  PearsoU  v.  Chapin,  44  Pa.  St.  1 5 . 


§  42  1  ABSENCE    OF    JURISDICTION.  579 

ble  the  student  to  determine  at  a  glance  which  class  of 
these  acts  embrace  a  particular  transaction.  Human  laws 
are  too  imperfect  and  business  transactions  too  intricate  to 
admit  of  such  a  scientifically  accurate  result.  Resort  must 
be  had  to  instances  and  illustrations,  many  of  which  will  be 
furnished  to  supplement  the  rule.  The  distinction  between 
void  and  voidable  judgments,  which  is  discussed  by  the 
Supreme  Court  of  Missouri  in  Gray  v.  Bowles,^  may  shed 
some  light  on  the  subject.  Clark,  J.,  said:  "The  distinc- 
tion is  between  a  lack  of  power  or  want  of  jurisdiction  in 
the  court  and  a  wrongful  or  defective  execution  of  the 
power.  In  the  first  instance  all  acts  of  a  court  not  having 
jurisdiction  or  power  are  void,  in  the  latter  only  voidable. 
A  court  may  then  act  first  without  power  or  jurisdiction  ; 
second,  having  power  or  jurisdiction  may  exercise  it  wrong- 
fully ;  or,  thirdly,  irregularly.  In  the  first  instance  the  act 
or  judgment  is  void,  and  is  as  though  it  had  not  been  done. 
The  second  is  wrong  and  must  be  reversed  upon  error. 
The  third  is  irregular  and  must  be  corrected  on  error." 

§  421.  Absence  of  jurisdiction  as  distinguished  from  ex- 
cess of  jurisdiction. — In  Bradley  v.  Fisher,-  Mr.  Justice 
Field,  in  delivering  the  opinion  of  the  United  States  Su- 
preme Court,  said  :  "A  distinction  must  be  here  observed 
between  excess  of  jurisdiction  and  the  clear  absence  of  all 
jurisdiction  over  the  subject-matter.  Where  there  is  clearly 
no  jurisdiction  over  the  subject-matter,  any  authority  ex- 
ercised is  a  usurped  authority,  and  for  the  exercise  of  such 
authority,  when  the  want  of  jurisdiction  is  known  t(T  the 
judge,  no  excuse  is  permissible.  But  where  jurisdiction 
over  the  subject-matter  is  invested  by  law  in  the  judge,  or 
in  the  court  which  he  holds,  the  manner  and  extent  in 
which  the  jurisdiction  shall  be  exercised  are  generally  as 
much  questions  for  his  determination  as  any  otiicr  qucs- 


'  74  Mo.  419  ;  s.  C.  13  Reporter  179.     Bangs,  31  Fed.  Rep.  642  ;  ///  rt  Eaves, 
-  13  Wall.  351,  352.     See  Cooke  v.     30  Fed.  Rep.  24, 


580  EXERCISE    OF    JURISDICTION.  §  422 

tions  involved  in  the  case,  although  upon  the  correctness 
of  his  determination  in  these  particulars  the  validity  of  his 
judgments  may  depend.  Thus,  if  a  probate  court,  invested 
only  with  authority  over  wills,  and  the  settlement  of  estates 
of  deceased  persons,  should  proceed  to  try  parties  for  pub- 
lic offenses,  jurisdiction  over  the  subject  of  offenses  being 
entirely  wanting  in  the  court,  and  this  being  necessarily 
known  to  its  judge,  his  commission  would  afford  no  pro- 
tection to  him  in  the  exercise  of  the  usurped  authority. 
But  if  on  the  other  hand  a  judge  of  a  criminal  court,  in- 
vested with  general  criminal  jurisdiction  over  offenses  com- 
mitted within  a  certain  district,  should  hold  a  particular  act 
to  be  a  public  offense,  which  is  not  by  the  law  made 
an  offense,  and  proceed  to  the  arrest  and  trial  of  a  party 
charged  with  such  act,  or  should  sentence  a  party  con- 
victed to  a  greater  punishment  than  that  authorized  by  the 
law  upon  its  proper  construction,  no  personal  liability 
to  civil  action  for  such  acts  would  attach  to  the  judge, 
although  those  acts  would  be  in  excess  of  his  jurisdiction, 
or  of  the  jurisdiction  of  the  court  held  by  him,  for  these 
are  particulars  for  his  judicial  consideration,  whenever  his 
general  jurisdiction  over  the  subject-matter  is  invoked. 
Indeed,  some  of  the  most  difficult  and  embarrassing  ques- 
tions which  a  judicial  officer  is  called  upon  to  consider  and 
determine  relate  to  his  jurisdiction,  or  that  of  the  court 
held  by  him,  or  the  manner  in  which  the  jurisdiction  shall 
be- exercised.  And  the  same  principle  of  exemption  from 
liability  which  obtains  for  errors  committed  in  the  ordinary 
prosecution  of  a  suit  where  there  is  jurisdiction  cf  both 
subject  and  person,  applies  in  cases  of  this  kind,  and  for 
the  same  reasons." 

§  422.  Jurisdiction  and  the  exercise  of  jurisdiction. — A 
plain  distinction  must  be  observed  between  jurisdiction 
and  the  exercise  of  jurisdiction.  A  court  may  have  the 
right  and  power  to  determine  the  status  of  a  thing,  and 


§42  2  EXERCISE    OF   JURISDICTION.  58 1 

yet  may  exercise  its  authority  erroneously.  After  jurisdic- 
tion attaches  in  any  given  case,  all  that  follows  is  exercise 
of  jurisdiction.  The  right  to  inquire  into  the  jurisdiction 
by  another  court  in  a  collateral  action  is  confined  to  the 
question  of  authority,  and  it  does  not  extend  to  the  ques- 
tion whether  or  not  the  court  erred  in  the  exercise  of  law- 
ful authority  to  act.  It  is  only  a  void  judgment  that  may 
be  attacked  collaterally  ;^  where  it  is  only  voidable — where 
the  proper  court  has  decided  improperly — the  remedy  is 
by  resort  to  a  higher  court ;  and  when  the  highest  is 
reached  the  law  gives  no  further  remedy.  By  "  proper 
court"  is  meant  not  merely  a  duly  constituted  tribunal,  but 
one  having  authority  over  the  subject-matter  in  the  partic- 
ular case  in  question.  When  the  judgment  is  coram  judice, 
neither  error  of  fact  nor  of  law  in  the  exercise  of  jurisdic- 
tion will  render  it  a  nullity.  It  must  stand  until  reversed 
by  the  appellate  court.^  "The  cases  are  numerous,"  said 
Chief-Justice  Marshall,  "which  decide  that  the  judgments 
of  a  court  of  record  having  general  jurisdiction  of  the  sub- 
ject, although  erroneous,  are  binding  until  reversed."'  In 
the  case  of  Tyler  v.  Defrees,*  the  Supreme  Court  of  the 
United  States  said  :  "These  proceedings  do  not  come  be- 
fore us  on  a  writ  of  error  to  correct  any  irregularities  or 
mere  errors  of  lavv^  in  the  court  which  rendered  the  judg- 
ment, but  they  come  before  us  collaterally  as  the  founda- 

'  Hobart   v.  Frost,  5  Duer  (N.  Y.)  Grignon  v.  Astor,  2  How.  341  ;  Griffin 

674 ;  Butler  v.  Potter,  17  Johns.  (N.  Y.)  v.  Mitchell,  2  Cow.  (N.  V.)  549 ;  Rhode 

145;    Easton   v.    Calendar,   11   Wend.  Island  v.  Massachusetts,  12  Peters  657. 

(N.  Y.)  90;  Mygatt  v.  Washburn,   15  'Walker  v.  Sleight.  30    Iowa  325; 

N.  Y.  316;  Bailey  v.  Buell,  59  Barb.  Milne  v.  Van  Buskirk,  9    Iowa  558; 

(N.  Y.)  158;  People  v.  Supervisors,  11  Martin  v.  Barron,  37  Mo.  301  :  Chase 

N.  Y.   563;    Freeman   v.   Kenney,   15  v.  Christianson,  41   Cal.  253  ;    Bond  v. 

Pick.  (Mass.)  44;  Lyman  v.  Fiske,  17  Pacheco,  30   Cal.   530;    Alexander   v. 

Pick.  (Mass.)  231  ;  Hannibal  &  St.  Jo.  Nelson.  42  Ala.  462;  Davis  v.  Hclbig, 

R.R.  Co.v.Shacklett,  30M0.5S0;  State  27  Md.  452;  Covington  v.  Ingram,  64 

V.    Shacklett,    37    Mo.    280;    Kempe's  N.  C.  123 ;  Dequindre  v.  Williams,  31 

Lessee   v.    Kennedy,    5    Cranch    173;  Ind.  444. 

Knowies  v.  Muscatine,  20  Iowa  249;  '  Kx  parti-  Watkins,  3  Pel.  207. 

United  States  v.Arredondo, 6  Pet. 691  ;  Mi  Wall.  331-344- 


582  DISTINCTIONS    IN    JURISDICTION.  §  423 

tion  of  the  defendant's  title.  According  to  the  well-settled 
doctrine  in  such  cases  no  error  can  be  regarded  here,  or 
could  have  been  considered  in  the  court  below  on  the  trial, 
that  does  not  go  to  the  extent  of  showing  a  want  of  juris- 
diction in  the  court  which  rendered  the  judgment  con- 
demning the  property."^ 

§  423.  Distinctions  in  jurisdiction  considered. — In  a  case 
which  arose  in  Alabama  the  court  observed  that  the  true 
distinction  between  void  and  voidable  acts,  orders,  and 
judgments  was,  that  the  former  could  always  be  assailed  in 
any  proceeding,  while  the  latter  can  only  be  attacked  in  a 
direct  proceeding  instituted  for  that  purpose.^  And  in 
Dixon  V.  Watkins^  it  was  said  to  be  well  settled  that 
where  a  party  was  sued  for  an  act  done  under  color  of 
process,  if  the  process  be  void,  the  action  should  be  tres- 
pass vi  et  armis  ;  if  voidable,  trespass  on  the  case.  Where, 
however,  the  process  is  not  totally  defective  and  irregular, 
but  merely  erroneous  and  liable  to  be  reversed  on  error, 
it  is  not  void  but  voidable,  and  does  not  render  the  party 
issuing  it  a  trespasser.''  We  may  observe  here,  as  further 
illustrating  the  distinction,  that  whenever  a  contract  or 
obligation  is  void  ab  ijiitio  the  general  plea  of  non  est 
factum  is  proper.  Where  it  is  merely  voidable,  a  special 
plea  is  necessary  setting  forth  the  particular  circumstances 
avoiding  it.^  This  is  upon  the  theory  that  the  grantee  or 
donee  has  acquired  every  appearance  of  ownership,  and 
will  not  be  deprived  of  the  thing  granted,  unless  the  de- 


'  See  Cooper  v.  Reynolds,  10  Wall,  the  judgment  of  a  competent  tribunal 

208.  cannot  be  treated  as  a  nullity."     Buell 

«  Alexander  v.  Nelson,  42  Ala.  462.  v.  Cross,  4  Ohio  329. 

See  Eaton  v.  Badger,  33  N.  H.  228 ;  '9  Ark.  139.     See  Bach  v.  Cook.  21 

Ponce   V.    Underwood,    55    Ga.    601;  Ark.  571. 

Anderson  v.    Roberts,    18  Johns.  (N.  •*  Day  v.  Sharp,  4  Whart.  (Pa.)  341. 

Y.)  527  ;   Stevens  v.  Hauser,  39  N.  Y.  '  Anthony  v.Wilson,  14  Pick.  (Mass.) 

302;   BuUer's   N.    P.    172;    Somes   v.  303;   Bottomley  v.    United    States,    i 

Brewer,  2  Pick.  (Mass.)  196.     "  How-  Story  145. 
ever  summary,  or  however  irregxilar, 


§  4-3  DISTINCTIONS    IN    JURISDICTION.  583 

feet  in  his  title  is  clearly  shown  and  proved  to  the  court.' 
So  it  is  said  that  an  infant  cannot  plead  non  est  factum 
and  give  infancy  in  evidence  ;  the  incapacity  must  be  set 
forth  by  special  plea,  and  the  same  principle  is  applicable 
to  a  deed  which  has  been  obtained  by  duress.'^  In  Somes 
V.  Brewer,^  a  leading  and  highly  important  case  to  which 
we  shall  make  frequent  reference,  Chief-Justice  Parker,  in 
the  course  of  a  lucid  and  exhaustive  opinion,  said :  "  I  do 
not  perceive  that,  in  any  instance,  a  deed  of  a  party  com- 
petent to  contract  has  been  deemed  void  or  a  nullity,  on 
account  of  its  being  obtained  from  him  by  the  fraud  or 
imposition  of  the  grantee.  On  the  contrary  it  seems  to 
me  that  it  may  be  inferred  from  all  of  them  that  such  a 
deed  passes  the  estate,  and  is  only  voidable  by  showing, 
under  a  special  plea,  the  circumstances  which  go  to  defeat 
it.  These  circumstances  cannot  be  given  in  evidence  on 
the  plea  of  71071  est  factum.  And  it  seems  to  be  usual  in 
England  to  apply  to  the  court  of  chancery  for  relief,  which 
is  given  by  setting  aside  the  deed  and  ordering  a  recon- 
veyance, which,  however,  may  not  be  necessary  where  the 
deed  is  set  aside  ;  for  the  decree  of  the  court  makes  it  a 
nullity,  although  it  had  effect  as  a  deed  before." 

The  innovations  in  modern  procedure,  however,  seem 
likely  to  impinge  upon  these  clear-cut  distinctions.  Thus, 
in  Van  Deusen  v.  Sweet,"*  a  lunatic's  deed  was  held  to  be 
absolutely  void,  and  a  direct  action  to  recover  possession 
of  the  land,  utterly  ignoring  the  deed,  was  very  correctly 
adjudged  to  be  proper.  No  proceedings  in  equity  to  annul 
the  void  instrument  were  considered  essential.  But  the 
court  {obiter)  went  further  and  plainly  intimated  that  it 
would  have  been  competent  for  the  plaintiff  in  this  action 
in  the  nature  of  ejectment  to  have  shown  that  the  deed 


'  See    Somes    v.    Brewer,   2   Pick.  '  2  Pick.  (Mass.)  195. 

(Mass.)  197.  •'51  N.  Y.  384. 

'  Somes  V.   Brewer,  2  Pick.  (Mass.) 
197  ;  BuUer's  N.  P.  172. 


584  ACTS  IN  AID  or  THE  REBELLION.        §  424 

was  voidable  if  such  proof  had  been  necessary  to  defeat  the 
defendant's  claim  under  this  voidable  deed  and  title.  This 
seems  like  countenancing  an  unscientific  and  rough-shod 
method  of  procedure  in  the  courts.  A  voidable  title  is  a 
title  ;  its  voidable  characteristics  should  be  determined  in 
an  appropriate  proceeding  in  which  the  facts  impairing  its 
force  and  the  election  to  avoid  it  are  disclosed  by  pleas,  and 
the  title  divested  of  the  semblance  of  regularity  and  legality 
by  a  proper  adjudication. 

§  424.  Legislation  or  acts  in  aid  of  the  rebellion. — Let  us 
glance  for  a  moment  at  another  line  of  illustration.  Many 
recent  well-considered  cases  are  to  be  found  especially  in 
the  United  States  Supreme  Court,  determining  the  effect 
of  the  legislation  of  the  late  Confederate  government,  and 
involving  the  legality  of  acts  of  individuals  and  legislative 
bodies  in  aid  and  support  of  the  war  against  the  government 
The  national  importance  and  great  prominence  of  the  cases 
giving  judicial  construction  to  such  acts  render  a  brief 
notice  of  the  results  of  the  adjudications  proper.  Con- 
tracts and  legislative  acts  in  aid  of  the  late  rebellion  are 
both  illegal  and  void  and  cannot  be  enforced  by  the  courts.^ 
To  recognize  such  acts  as  valid  would  be  derogatory  to  the 
dignity  and  authority  of  the  government  of  the  United 
States,  and  would  be  setting  too  light  an  estimate  upon  so 
great  an  offense  as  rebellion.^ 


'  Thomas  v.  City  of  Richmond,  12  9  Wall.   197;  Dewing  v.  Perdicaries, 

Wall.  357;  Texas  v.  White,  7  Wall.  96  U.  S.  193." 

700;  Hanauer  v.  Doane,  12  Wall.  342  ;  "  Thomas  v.  City  of  Richmond,  12 
Clements  v.  Yturria,  81  N.  Y.  290.  In  Wall.  357.  "  In  the  case  of  a  debt  paid, 
Daniels  v.  Tearney,  102  U.  S.  418,  Mr.  or  property  sold  and  paid  for  in  Con- 
Justice  Swayne  said :  "  That  the  ordi-  federate  money,  it  would  be  unreason- 
nance  of  secession  was  void,  is  a  prop-  able  to  call  upon  the  courts  to  rip  up 
osition  we  need  not  discuss.  The  the  transaction  and  compel  the  repay- 
affirmative  has  been  settled  by  the  ar-  ment  of  the  money."  Robinson  v.  In- 
bitrament  of  arms  and  the  repeated  ternational  L.  A.  Soc,  42  N.  Y.  66. 
adjudications  of  this  court.  Texas  v.  Compare  Thorington  v.  Smith,  8  Wall. 
White,  7  Wall.  700 ;  Hickman  v.  Jones,  i;  Planters'  Bank  v.  Union  Bank,  16 

Wall.  500;  State  v.  Bevers,  86  N.C.  594. 


§  425  RESULT    OF    THE    CASES.  585 

Confederate  treasury  notes  when  recocrnized  by  the 
parties  as  money,  and  dealt  with  in  the  ordinary  course  of 
business,  disconnected  with  any  purpose  directlv  to  be  at- 
tained by  putting  them  in  circulation,  constituted  in  them- 
selves consideration  sufficient  to  support  a  contract  either 
executed  or  executory.  The  same  principle  must  hold 
good  in  the  case  of  its  bonds,  when  treated  as  property 
and  accepted  under  similar  circumstances.^  The  test  that 
the  act  or  legislation  must  have  been  in  aid  of  the  rcl)ellion 
is  highly  important,  and  must  not  be  obscured,  l)ccause 
laws  enacted  for  the  preservation  of  public  order,  and  for 
the  regulation  of  business  transactions  between  man  and 
man,  and  not  to  aid  or  promote  the  rebellion,  though  made 
by  a  de  facto  government  not  recognized  by  the  United 
States,  are  so  far  upheld  as  to  sustain  the  transactions 
which  have  taken  place  under  them.'^ 

§  425,  Result  of  the  cases — Principles  applicable  to  a  nullity. 
— Without  needlessly  increasing  the  citation  of  cases  or 
further  quoting  definitions  in  relation  to  the  subject,  and 
before  classifying  and  discussing  the  cases  in  detail,  the  fol- 
lowing rules  are  suggested  as  in  some  measure  an  aid  in 
determining  whether  or  not  an  act,  contract,  proceeding,  or 
transaction  is  a  nullity.  First,  a  nullity  is  a  totally  void 
act  or  transaction,  ineffectual  for  all  purposes  in  its  very 
creation,  accomplishing  no  result,  conferring  or  disturbing 


'  State  V.  Bevers,  86  N.  C.  594.  prior  to  the  rebellion,  remained  during 

'Thomas  v.  City  of  Richmond,  12  its  continuance  and  afterward.     As  far 

Wall.   357;  Keith  v.  Clark,  97   U.S.  as  the  acts  of  the  States  did  not  impair, 

464.     "  Whilst  thus  holding  that  there  or  tend  to  impair,  the  supremacy  of  the 

was  no  validity  in  any  legislation  of  the  national  authority,  or  the  just  rights  of 

Confederate  States  which  this  court  can  the   citizens   under    the    Constitution, 

recognize,  it  is  proper  to  observe  that  they  are  in  general   to  he  treated  as 

the  legislation  of  the  States  stands  on  valid  and  binding."    Williams  v.  Brufify, 

very    different    grounds.      The    same  96  U.  S.  176,  192.    See  Keith  v.  Clark, 

general  form  of  government,  the  same  97  U.  S.  465;  Horn  v.  Lockhart,    17 

general  laws  for  the  administration  of  Wall.  570;  Sprott  v.  United  States,  20 

justice  and  the   protection    of  private  Wall.   459 ;    Thorington   v.   Smith,    8 

rights,  which  had  e.\isted  in  the  States  Wall.  10. 


586  VOIDABLE    ACTS    DEFINED.  §  426 

no  rights,"  and  of  no  effect  or  avail  whatever.^  Second,  it 
is  an  act  done  against,  or  without  any  warrant  of  or  foun- 
dation in  law,  and  wholly  incapable  of  ratification,  adop- 
tion, or  confirmation  ;  the  ratification  is  as  ineffectual  as 
the  void  act.^  Third,  it  is  an  act  which  the  nature  of  things 
forbids,  and  which  is  so  wholly  against  law  and  without 
authority  or  effect  that  it  may  either  be  attacked  in  a  col- 
lateral action  or  absolutely  ignored,  even  by  a  stranger,  in 
any  transaction  or  proceeding.  Life  can  never  be  infused 
into  it.^ 

§  426.  Voidable  acts  further  defined. — Voidable  acts  too 
are  not  readily  defined,  and  will  perhaps  be  more  clearly 
comprehended  and  detected  by  illustrations  and  recorded 
instances.  This  class  of  acts  occupies  the  intermediate 
ground  between  nullities  and  valid  acts,  and  their  charac- 
teristics have  been  already  partially  discussed.  Blackstone 
says  :  "  Idiots  and  persons  of  non-sane  memory,  infants  and 


'  Penal  consequences  may  of  course  S.  223  ;    Morse  v.  Presby,  25  N.  H 

be  incurred  as  where  the  act  is  not  299 ;  Eaton  v.  Badger,  33  N.  H.  228 

only  rendered  void  by  statute,  but  a  Wamsley  v.  Robinson,  28  La.  An.  793 

penalty  for  its  commission  is  imposed.  Ponce    v.    Underwood,    55    Ga.    601 

-  Reese  River  Mining  Co.  v.  Smith,  Lyles  v.  Bolles,  8  S.  C.  258 ;  Doe  v. 

L.  R.  4  H.  L.64  ;  Marsh  v.  Fulton  Co.,  Harter,  2  Ind.  252;  Buell  v.  Cross,  4 

10  Wall.  684;  United  States  v.  Gross-  Ohio  329;  Dewing  v.  Perdicaries,  96 

mayer,  9  Wall.  75;  Gray  v.  Hook,  4  U.  S.  196.     In  Voorhees  v.  Bankofthe 

N.  Y.  449;  Robinson  v.  Kalbfleisch,  5  United  States,  10  Peters  449-475,  the 

N.  Y.  S.  C.  212;  Dewing  v.  Perdic-  United   States   Supreme   Court    said: 

aries,  96  U.  S.  196.     When,  however,  "  The   line   which   separates  error  in 

"  two  men  make  a  contract  in  fraud  of  judgment  from  the  usurpation  of  power 

creditors  neither  of  them  can  ratify  it,  is  very  definite,  and  is  precisely  that 

for  that  would  be  to  forgive  their  own  which  denotes  the  cases  where  a  judg- 

sins.     And  so  when  the  contract  is  in  ment  or  decree  is  reversible  only  by  an 

substance  or  in  essential  form  illegal,  appellate  court,  or  may  be  declared  a 

neither  party  can  ratify  it,  because  the  nullity  collaterally,  when  it  is  offered  in 

wrong  done  is  against  the  State,  and  evidence  in  an  action  concerning  the 

it  only  can  forgive  it.     For  this  sort  of  matter   adjudicated,  or   purporting  to 

wrong  there  can  be  no  private  ratifica-  have  been  so.     In  the  one  case  it  is  a 

tion.      A  ratification  that   leaves   the  record   importing  absolute  verity ;   in 

vice  unpurged  and  unforgiven  is  itself  the   other,    mere  waste   paper."     See 

null."    PearsoU  v.  Chapin,  44  Pa.  St.  15.  Lessee    of    McCall   v.    Carpenter,    18 

*  See  Gilliland  v.  Sellers'  Admr.,  2  O.  How.  305. 


5  426 


VOIDABLE    ACTS    DEFINED. 


587 


persons  under  duress,  are  not  totally  disabled  either  to  con- 
vey or  purchase,  but  sub  modo  only  ;  for  their  conveyances 
and  purchases  are  voidable  but  not  actually  void."  ^  Gen- 
erally speaking  a  voidable  act  or  transaction  is  as  effectual, 
establishes  the  same  rights  and  produces  the  same  results, 
as  a  valid  act,  unless  and  until  it  is  disputed  or  impeached 
by  plea,^  act,  or  otherwise,*  at  the  instance  or  election  of 
some  person,  usually  the  party  injured,^  entitled  so  to  do. 
Whenever  the  act  takes  effect  for  some  purposes,  and  may 
be  avoided  as  to  persons  who  have  an  interest  in  its  im- 


'  2  Bl.  Com.  291.  "There  can  be  no 
middle  character  assigned  to  judicial 
proceedings  which  are  irreversible  for 
error."  Voorhees  v.  Bank  of  U.  S.,  10 
Pet.  475. 

*  See  Somes  v.  Brewer,  2  Pick.  (Mass.) 
197. 

'  Voidable  acts  effectual  until  im- 
peached,— "The  conveyance  in  either 
form  is  voidable,  and  not  void,  if  fraud- 
ulent as  to  creditors  ;  and  until  defeat- 
ed by  a  creditor,  the  title  of  the  grantor 
passes.  The  deed  is  good  in  all  cases 
between  the  parties,  however  fraudu- 
lent the  intent."  Mansfield  v.  Dyer, 
131  Mass.  201.  See  Freeland  v.  Free- 
land,  102  Mass.  477  ;  Dunn  v.  Dunn, 
82  Ind.  42 ;  Harvey  v.  Varney,  98  Mass. 
1 18  ;  Hill  V.  Pine  River  Bank,  45  N.  H. 
309;  Jones  v.  Bryant,  13  N.  H.  57. 
"  Such  [fraudulent]  conveyances  are 
entirely  good  as  between  the  parties 
and  all  other  persons,  except  those  who 
are  injured,  or  intended  to  be  injured, 
by  them,  to  wit,  creditors  of  the  grant- 
or." Walton  V.  Tusten,  49  Miss.  575. 
Citing  Sherk  v.  Endress,  3  W.  &  S. 
(Pa.)  255;  Dyer  v.  Homer,  22  Pick. 
(Mass.)  253 ;  Randall  v.  Phillips,  3 
Mason  378,  et  seg.  See  McMaster  v. 
Campbell,  41  Mich.  516;  Strange  v. 
Graham,  56  Ala.  620.  "The  author- 
ities ....  do  not  sustain  their  posi- 
tion  that   if  an   administrator,  who   is 


about  to  sell  real  estate,  procures  a 
person  to  purchase  it  on  his  account, 
the  sale  is  therefore  void.  The  heirs 
may,  within  a  reasonable  time,  elect  to 
avoid  it,  and  the  purchaser  is  in  such 
case  regarded  as  a  trustee;  or  they 
may  allow  it  to  stand,  and  in  such  case 
it  is  valid  without  any  further  act." 
Ives  V.  Ashley,  97  Mass.  204.  "  A 
purchase  of  trust  property  by  a  trustee 
at  public  sale  has  always  been  held 
valid  at  law,  and  is  voidable  only  and 
not  void  in  equity.  It  is  voidable  only 
at  the  election  of  the  persons  whose 
interests  are  affected  by  the  purchase." 
Olcott  V.  Tioga  R.R.  Co.,  27  N.  Y.  567. 
Citing  Jackson  v.  Van  Dalfsen,  5  Johns. 
(N.  Y.)  47;  Jackson  v.  Walsh,  14 
Johns.  (N.  Y.)  407  ;  Wilson  v.  Troup, 
2  Cow.  (N.  Y.)  196-238;  Mackintosh 
V.  Barber,  i  Bing.  50;  Campbell  v. 
Walker,  5  Ves.  678,  and  note  a ; 
Whicbcote  v.  Lawrence.  3  Ves.  740. 
and  note  a. 

*  See  Chandler  v.  Simmons,  97  .Mass. 
511.  A  trustee  cannot  avoid  his  pur- 
chase when  the  cestui  que  trust  is  satis- 
fied. He  can  only  file  a  bill  calling 
upon  the  cestui  que  trust  to  confirm  or 
avoid  the  sale.  McClure  v.  Miller. 
Bailey's  Ch.  (S.  C.)  107;  Williams  v. 
Marshall,  4  G.  &  J.  (.Md.)  376;  Huff  v. 
Earl,  3  Ind.  306. 


588  VOIDABLE  ACTS  DEFINED.  §  426 

peachment,  it  is  voidable  as  distinguished  from  a  nullity.^ 
And  if  process  is  irregular,  so  that  it  is  merely  voidable  and 
not  void,  it  must  be  set  aside  or  vacated  before  trespass  can 
be  brought.^  In  Fischer  v.  Langbein,^  Ruger,  Ch.  J.,  said  : 
"  Process,  however,  that  a  court  has  general  jurisdiction  to 
award,  but  which  is  irregular  by  reason  of  the  non-per- 
formance by  the  party  procuring  it,  of  some  preliminary 
requisite,  or  the  existence  of  some  fact  not  disclosed  in  his 
application  therefor,  must  be  regularly  vacated  or  annulled 
by  an  order  of  the  court,  before  an  action  can  be  main- 
tained for  damages  occasioned  by  its  enforcement."  ^  A 
voidable  writ  is  one  which,  though  improperly  issued  is 
valid  until  vacated  by  some  proper  proceeding.  And 
where  a  contract  turns  upon  circumstances  of  undue  ad- 
vantage, surprise,  or  imposition,  it  is  valid  until  rescinded, 
and,  if  it  is  deliberately  and  upon  full  examination  con- 
firmed by  the  parties,  it  will  become  absolutely  binding.^ 
So  it  seems  that  a  judgment  of  one  of  the  late  Confederate 
State  courts  is  not  absolutely  void.  If  the  defendant  takes 
no  proceedings  to  vacate  it,  and  permits  an  execution  to 
issue,  a  sale  of  the  property  thereunder  is  valid. ^ 

And  as  a  nullity  is  an  act  incapable  of  ratification,  so,  on 

'  Anderson    v.   Roberts,    18  Johns,  where  a  minor  has  made  a  conveyance 

(N.  Y.)  515.     See  Gregory' V.  Whedon,  of  land  during  his  nonage,  he  has  on 

8  Neb.  377;   Tremper  v.  Barton,    18  attaining  his  majority  no  interest  in  the 

Ohio  418;  Brown  v.  Webb,  20  Ohio  lands  subject  to  attachment,  and  his 

389.  right  to  avoid  the  deed  is  a  personal 

"  Day  V.  Bach,  87  N.  Y.  60 ;  Blanch-  privilege  which  can  only  be  exercised 

ard  V.  Goss,  2  N.  H.  491 ;  In  the  Mat-  by  the  infant  or  his  heirs.     Kendall  v. 

ter,   etc.  v.   Bradner,   87   N.   Y.    171.  Lawrence,  22  Pick.  (Mass.)  543. 

Voidable     acts     are    considered    and  '  103  N.  Y.  90. 

deemed  good  until  something  is  done  ■*  Citing  Day  v.  Bach,  87  N.  Y.  56. 

to    defeat    or    rescind    them.     Reese  '  Reese  River  Mining  Co.  v.  Smith, 

River  Mining  Co.  v.  Smith,  L.  R.  4  H.  L.  R.  4  H.  L.  64. 

L.  64;  Oakes  v.  Turquand,  L.  R.  2  H.  '  Bush  v.  Glover,  47  Ala.  167.     See 

L.  325.     "  A  voidable  act  is  one  which  §  424.     A  sale  under  a  void  writ  passes 

has  some  force  and  effect,  but  which,  no  title  to  the  land  sold,  though  it  is 

in  consequence  of  some  inherent  qual-  otherwise  if  the  writ  were  merely  void- 

ity,  may  be  legally  annulled  and  avoid-  able.     Speer  v.  Sample,  4  Watts  (Pa.) 

ed."     I  Bouvier's  Inst.  §  1322.     Thus  368. 


§  427  EFFECT  OF  AVOIDANCE.  589 

the  Other  hand,  defective  acts  which  are  capable  of  being 
legally  ratified  are  usually  voidable.^  "When  a  contract  is 
said  to  be  voidable  it  is  assumed  that  a  contract  has  been 
made,  but  that  it  is  subject  to  being  unmade  at  the  election 
of  one  party."  ^ 

§  427.  Effect  of  avoidance. — A  voidable  act,  as  the  term 
implies,  ordinarily  requires  action  on  the  part  of  the  person 
wronged  to  develop  the  inherent  vice  or  defect  which  bars 
if  out  of  the  class  of  valid  acts.  In  other  words,  in  the  ab- 
sence of  an  effectual  avoidance  it  will  usually  establish  the 
rights  incident  to  a  valid  act.  The  avoidance  is  generally 
the  exclusive  privilege  of  the  injured  party,  and,  as  will 
presently  be  shown,  may  be  effectuated  by  plea,  or  by  bring- 
ing an  action,  filing  a  bill,  and  procuring  a  judgment  of  the 
court  rescinding  the  act ;  by  reconveyance,^  re-entry,  notice 
of  rescission,  etc.'*  It  has  been  plausibly  argued  that  in 
such  cases  the  judgment  does  not  annul  the  contract,  but 
declares  or  decides  that  it  is  null ;  that  an  inherent  vice  or 
defect  renders  it  not  binding  or  obligatory  but  absolutely 
void,  hence  that  the  word  void  as  a  substitute  for  voidable 
as  applied  to  such  vicious  contracts  is  not  improper. '^  This 
argument  is  ingenious,  but  misleading.  True,  after  the 
judgment  of  avoidance  or  act  of  disaffirmance,  the  voida- 
ble act  practically  becomes  a  nullity.  Its  valid  elements 
and  all  semblance  of  regularity  or  legality  are  eliminated. 
But  the  avoidance  which  is  a  personal  privilege  of  the  in- 


'  See  Keane  v.  Boycott,  2  H.  Bla.  512.  reconveyance  could  properly  be  direct- 

'  Holmes'  Common  Law,  p.  315.  ed."  Ogilvie  v.  Jeaffreson,  2  Giffard  381. 

*  If  a  deed  is  not   merely  voidable  •*  See  Whelpdale's  Case,  5  Rep.  119. 

but   wholly   void    no   reconveyance  is  "  The  leading  distinction    is   between 

necessary.     "As  the  person  named  as  judgments   and   decrees   merely  void, 

grantor  and  grantee  had  no  mind  or  and   such   as   arc  voidable  only ;   the 

intention  that  any  estate  should  pass  former  are  binding  nowhere,  the  latter 

from  the  one  to  the  other,  and  were  everywhere,  until  reverst-d  by  a  superior 

merely  cheated  into  the  execution  of  authority."    Ilollingsworth  v.  Barbour, 

deeds   without   a   knowledge  of  their  4  Fet.  471. 

contents,  no  estate  could  pass  and  no  '  PearsoU  v.  Chapin,  44  Pa.  St.  9. 


590  DEFECTIVE    OR    INEFFECTUAL    ACTS.  §  428 

jured  party,  which  he  may  never  exercise,  is  one  of  the 
constituent  parts  of  the  new  nullity,  so  that  in  its  entirety 
it  is  made  up  of  something  more  than  an  act  void  ab  initio. 
In  the  case  instanced  in  Pearsoll  v.  Chapin  the  judgment  is 
necessary  to  avoid  the  legal  effects  of  the  voidable  act, 
while  in  the  case  of  a  pure  nullity  no  adjudication  is  essen- 
tial ;  the  void  act  may  be  ignored.  The  application  of  the 
word  void  to  a  voidable  act,  and  the  appalling  confusion 
incident  to  the  improper  use  of  it  so  prevalent  in  the  cases, 
cannot  be  justified  on  such  a  theory. 

§  428.  Four  classes  of  defective  or  ineffectual  acts. — The 
distinction  in  the  legal  import  of  the  words  void  and  void- 
able is  discussed  with  much  clearness  and  force  in  State  v. 
Richmond.^  The  court,  in  this  case,  as  we  have  elsewhere 
remarked,  attributed  the  confusion  as  to  the  meaning  of 
the  terms  to  the  imperfection  of  our  language,  and  this  is 
possibly  the  most  reasonable,  as  it  certainly  is  the  most 
charitable,,  solution  of  the  difficulty.  The  opinion,  after 
showing  that  there  are  at  least  four  distinct  kinds  of  defects 
which  are  included  within  these  expressions,  while  the  lan- 
guage furnishes  only  these  two  terms  to  express  or  define 
them  all,  proceeds  to  instance  and  classify  the  defects  to 
which  the  terms  void  and  voidable  are  applied,  briefly  as 
follows  :  First,  acts  which  are  wholly  null  and  void,  with- 
out force  or  effect  as  to  all  persons  and  for  all  purposes  and 
incapable  of  being  made  effectual.^  This  is  the  broadest 
sense  of  the  word  void,  and  the  acts  which  fall  within  this 
signification  are  not  numerous.  Second,  acts  which  may 
be  void  as  to  some  persons,  and  for  some  purposes,  and  as 
to  them  incapable  of  being  made  operative,  which  are  yet 
valid  as  to  other  persons  and  effectual  for  other  purposes, 
e.  g.,  a  deed  executed  by  an  idiot,  or  by  a  person  incapable 
of  contracting,  may  be  void  as  to  the  idiot  and  yet  binding 
as  to  others.     Third,  acts  may  be  void  as  to  all  persons  and 

'  26  N,  H.  237.  2  See  §425. 


§  428  DEFECTIVE    OR    INEFFECTUAL    ACTS.  59 1 

for  all  purposes,  or  as  to  some  persons  and  for  some  pur- 
poses, though  not  binding  as  to  others  until  they  are  con- 
firmed ;  but  though  such  acts  are  said  to  be  void,  they  are 
not  so  in  the  broadest  sense  of  that  term,  because  they  have 
a  capacity  of  being  confirmed,  and  after  such  confirmation 
they  are  binding.  For  this  kind  of  defect  our  language 
affords  no  distinctive  term.  These  acts  are  neither  strictly 
void,  that  is,  mere  nullities,  nor  voidable,  because  they  do 
not  require  to  be  avoided  ;  but  until  confirmed  they  are 
without  validity.  They  are  usually  spoken  of  as  void,  and, 
as  usage  is  the  only  law  of  language,  they  are  correctly  so 
called.  It  is,  therefore,  always  to  be  considered  an  open 
question,  to  be  decided  by  the  connection  and  otherwise, 
whether  the  term  void  is  used  in  a  given  instance  in  one 
or  the  other  of  these,  in  some  respects,  dissimilar  senses. 
Fourth,  acts,  contracts,  and  proceedings  are  properly  called 
voidable  which  are  valid  and  effectual  until  they  are  avoided 
by  some  act.  Prima  facie  they  are  valid,  but  they  are  sub- 
ject to  defects  of  which  some  person  has  a  right  to  take  ad- 
vantage, who  may,  by  proper  proceedings  for  that  jjurpose, 
entirely  defeat  and  destroy  them.  Voidable  contracts  are 
in  general,  perhaps  always,  like  the  last  class  referred  to, 
capable  of  confirmation  by  the  party  who  has  the  right  to 
avoid  them. 

Holland  says:^  "A  pretended  act  which  is  deficient  in 
any  one  of  the  '  esseiitialia  negotii'  is  a  '  nullity'  •  void  ab 
initio';  when,  as  a  rule,  the  deficiency  cannot  be  supplied 
by  any  subsequent  change  of  circumstances,  'quod  initio 
vitiostiin  est  noii  potest  tractii  teniporis  convalcsccrcy^  In 
exceptional  cases  the  deficiency  can  be  waived  or  is  cured 
by  lapse  of  time.  In  certain  other  cases  tlie  act,  though 
not  ipso  facto  void,  is  'voidable'  at  the  option  of  a  party 
concerned."  This  statement  reveals  the  same  trouble  en- 
countered   in     State    v.    Richmond.^     The    "exceptional 

'"Elements   of  Jurisprudence,"   by  *  Dig.  '■  17.  29. 

Thomas  Erskine  Holland,  D.C.L.     2d  ^  26  N.  H.  237. 

ed.     Oxford,  1882,  p.  88. 


292  VOID  AND  ILLEGAL  ACTS.  §  429 

cases  "  instanced  are  not  properly  characterized  by  the  word 
void,  for  as  we  have  said  a  void  act  "  is  a  caput  morltc7i?7i 
and  nothing  can  give  it  vitality."^  An  expression  is 
especially  needed  to  characterize  an  act  which  calls  for  a 
change  of  circumstances  and  subsequent  acts  to  develop  it 
and  render  it  effectual  as  the  basis  of  a  right. 

§  429.  Void  and  illegal  acts  discussed. — "  It  is  a  first  prin- 
ciple, and  not  to  be  touched,  that  a  contract  in  order  to  be 
binding,  must  be  lawful."^  As  a  general  rule  no  right  of 
action  can  spring  out  of  an  illegal  contract,  whether  it  is 
prohibited  by  positive  law  or  is  opposed  to  public  policy  or 
contrary  to  good  morals.^  A  contract  malum  m  se  and 
void  as  being  illegal,  must  be  distinguished  from  a  contract 
which  is  void  for  causes  not  involving  moral  turpitude  or 
questions  of  public  policy.** 

An  action  cannot  be  maintained  to  recover  back  moneys 
paid  in  furtherance  of  an  illegal  contract.  The  maxim 
"  Ex  dolo  malo  non  oritur  actio  "  governs.  The  court  will 
never  lend  its  aid  to  a  party  who  founds  an  action  upon  an 
illegal  or  an  immoral  act,^  or  upon  a  breach  of  faith  or  dis- 
closure of  confidential  communications  which  might  com- 
promise or  embarrass  the  government  ;^  and  where  an  ille- 

•  Dewing  v.  Perdicaries,  96  U.  S.  is  founded  on  public  policy.  Thomas 
iq6.  v.  City  of  Richmond,  12  Wall.  349. 

'  Belding  v.  Pitkin,  2  Cai.   (N.  Y.)         '  Collins  v.  Blantern,  i  Smith's  Lea. 

149.     See  Eastham  v.  Roundtree,  56  Cas.  7th  Am.  ed.  667,  and  cases  cited 

Texas  no.  iii  note^;  Wheeler  v.  Russell,  17  Mass. 

3  Pease  v.  Walsh,  39  N.  Y.  Sup.  Ct.  281  ;  Haynes  v.  Rudd,  83  N.  Y.  251  ; 
514.  "No  cause  of  action  can  arise  Dunaway  v.  Robertson,  95  111.  426; 
from  an  undertaking  prohibited  by  Fivaz  v.  Nicholls,  2  C.  B.  501  ;  Nellis 
statute,  whether  the  contract  is  malum  v.  Clark,  20  Wend.  (N.  Y.)  24  ;  Smith 
in  se  ox  malum  prohibitum:'  Peck  v.  v.  Hubbs,  10  Me.  71;  Armstrong  v. 
Burr,  10  N.  Y.  299.  So  "no  resulting  Toler,  11  Wheat.  258  ;  Peck  v.  Burr, 
trust  can  spring  from  an  act  contrary  10  N.  Y.  294.  "  The  sentiment  of 
to  public  policy  or  a  statute."  East-  '  honor  among  thieves '  cannot  be  en- 
ham  v.  Roundtree,  56  Texas  114.  See  forced  in  courts  of  justice."  Wood- 
Murphy  V.  Hubert,  16  Pa.  St.  56.  worth  v.  Bennett,  43  N.  Y.  277. 

*  The  whole  doctrine  of  avoiding  '  Totten  v.  United  States,  92  U.  S. 
contracts  for  illegality  and  immorality  105. 


§  429  VOID    AND    ILLEGAL    ACTS.  593 

gal  contract  has  been  executed,  the  court  will  never  lend 
its  aid  to  enable  either  party  to  disturb  it.^  Lord  Ellen- 
borough  laid  it  down  as  a  settled  rule  "  that  where  a  con- 
tract which  is  illegal  remains  to  be  executed,  the  court  will 
not  assist  either  party  in  an  action  to  recover  for  the  non- 
execution  of  it."~  By  the  common  law  no  person  is  per- 
mitted to  take  advantage  of  his  own  wrong.  In  such  cases 
the  maxim  in  pari  delicto  applies,  and  where  property  has 
been  fraudulently  conveyed  to  a  grantee,  he  will  be  per-  ^^- 
mitted  to  retain  it  as  against  the  grantor,  not  from  any 
merit  of  his  own,  but  because  the  law  will  not  lend  its  aid 
to  a  party  seeking  to  set  aside  his  own  fraudulent  act.'^  So 
equity  will  not  decree  a  specific  performance  of  an  agree- 
ment by  a  fraudulent  grantee  to  reconvey  the  property  to 
the  debtor.^  The  person  who  attempts  to  cheat  others  by 
a  fraudulent  transfer  of  his  property  has  no  right  to  com- 
plain if  he  himself  is  cheated.  There  is  a  rugged  but 
wholesome  justice  in  compelling  him  to  take  that  which 
he  tried  to  give.  It  is  but  even-handed  justice  to  present 
to  the  lips  of  the  defrauder  the  poisoned  chalice  he  had 
prepared  for  the  lips  of  others.^  The  doctrine  of  these 
cases  has  a  very  firm  foundation  in  the  law,  and  the  tend- 
ency of  the  courts  to  exercise  a  species  of  criminal  jurisdic- 


'  Merritt  v.  Millard,  4  Keyes  (N.  Y.)  Sweet  v.  Tinslar,  52  Barb.  (N.  Y.)  271  ; 

208  ;   Robinson   v.    International   Life  Canton  v.  Dorchester,  8  Cush.  (Mass.) 

Assur.   Co.,  42    N.   Y.    56  ;    Smith   v.  525  ;  Grider  v.  Graham,  4  Bibb.  (Ky.) 

Hubbs,    10    Me.    71.     The   court   will  70;  Baldwin   v.  Cawthorne.  19  Vesey 

"  for  the  sake  of  the  public"  take  the  166;  Ellington  v.  Currie,  5   Ircd.  Eq. 

objection    as    to    the   illegality   of  the  (N.  C.)2i;  Dunaway  v.  Robertson,  95 

transaction,  even  though  the  defendant  111.  419  ;  Ryan  v.  Ryan,  97  111.  38.    See 

himself  does  not  raise  it.     Hamilton  v.  Chap.  XXVI.,  supra. 
Ball,  2  Irish  Eq.  194.  "■  See  Ruckman  v.  Riickman,  32  N. 

^  Shiffner  v.  Gordon,   12  East  304.  J.  Eq.  260;    Baldwin  v.  Campfield.  8 

Compare  Brooks  V.  Martin,  2  Wall.  76.  N.  J.  Eq.  897;  Tantum  v.  Miller,  11 

•'  Schuman  v.  Peddicord,  50  Md.  562  ;  N.  J.  Eq.  551  ;  Marlatt  v.  Warwick,  19 

Nellis   V.  Clark,  4  Hill   (N.  Y.)  424;  N.  J.  Eq.  454;  Gill  v.  Henry,  95  Pa. 

Muq^hy  v.  Hubert,  16  Pa.  St,  50.     See  St.  388  ;  Williams  v.  Willrams,  34  Pa. 

Eastham  v.  Roundtree,  56  Texas  no.  St.  312  ;  Sherk  v.  Endress.  3  W.  &  S. 

'Walton  V.  Tusten,  49  Miss.   577;  (Pa.)  255. 
38 


594  POLICY  OF  THE  LAW.  §§  430,  431 

tion,  and  punish  fraudulent  j^^rantors,  has  been  carried  so 
far  that,  in  Cameron  v.  Romele/  the  Supreme  Court  of 
Texas  intimate  that  a  conveyance  made  with  a  fraudulent 
motive,  though  under  a  mistake  as  to  the  liability  of  the 
grantor  for  the  debt,  caused  by  the  fraudulent  representa- 
tions of  the  grantee,  will  not  be  set  aside  at  the  instance  of 
the  grantor. 

§  430.  Policy  of  the  law. — These  rules  are  promulgated  as 
best  calculated  to  frustrate  the  designs  of  persons  who 
engage  in  fraudulent  and  illegal  transactions.  Where  the 
parties  have  contracted  to  execute  or  perform  the  act,  the 
policy  of  the  law  in  withholding  relief  is  to  prevent  the 
contemplated  wrong  ;  where  the  transaction  has  been  con- 
summated, the  intention  of  denying  redress,  or  of  refusing 
to  disturb  or  unravel  the  act,  is  to  punish  the  wrong-doer 
by  leaving  him  to  the  consequences  of  his  folly  and  miscon- 
duct."^ The  salutary  effect  upon  the  community  of  the  rigid 
enforcement  of  these  rules  and  principles  can  scarcely  be 
overestimated.  As  to  the  prohibited  acts  the  parties  are, 
so  to  speak,  attainted,  practically  stripped  of  all  right  to 
redress  by  judicial  process,  and  of  the  power  of  appeal  to 
the  courts.  The  enforcement  of  this  doctrine  of  non- 
recourse to  the  courts  is  more  deadly  and  effectual  than  an 
independent  criminal  prosecution,  founded  upon  the  con- 
templated or  consummated  public  wrong,  for  by  this  means 
the  illegal  transaction  itself,  out  of  which  the  parties  had 
hoped  to  profit,  crumbles  to  pieces.  "  He  that  hath  com- 
mitted iniquity  shall  not  have  equity."^ 

§  431.  Guilty  knowledge. — The  general  principles  relating 
to   illegality  in   acts  and  contracts  may  be  variously  illus- 


'  53  Texas,  238.  ^  Bispham's  Equity,  p.  60;  Francis' 

•See  Smith  v.  Hubbs,   10  Me.  71  ;  Maxims,  p.  5.     See  Cadman  v.  Hor- 

Bolt  V.  Rogers,  3  Paige  (N.  Y.)  154;  ner,  18  Ves.  10;  Creath  v.  Sims,  5  How. 

Miller  \:  Marckle,  21  111.  152;  Duna-  192;    Bleakley's   Appeal,   66    Pa.    St. 

way  V.  Robertson,  95   111.  426  ;  East-  191;    Blystone  v.  Blystone,  51   Pa.  St. 

ham  V.  Roundtree,  56  Texas  no.  373. 


§  43 1  GUILTY    KNOWLEDGE.  595 

trated.  Thus,  in  the  words  of  Chief-Justice  Eyre  in  Light- 
foot  V.  Tenant,^  "  the  man  who  sold  arsenic  to  one  who  he 
knew  intended  to  poison  his  wife  with  it,  would  not  be 
allowed  to  maintain  an  action  upon  his  contract.  The 
consideration  of  the  contract  in  itself  good,  is  there  tainted 

with  turpitude,  which  destroys  the  whole  merit  of  it 

No  man  ought  to  furnish  another  with  the  means  of  trans- 
gressing the  law,  knowing  that  he  intends  to  make  that 
use  of  them."  Of  this  declaration  Judge  Story  said  :  "  The 
wholesome  morality  and  enlarged  policy  of  this  passage 
make  it  almost  irresistible  to  the  judgment ;  and,  indeed, 
the  reasoning  seems  positively  unanswerable."^  No  one 
can  hesitate  to  say  that  such  a  man  voluntarily  aids  in  the 
perpetration  of  the  offense,  and  morally  speaking  is  almost, 
if  not  quite,  as  guilty  as  the  principal  offender.  Lightfoot 
V.  Tenant  was  followed  by  Lord  Ellenborough  in  Langton 
V.  Hughes,^  where  a  druggist  sold  drugs  of  a  noxious  and 
unwholesome  nature  to  a  brewer,  knowing  that  they  were 
to  be  used  in  his  brewery  contrary  to  law,  and  it  was  held 
that  he  could  not  recover  the  price.  It  was  also  relied 
upon  in  Cannan  v.  Bryce,^  in  which  case  it  was  decided 
that  money  lent  to  a  man  to  enable  him  to  settle  his  losses 
on  an  illegal  stock-jobbing  transaction,  could  not  be  recov- 
ered back,  Chief-Justice  Abbott  said  :  "  If  it  be  unlawful 
in  one  man  to  pay,  how  can  it  be  lawful  for  another  to  fur- 
nish him  with  the  means  of  payment  ?  ,  .  .  .  The  means 
were  furnished  with  a  full  knowledge  of  the  object  to 
which  they  were  to  be  applied,  and  for  the  express  pur- 
pose of  accomplishing  that  object."  This  is  an  extreme 
case,  for  the  lender  had  no  interest  in  the  unlawful  trans- 
action, but  merely  loaned  the  money  with  full  knowledge 
of  the  object  for  which  it  was  borrowed.  The  cases  which 
we   have  been    reviewing  are  followed  and  relied  upon  in 

1  I  Bos.  &  P.  551.     See  Hanauer  v.  »  i  M.  &  S.  593. 

Doane,  12  Wall.  342-346.  ■*  3  Barn.  &  Aid.  179. 

'^  Story's  Conflict  of  Laws,  §  253. 


596 


ILLEGAL    ACTS. 


§  4: 


Hanauer  v.  Doane,^  and  in  the  case  of  De  Groot  v.  Van 
Duzer.^  In  the  latter  case  Chancellor  Walworth  observes, 
that  the  "  cases  in  which  an  independent  contract  has  been 
held  void  from  a  mere  knowledge  of  the  fact  of  the  illegal 
end  in  view,  proceed  upon  the  ground  that  the  party  hav- 
ing such  knowledge  intended  to  aid  the  illegal  object  at 
the  time  he  made  the  contract."^ 

§  432.  Illegal  acts. — Within  the  condemned  category  of 
illegal  acts  may  be  instanced  an  agreement  to  pay  for  sup- 
porting for  election  a  candidate  for  sheriff;*  for  resigning 
a  public  position  to  make  room  for  another  f  for  not  bid- 
ding at  a  sheriff's  sale  of  real  property;^  for  not  bidding 
for  articles  to  be  sold  by  the  government  at  auction  ;  "^  for 


1  12  Wall.  348. 

*  20  Wend.  (N.  Y.)  397. 

^  Cases  disti7tgnished. — "  There  are 
cases  to  the  contrary ;  but  they  are 
either  cases  where  the  unlawful  act 
contemplated  to  be  done  was  merely 
malum  prohibitum,  or  of  inferior  crim- 
inality ;  or  cases  in  which  the  unlawful 
act  was  already  committed,  and  the 
loan  was  an  independent  contract, 
made,  not  to  enable  the  borrower  to 
commit  the  act,  but  to  pay  obligations 
which  he  had  already  incurred  in  com- 
mitting it.  Of  the  latter  class  was  the 
.case  of  Armstrong  v.  Toler,  11  Wheat. 
258 ;  of  the  former,  Hodgson  v.  Tem- 
ple, 5  Taunt.  181 In  Hodgson 

V.  Temple,  where  a  buyer  of  spirituous 
liquors  was  known  to  be  carrying  on  a 
rectifying  distillery  and  a  retail  liquor 
shop  at  the  same  time,  contrary  to  law, 
the  vendor  of  the  spirits  was  held  en- 
titled to  recover  the  price.  Sir  James 
Mansfield  said :  '  The  merely  selling 
goods,  knowing  that  the  buyer  will 
make  an  illegal  use  of  them,  is  not  suf- 
ficient to  deprive  the  vendor  of  his  just 
right  of  payment,  but  to  effect  that,  it 
is  necessary  that  the  vendor  should  be 
a    sharer   in   the  illegal  transaction.' 


This  seems  to  have  been  the  view 
taken  by  the  judge  who  tried  this  cause 
below In  our  judgment  it  is  al- 
together too  narrow  a  view  of  the  re- 
sponsibility of  a  vendor  in  such  a  case 
as  the  present.  Where  to  draw  the 
precise  line  between  the  cases,  in  which 
the  vendor's  knowledge  of  the  purchas- 
er's intent  to  make  an  unlawful  use  of 
the  goods  will  vitiate  the  contract,  and 
those  in  which  it  will  not,  may  be  diffi- 
cult.    Perhaps  it  cannot  be  done  by 

exact  definitions It  is  certainly 

contrary  to  public  policy  to  give  the 
aid  of  the  courts  to  a  vendor  who  knew 
that  his  goods  were  purchased,  or  to  a 
lender  who  knew  that  his  money  was 
borrowed,  for  the  purpose  of  being 
employed  in  the  commission  of  a  crim- 
inal act,  injurious  to  society,  or  to  any 
of  its  members.  This  is  all  that  we 
mean  to  decide  in  this  case."  Hanauer 
v.  Doane,  12  Wall.  348. 

*  Swayze  v.  Hull,  8  N.  J.  Law  54. 

^  Eddy  V.  Capron,  4  R.  I.  395  ;  Par- 
sons V.  Thompson,  i  H.  Bl.  322. 

*  Jones  V.  Caswell,  3  Johns.  Cas.  (N. 
Y.)  29. 

■  Doolin  V.  Ward.  6  Johns.  (N.  Y.) 
194. 


§  43^  ILLEGAL    ACTS.  597 

not  bidding  for  a  contract  to  carry  the  mail  on  a  specified 
route  ;  ^  to  pay  a  person  for  his  aid  and  influence  in  pro- 
curing an  office,  and  for  not  being  a  candidate  himself  i'^ 
for  procuring  a  contract  from  the  government  ;  ^  for  lob- 
bying services;*  for  procuring  signatures  to  a  petition  to 
the  governor  for  a  pardon;^  for  securing  a  secret  advan- 
tage over  other  creditors  in  a  composition  proceeding  ; '' 
to  sell  land  to  a  particular  person  when  the  surrogate's 
order  to  sell  should  have  been  obtained  ; ''  to  pay  for  sup- 
pressing evidence  and  compounding  a  felony  ;^  to  convey 
and  assign  a  part  of  what  should  come  from  an  ancestor 
by  descent,  devise,  or  distribution  ;^  to  pay  for  promoting 
a  marriage  ;  ^°  or  to  influence  the  disposition  of  property  by 
will  in  a  particular  way."  Lord  Mansfield  in  Smith  v. 
Bromley,^'  decided  in  1760,  laid  down  the  doctrine  which 
has  since  been  followed,  substantially  in  these  words  :  If 
the  act  is  in  itself  immoral,  or  a  violation  of  the  general 
laws  of  public  policy,  both  parties  arc  zn  pari  delicto,  but 
where  the  law  violated  is  calculated  for  the  protection  of 
the  subject  against  oppression,  extortion,  and  deceit,  and 
the  defendant  takes  advantage  of  the  plaintiff's  condition 
or  situation,  then  the  plaintiff  shall  recover.     Mr.  Frere,  in 

'  Gulick  V.  Bailey,  lo  N.  J.  Law  87.  '  Bridgevvater  v.  Brookfield,  3  Cow. 

-  Gray  v.  Hook,  4  N.  Y.  449.     See  (N.  Y.)  299. 
Trist  V.  Child,  21  Wall.  441.  "  Collins  v.    Blantern,  2  Wils.   347  ; 

*  Tool  Co.  V.  Norris,  2  Wall.  45.  Haynes  v.  Rudd,  83  N.  Y.  251  ;  Fivaz 

•*  Trist  V.  Child,  21  Wall.  441.  v.  Nicholls,  2  C.  B.  501, 
»  Hatzfield  v.  Gulden,  7  Watts  (Pa.)        "  Boynton  v.  Hubbard,  7  Mass.  1 12. 
152.  '"  Scribblehill  v.  Brett,  4  Bro.  P.  C. 

"^  Bliss   V.    Matteson,   45    N.  Y.  22,  144 ;  Arundel   v.   Trevillian,    i    Chan. 

26;    Greenwood  v.  Lidbetter,  12  Price  Rep.  47. 

183  ;   Smith  v.  Stone,  4  Gill  &  J.  (Md.)         "  Debenham  v.  Ox,  i  Ves.  Sen.  276. 

310,322;  Bean  V.  Amsinck,  10  Blatchf.  See    also    Addison    on    Cont.   91;    i 

361;    Partridge   v.    Messer,    14    Gray  Story's  Eq.,  ch.  7  ;  Collins  v.  Blantern, 

(Mass.)   181  ;  Huntington  v.  Clark,  39  i    Smith's    Lea.    Cas.    676.    American 

Conn.  540,  551;    Harvey  V.  Hunt,  119  notes.     See   generally  Trist    v.  Child, 

Mass.  279,  283;  Alsager  v.  Spalding,  21  Wall.  449;    Meguire  v.  Corwine.  loi 

4  Bing.  N.  C.  407  ;  Howden  v.  Haigh,  U.  S.  108. 

II   Adol.  &  E.  1033;  Smith  v.  Cuff,  6        "  2   Doug.  691   n.     See  Thomas  v. 

M.  &  S.  160.  City  of  Richmond.  12  Wall.  355. 


598  ILLEGAL    ACTS.  §  432 

a  note  to  Smith  v.  Bromley/  says  that  a  recovery  can  be 
had  as  for  money  had  and  received  (ist)  where  the  illegality 
consists  in  the  contract  itself,  and  that  contract  is  not  exe- 
cuted— in  such  case  thexQ  \s?i  locus  pceniientice,  the  delichcm 
is  incomplete,  and  the  contract  may  be  rescinded  by  either 
party — (2d)  where  the  law  that  creates  the  illegality  in  the 
transaction  was  designed  for  the  coercion  of  one  party  and 
the  protection  of  the  other ;  or  where  the  one  party  is  the 
principal  offender  and  the  other  only  criminal  from  a  con- 
strained acquiescence  in  such  illegal  conduct.  In  such 
cases  there  is  no  parity  of  delictum  at  all  between  the 
parties,  and  the  party  so  protected  by  the  law,  or  so  acting 
under  compulsion,  may  at  any  time  resort  to  the  law  for 
his  remedy,  though  the  illegal  transaction  be  completed. 
Illegality,  as  applied  to  legal  actions,  denotes  a  "■  complete 
defect  in  the  proceedings,"  ^  and  signifies  something  con- 
trary to  the  principles  of  law  as  distinguished  from  mere 
rules  of  procedure.  "  A  transaction  originally  unlawful 
cannot  be  made  any  better  by  being  ratified."^  Thus  a 
contract  relating  to  trading  with  an  enemy  cannot  be  made 
lawful  by  any  ratification.^  No  principle  is  better  settled 
than  that  contracts  which  contravene  the  law  are  void,  and 
that  the  court  will  never  lend  its  aid  for  their  enforcement. 
Illegal  contracts  are  not  such  only  as  stipulate  for  some- 
thing that  is  unlawful ;  but,  where  the  intention  of  one  of 
the  parties  is  to  enable  the  other  to  violate  the  law,  the  con- 
tract is  corrupted  by  such  illegal  intention,  and  is  void.^ 
It  was  so  held  where  the  consideration  for  a  note  was  the 
delivery  of  a  quantity  of  guns  which  the  payee  knew  would 


'  2   Doug.   697a.      See   Thomas  v.        °  Tatum   v.   Kelley,   25    Ark.    209 ; 

City  of  Richmond,  12  Wall.  355.  Pratt  v.  Adams,  7  Paige  (N.  Y.)  615  ; 

"^  Tidds'   Pr.   435.      See   Ex   parte    Branch    Bank   v.    Crocheron,    5    Ala. 

Gibson,  31  Cal.  625.  250;  Beach  v.  Kezar,    i    N.    H.  184; 

^  United   States   v.    Grossmayer,  9     Steele    v.    Curie,   4  Dana  (Ky.)   381  ; 

Wall.  75.  Girarday   v.   Richardson,  i    Esp.  13; 

■*  United   States    v.    Grossmayer,  9     Langton  v.   Hughes,    i   M.  &  S.  593 ; 

Wall.  75.  Lightfoot  v.  Tenant,  i  Bos.  &  P.  551. 


§  433  PRESUMPTION  OF  LEGALITY.  599 

be  used  in  aid  of  the  rebellion.  A  recovery  on  the  note 
was  defeated  on  the  ground  that  the  payee  of  the  note 
"  concurred  with  and  actively  promoted  the  unlawful  and 
treasonable  purpose  of  the  defendants." ^  "No  crime  is 
greater  than  treason,'"-^  and,  as  has  been  seen,^  any  transac- 
tion or  act  tending  to  foster  and  aid  rebellion  is  void  in  the 
sense  of  being  illegal,  and  cannot  be  made  the  foundation 
of  any  rights.^ 

A  promise  by  a  married  person  to  marry  is  \oid,'''  as  is 
also  any  promise  predicated  upon  illicit  intercourse  or  im- 
moral conduct.^ 

§  433.  Presumption  of  legality. — It  may  be  observed  that 
the  presumption  obtains  that  the  parties  do  not  intend  to 
violate  the  law,''  and  where  a  contract  is  capable  of  two 
constructions,  the  one  making  it  valid  and  the  other  void, 
the  first  will  be  adopted.^  The  purpose  of  the  rule  denying 
relief  upon  illegal  contracts  is,  not  to  shield  the  defendant, 
but  on  the  contrary  to  refrain  from  lending  aid  to  a  guilty 
plaintiff,  who  will  not  be  permitted  to  approach  the  altar  of 
justice  with  unclean  hands.^  Hence  if  the  plaintiff  and  de- 
fendant were  to  change  sides  and  the  defendant  was  to 
bring  an  action  against  the  plaintiff,  the  latter  would  then 


'  Tatum   V.   Kelley,    25    Ark.    212.  Lorillard  v.  Clyde,  86  N.  Y.  387 ;  Bes- 

S.  P.  Ruddell  V.  Landers,  25  Ark,  238;  sent  v.  Harris,  63  N.  C.  542 ;  Curtis  v. 

McMurtry   v.    Ramsey,   25   Ark.  349 ;  Gokey.  68  N.  Y.  304 ;  Mittelholzer  v. 

Booker  v.  Robbins,  26  Ark.  660.  Fullarton,  6  Q.  B.  989.     See  §§  5.  6. 

*  Hanauer  v.  Doane,  12  Wall.  347.  *■  Kenton  Co.  Court  v.  Bank  Lick  T. 
3  See  §424.  Co.,  10  Bush  (Ky.)  529;  Lorillard  v. 
"  Keith    V.    Clark,    97    U.     S.    464 ;  Clyde,  86  N.  Y.  387  ;  Mayor  of  Nor- 

Dewing  v.  Perdicaries,  96  U.  S.  195.  wich  v.  Norfolk  R.R.  Co.,  4  El.  &  B. 

»  Drennan  v.  Douglas,  102  111.  341.  397;  Curtis  v,  Gokey,  68  N.  Y.  304; 

See  Noice  v.  Brown,  39  N,  J.  Law  133.  Archibald  v.  Thomas,  3  Cow.  (N.  Y.) 

*  Goodall  V.  Thurman,  i  Head  284  ;  Hunter  v.  Anthony,  8  Jones'  Law 
(Tenn.)  209,  218;  Baldy  v.  Stratton,  (N.  C.)  385;  Pcckham  v.  Haddock,  36 
II  Pa.  St.  316;  Hanks  v.  Naglee,  54  111.  38;  Merrill  v.  Melchior.  30  Miss. 
Gal.  51;  Trovinger  v.  McBurney,  5  516;  Patrick  v.  Grant,  14  Me.  233; 
Cow.  (N.  Y.)  253.  Williams  v.  East  India  Co.,  3  East  192. 

'  Marsh  v.  Whitmore,  21  Wall,  178;  '  See  Nellis  v,  Clark,  4  Hill  (N.  Y.) 

Foster  v,   Rockwell,   104   Mass.   167;  426;  Bartle  v,  Coleman,  4  Pet.  184. 


600  VOID    IN    PART,    VOID    IN    TOTO.  §  434 

have  the  advantage ;  for  where  both  parties  are  equally  at 
fault,  potior  est  conditio  defendentis}  The  policy  of  the 
law,  as  we  have  seen,  is  to  leave  the  parties  in  all  such  cases 
without  remedy  against  each  other,*^  not  as  a  protection  to 
the  defendant,  but  as  a  disability  or  punishment  inflicted 
upon  the  plaintiff.^  "Where  there  is  turpitude  the  law  will 
help  neither."* 

§  434.  Void  in  part,  void  in  toto. — Where  claims  for  ser- 
vices honestly  rendered,  which  would  otherwise  be  just,  are 
blended  and  confused  with  those  which  are  forbidden,  the 
whole  is  a  unit  and  indivisible  ;  that  which  is  bad  destroys 
that  which  is  good,  and  they  perish  together,^  So  a  mort- 
gage voidable  by  reason  of  an  intention  participated  in  by 
both  parties  to  hinder,  delay,  and  defraud  the  mortgagor's 
creditors  is  fraudulent  in  toto,  and  cannot  be  supported  as 
against  creditors,  even  to  the  extent  of  an  actual  debt 
covered  by  such  mortgage.*^  And  in  New  York  a  mort- 
gage, which  is  fraudulent  by  reason  of  provisions  contained 
in  it,  allowing  the  mortgagor  to  sell  merchandise  covered 
by  it,  in  the  usual  course  of  trade,  is  ineffectual  as  to  every 
other  kind  of  property  embraced  in  it.  The  fraudulent 
portion  vitiates  the  entire  instrument.'''  And  as  a  general 
rule  a  deed  which  is  fraudulent  in  part  as  to  creditors  will 
be  declared  void  in  toto} 


'  Holman  v.  Johnson,  Cowp.  341.  Jackson  v.  Packard,  6  Wend.  (N.  Y.) 

'^  Horton  v.  Buffinton,  105  Mass.  400.  415 ;  Harman  v.  Hoskins,  56  Miss.  142  ; 

'  Myers  v.  Meinrath,  loi  Mass.  367.  Horton  v.  Williams,  21  Minn.  187. 

■*  Trist  V.  Child,  21  Wall.  452,  *  Holt  v.  Creamer,  34  N.  J.  Eq.  187  ; 

^  Meguire  V.  Corwine,  loi  U.  S.  Ill  ;  Mead   v.   Combs,   19   N.  J.   Eq.   112; 

Trist  V.  Child,  21  Wall.  441.  Roberts  on    Fraud.   Conv.    521.     See 

•^  See  Weeden  v.  Hawes,  10  Conn.  §  194.    A  grantor  cannot  recognize  the 

50;  Beall  V.  Williamson,   14  Ala.  55;  grantee's  possession  of  an  instrument 

Sommerville  V.  Horton,  4  Yerg.  (Tenn.)  of  transfer  as  valid  for  some  purposes 

541  ;  Hyslop  v.  Clarke,  14  Johns.  (N.  and   disclaim    it    as    being   otherwise 

Y.)  458  ;  Holt  V.  Creamer,  34  N.  J.  Eq.  nugatory,    especially   when    to   do    so 

187.  would  result  in  an  injury  to  an  inno- 

■"  Russell  v.Winne,  37  N.  Y.  591.    See  cent  party.   Cotton  v.  Gregory,  10  Neb. 

Goodrich  V.  Downs,  6  Hill  (N.  Y.)  438  ;  129.     It  has  been  said  that  "no  one 


§§  435»  436  ACTS  VOID.  6or 

§  435.  Void  acts  which  are  not  illegal. — While  an  illegal 
contract  is  void  it  does  not  necessarily  follow  that  every 
void  contract  is  illegal  in  the  full  sense  of  that  word,  or 
that  all  the  disabilities  incident  to  an  illegal  act  pertain  to 
a  void  act.^  Thus,  the  case  of  money  paid  under  a  contract 
void  by  statute,  but  not  illegal  in  its  full  sense,  is  different 
from  a  purely  illegal  act.^  If  the  act  is  not  maluvi  in  sc 
it  may  afford  a  basis  upon  which  an  appeal  mav  be  made 
to  the  courts.  The  distinction  may  be  indicated  in  a  variety 
of  ways,  some  of  which  will  be  considered. 

§  436.  Acts  void  by  statute  of  frauds. — Contracts  void  by 
the  statute  of  frauds  afford  an  illustration,^  .\  contract 
which  comes  within  the  act  to  prevent  frauds  and  perjuries 
is  not  entirely  void.  It  is  valid  to  some  purposes  or  in- 
deed to  every  purpose,  except  that  an  action  at  law  cannot 
be  sustained  for  its  breach,  or  a  bill  in  chancery  to  compel 
its  execution.  If  it  is  fulfilled  by  the  parties  it  is  as  effect- 
ual as  any  other  contract.  If  it  is  dissolved,  precisely  the 
same    consequences   follow.*     A    verbal    agreement    is    of 

can  at  the  same  time  insist  that  a  con-  the  good  be  mixed  with  the  bad  it  shall 

tract  is  in  force  and  is  not  in  force,  nor  nevertheless  stand,  provided  a  separa- 

recover  on  a  basis  which  his  proceed-  tion  can  be  made.   The  exceptions  are  : 

ings  contradict ;  and  whilst  a  voidable  First,  where  a  statute,  by  its  express 

transaction  remains  unavoided  it  oper-  terms,  declares  the  whole  deed  or  con- 

ates  as  one  that  is  binding  ;  and  no  tract  void  on  account  of  some  provision 

action    that   contemplates    it    as   one  which  is  unlawful ;  and  second,  where 

w'hich  has  been  avoided  can  be  main-  there  is  some  all-pervading  vice,  such 

tained."     Campbell  v.  Kuhn,  45  Mich,  as  fraud,  for  example,  which  is  ,con- 

518;   s.  C.  40  Am.   Rep.  479.     Judge  demned  by  the  common  law,  and  avoids 

Comstock  said,  however,  in  Curtis  v.  all  parts  of  the  transaction  because  all 

Leavitt,    15    N.   Y.    96:   "A    doctrine  are  alike  infected." 

which  is  expressed  in  the  words  'void  '  See  Parkersburg  v.  Brown,  106  U. 

in  part,  void  in  toto,'  has  often  found  S.  487;  Davis  v.  Old  Colony  R.R.  Co., 

its  way  into  books  and  judicial  opin-  131   Mass.  258:  Day  v.  N.  Y.  Central 

ions  as  descriptive  of  the  effect  which  a  R.R.  Co.,  51  N.  Y.  590. 

statute  may  have  upon  deeds  and  other  '  Leake's    Dig.   Law  of  Cont.  763  ; 

instruments  which  have  in  them  some  Jessopp  v.  Lutwyche,    10   Exch.  614; 

forbidden  vice.     There  is,  however,  no  Rosewarne  v.  Billing,  15  C.  B.  N.S.  316. 

such  general   principle  of  law  as  the  ^  Pawie  v.  Gunn,  4  Bing.  N.  C.  445. 

maxim  would  seem   to  indicate.     On  ^  McCampbcll  v.  McCampbell,  5  Litt. 

the  contrary,  the  general  rule  is,  that  if  (Ky.)  92. 


602 


ACTS    VOID. 


§  436 


course  valid  unless  the  statute  of  frauds  interferes.^  If  a 
party  pays  money,  or  renders  services,  or  delivers  property 
upon  the  faith  of  an  agreement  condemned  by  the  statute 
of  frauds,  the  money  may  be  recovered  back  in  an  action 
for  money  had  and  received,^  or  judgment  may  be  rendered 
for  the  value  of  the  services  or  the  property,  upon  an  im- 
plied assumpsit  to  pay,  provided  the  party  can  show  a  will- 
ingness to  perform  the  agreement  on  his  part,  and  that  the 
other  party  has  repudiated  or  refused  to  perform  it.^  So  a 
recovery  may  be  had  upon  a  quantum  mertiit  where  ser- 
vices were  rendered  under  such  an  agreement.'*  The  law  in 
such  cases  recognizes  the  existence  of  the  agreement  and 
treats  it  as  morally  binding.^    There  is  no  turpitude.     The 


'  Piatt  V.  Hudson  River  R.R.  Co.,  21 
N.  Y.  308.  In  this  case  Selden,  J., 
said :  "  A  contract  to  make  and  exe- 
cute a  certain  written  agreement,  the 
terms  of  which  are  specific,  and  mu- 
tually understood,  is  in  all  respects  as 
valid  and  obligatory,  where  no  statu- 
tory objection  interposes,  as  the  written 
contract  itself  would  be,  if  executed.  If, 
therefore,  it  should  appear,  from  the 
evidence,  that  the  minds  of  the  parties 
had  met ;  that  a  proposition  for  a  con- 
tract had  been  made  by  one  party  and 
accepted  by  the  other ;  that  the  terms 
of  this  contract  were,  in  all  respects, 
definitely  understood  and  agreed  upon, 
and  that  a  part  of  the  mutual  under- 
standing was,  that  a  written  contract, 
embodying  those  terms,  should  be 
drawn  and  executed  by  the  respective 
parties,  this  is  an  obligatory  contract, 
which  neither  party  is  at  liberty  to  re- 
fuse to  perform.  Such  a  case  cannot 
be  distinguished  from  that  of  an  agree- 
ment to  execute  a  lease.  If  two  parties 
negotiate  for  a  lease  of  certain  prem- 
ises, and  they  agree  upon  the  terms 
and  conditions  of  the  lease,  and  that 
a  written  lease  shall  be  drawn  and 
executed,  embracing  those  terms,  this 
is  not  a  leaSe,  but  it  is   a   contract, 


which,  whenever  the  statute  of  frauds 
does  not  interfere  to  prevent,  can  be 
enforced ;  and  which  the  courts  will 
compel  the  parties  specifically  to  per- 
form. The  books  are  full  of  such 
cases,  and  it  can  hardly  be  necessary  to 
refer  to  them  at  length.  It  is  required, 
in  such  cases,  that  the  preliminary 
agreement  to  execute  the  lease  should 
itself  be  in  writing  ;  but  this  is  merely 
to  avoid  the  effect  of  the  statute  of 
frauds.  Wherever  there  is  anything  to 
take  the  case  out  of  the  operation  of 
the  statute  the  agreement,  although  by 
parol,  will  be  enforced." 

•  Allen  V.  Booker,  2  Stew.  (Ala.)  21  ; 
Kidder  v.  Hunt,  i  Pick.  (Mass.)  328  ; 
Hambell  v.  Hamilton,  3  Dana  (Ky.) 
501. 

2  Day  v.  New  York  Central  R.R.  Co., 
51  N.  Y.  590;  S.  C,  second  appeal,  89 
N.  Y.  616 ;  Gillet  v.  Maynard,  5  Johns. 
85  ;  King  v.  Brown,  2  Hill  (N.  Y.)  485  ; 
Cook  v.  Doggett,  2  Allen  (Mass.)  439  ; 
Erben  v.  Lorillard,  19  N.  Y.  299;  Rich- 
ards v.  Allen,  17  Me.  296. 

^  Shute  v.  Dorr,  5  Wend.  (N.  Y.) 
204. 

^  In  Abbott  V.  Draper,  4  Denio  (N. 
Y.)  51,  Chief-Justice  Bronson  says: 
"  Although  the  statute  declares  a  parol 


§437  ACTS  VOID.  603 

principle  is  that  a  party  who  has  received  anything  of  value 
under  an  agreement  of  this  character,  and  then  has  refused 
to  perform  it,  ought  in  justice  to  make  restitution,  and 
hence  the  law,  for  the  purpose  of  doing  justice  to  the  other 
party,  will  imply  an  assumpsit^  And  where  a  contract 
which  might  have  been  avoided  under  the  statute  has  been 
fully  executed,  the  provisions  of  the  statute  do  not  apply. ^ 
When  a  verbal  contract  is  performed  by  the  conveyance  of 
land  on  the  one  part,  there  can  be  no  difficulty  in  compel- 
ling the  equivalent  from  the  other  contracting  part  v.  A 
court  of  equity  can  decree  specific  performance  if  that  is 
needed,  and  a  court  of  law  can  allow  a  recovery  of  the  pur- 
chase-money if  that  is  all  that  is  sought.^ 

§  437.  —  In  King  v.  Brown  *  the  plaintiff  was  allowed  to 
recover  for  work  performed  for  the  defendant,  though  the 
work  was  to  have  gone  in  payment  for  land  to  be  conveyed 
to  him  by  the  defendant  under  a  contract  void  by  the 
statute  of  frauds.  Nelson,  J.,  said:  "The  contract  being 
void  and  incapable  of  enforcement  in  a  court  of  law,  the 
party  paying  the  money  or  rendering  the  services  in  jnu-- 
suance  thereof,  may  treat  it  as  a  nullity  and  recover  the 
money  or  value  of  the  services  rendered  under  the  common 
counts.  This  is  the  universal  rule  in  cases  where  the  con- 
tract is  void  for  any  cause  not  illegal,  if  the  defendant  be 
in  default."  The  contract  itself  may  be  used  for  the  pur- 
poses of  defense  as  a  shield  to  protect  the  defendant  against 

contract  for  the  sale  of  lands  void,  it  Price  v.  Leyburn,  Gow   109;  Randall 

does  not  make  it  illegal.     It  is  not  a  v.  Turner,  17  Ohio  St.  262;  Brown  v. 

corrupt  or  wicked  agreement ;  nor  does  Bellows,  4  Pick.  (Mass.)  179  ;  Fitzsim- 

it  violate  any  principle  of  public  policy,  mons  v.  Allen,  39  111.  440. 

Parties  are  at  liberty  to  act  under  such  ^  Thomas   v.    Dickinson,    12    N.  Y. 

contracts  if  they  think  proper."  364;  Holland  v.  Hoyt,   14   Mich.  238; 

'Day   V.    New  York   Central    R.R.  Butler  v.  Lee,  11  Ala.  885  ;  Wilkinson 

Co.,  51  N.  Y.  590.    See  Greer  v.  Greer,  v.  Scott,    17    Mass.    249;    Linscott    v. 

18  Me.   16;    Davenport  v.  Mason,   15  Mclntire,  15  Me.  201  ;  Gibson  v.  Wil- 

Mass.  85.  coxen,  16  Ind.  333;  Bowen  v.  Bell,  20 

■^  McCue    V.    Smith,    9    Minn.   252;  Johns.  (N.  Y.)  338. 

Pawle   V.    Gunn,  4    Bing.    N.  C.  445  :  *  2  Hill  (N.  Y.)  487. 


6o4  ACTS  VOID.  §  437 

unconscionable  demands  and  claims  growing  out  of  it/  So 
a  party  in  possession  under  a  void  parol  lease  may  show 
that  he  is  not  a  trespasser,^  and  may  even  maintain  trespass 
against  the  owner.^ 

It  will  thus  be  seen  that  a  contract  is  not  void  under  the 
policy  of  the  statute  of  frauds,  because  the  parties  are  in 
pari  delicto,  or  have  negotiated  with  reference  to  matters 
involving  moral  turpitude,  but  because  they  have  failed  to 
provide  themselves  with  such  legal  evidence  of  the  exist- 
ence of  the  contract  as  can  be  effectually  produced  in  the 
courts.  It  is  not  the  intention  or  policy  of  the  law  to  do 
anything  further  than  to  prevent  the  enforcement  of  the 
contract ;  there  is  no  guilt  to  be  punished  by  denying  or 
withholding  redress  to  one  of  the  parties  to  such  a  contract 
when  he  has  parted  with  a  portion  of  the  consideration  on 
the  faith  of  the  void  act.  The  statute  of  frauds,  it  may  be 
observed,  "  was  not  made  to  encourage  frauds  and  cheats."  ^ 
The  ground  upon  which  the  court  interposes  its  aid  in  a 
clear  case  of  part  performance  of  a  verbal  agreement  is, 
that  to  withhold  it  would  be  to  suffer  a  party  seeking  to 
shelter  himself  under  the  statute  of  frauds  to  himself  com- 
mit a  fraud.^ 

Under  this  statute  interests  in  realty  can  only  be  trans- 
ferred by  an  instrument  in  writing,  yet  courts  of  equity  will 
uphold  parol  sales  and  gifts  of  real  estate  which  have  been 
followed  by  certain  acts  of  part  performance,  especially 
where  the  donee  or  vendee  has  made  improvements.      In 


1  See  Gray  v.  Gray,  2  J.J.  Mar.  (Ky.)  ■*  See  2  Lomax's  Digest,  41. 

21;     Basford     v.    Pearson,    9     Allen  ^  Woods    v.    Dille,    11    Ohio     455; 

(Mass.)    387  ;    Roberts   v.  Tennell,   3  Ryan  v.  Dox,  34  N.  Y.  307  ;  Rose  v. 

Mon.  (Ky.)  247  ;  Philbrook  v.  Bellcnap,  Bates,  12  Mo.  30;  Jackson  v.   Bull,  2 

6  Vt.  383;  Burlingame  v.  Burlingame,  Cai.  Cases  (N.Y.)  301.     But  to  entitle 

7  Cow,  (N.  Y.)  92  ;  King  v.  Brown,  2  a  party  to  a  decree  of  specific  perform- 
Hill  (N.  Y.)  485.  See  McCampbell  v.  ance  on  a  parol  contract  it  must  be 
McCampbell,  1 5  Am.  Dec.  63,  notes.  clearly   proved.      Whitridge   v.    Park- 

•  Roberts  v.  Tennell,  3  Mon.  (Ky.)  hurst,  20  Md.  62  ;  Church  of  the  Ad- 

248.  vent  V.  Farrow,  7    Rich.  Eq.  (S.  C.) 

^  Wilber  v.  Paine,  i  Ohio  251.  378 ;  Lobdell  v.  Lobdell,  36  N.  Y.  327. 


§  43^  VOID    CORPORATE    ACTS.  605 

such  cases  rights  of  action  may  be  said  to  have  arisen  out 
of  void  acts.^ 

§  438.  Void  corporate  acts. — The  principle  apphcabie  to 
acts  or  contracts  which  are  void  or  incapable  of  enforce- 
ment, or  impossible  of  execution  by  reason,  for  instance, 
of  want  of  power  in  the  parties  to  contract  with  reference 
to  the  subject-matter,  is  illustrated  in  the  case  of  Chapman 
V.  County  of  Douglas.^  In  that  case  it  appeared  that  a 
county  had  purchased  lands,  and,  pursuant  to  the  contract 
with  the  vendor,  had  issued  securities  for  a  portion  of  the 
purchase-money  without  authority  of  law.  The  court  de- 
cided that  the  vendor  was  entitled  to  restitution  of  the  title 
upon  surrendering  the  void  securities.  Matthews,  J.,  said  : 
"  The  illegality  in  the  contract  related,  not  to  its  substance, 
but  only  to  a  specific  mode  of  performance,  and  does  not 
bring  it  within  that  class  mentioned  by  Mr.  Justice  Bradley 
in  Thomas  v.  City  of  Richmond.^  The  purchase  itself,  as 
we  have  seen,  was  expressly  authorized.  The  agreement 
for  definite  times  of  payment  and  for  security  alone  was 
not  authorized.  It  was  not  illeo-al  in  the  sense  of  beinjr 
prohibited  as  an  offense  ;  the  power  in  that  form  was  sim- 
ply withheld.  The  policy  of  the  law  extends  no  further 
than  merely  to  defeat  what  it  does  not  permit,  and  imposes 
upon  the  parties  no  penalty."  The  court  said  that  the  case 
fell  within  the  rule,  that  "  where  no  penalty  is  imposed, 
and  the  intention  of  the  legislature  appears  to  be  simply 
that  the  agreement  is  not  to  be  enforced,  there  neither  the 
agreement  itself  nor  the  performance  of  it  is  to  be  treated 


'See   "Verbal   Sales   and   Gifts   of  44  Md.  617  ;  Neale  v.  Neales,  9  Wall. 

Real  Estate,"  by  Hon.  Jno.  W.  Daniel,  i ;  Merithew  v.  Andrews.  44  Barb.  (N. 

7  Va.  L.  J.  193;    Rhea  v.  Jordan,  28  Y.)  200;  Brown  v.  Jones,  46  Barb.  (N. 

Gratt.  (Va.)  683  ;  Tracy  v.  Tracy,  14  Y.)  400  ;  Miller  v.  Ball,  64  N.  V.  292  ; 

West  Va.  243  ;   Freeman  v.  Freeman,  Hutchins  v.  Hutchins,  98  N.  Y.  65. 

43  N.  Y.  34;  Young  V.  Glendenning,  ''  107  U.  S.  356.     See  Salt  Lake  City 

6  Watts  (Pa.)  510;  Galbrailh  v.  Gal-  v.  Hollister,  118  U.  S.  263. 

braith,  5  Kansas  409;  Kurtz  v.  Hibncr,  '  12  Wall.  349,  356. 
55  111.  521 ;   Hardesty  v.  Richardson, 


6o6  VOID  CORPORATE  ACTS.  §  438 

as  unlawful  for  any  other  purpose."  ^  This  is  further  illus- 
trated in  Hitchcock  v.  Galveston,*^  where  a  recovery  was 
allowed  for  the  value  of  the  benefit  conferred  upon  a  munic- 
ipal corporation,  notwithstanding  that  the  contract  to  pay 
in  bonds  was  held  to  be  illegal  and  void,  but  indeed  for 
that  very  reason.  "  It  matters  not,"  said  Strong,  J.,  "  that 
the  promise  was  to  pay  in  a  manner  not  authorized  by  law. 
If  payments  cannot  be  made  in  bonds  because  their  issue 
is  ^lltra  vires,  it  would  be  sanctioning  rank  injustice  to 
hold  that  payment  need  not  be  made  at  all.  Such  is  not 
the  law.  The  contract  between  the  parties  is  in  force,  so 
far  as  it  is  lawful."  The  legal  liability  springs  from  the 
moral  duty  to  make  restitution.^  The  case  of  Parkersburg 
V.  Brown"*  furnishes  an  additional  illustration  of  this  dis- 
tinction ably  and  lucidly  set  forth.  It  appeared  that  an 
act  of  the  legislature  of  West  Virginia  authorized  the  city 
of  Parkersburg  to  issue  bonds,  with  a  view  to  lending  the 
same  to  persons  engaged  in  manufacturing.  There  was  no 
provision  in  the  constitution  of  West  Virginia  which  au- 
thorized the  levying  of  taxes  to  be  used  to  aid  private  per- 
sons in  conducting  private  manufacturing  enterprises.  The 
Supreme  Court  held  that  in  the  absence  of  such  a  constitu- 
tional provision,  the  bonds  were  absolutely  void,  for  the 
reason  that  taxation  for  their  payment  would  not  be  for  a 
public  purpose,  but  would  be  taking  private  property  of 
one  person  for  the  private  use  of  another.^     The  city  had 

1  Pollock's    Principles   of  Contract,  '=  No  taxatio7i  for  private  purposes. — 

264.     See  Johnson  v.  Meeker,  i  Wis.  Taxes  are  burdens  or  charges  imposed 

436  ;  Morville  v.  American  Tract  So-  by  the  legislature  upon  persons  or  prop- 

ciety,  123  Mass.  129-137.  erty  to  raise  money  for  public  purposes. 

-  96  U.  S.   341 ;    S.  P.  Chapmain  v.  Cooley's  Constitutional  Limitations,  p. 

County  of  Douglas,  107  U.  8.  357.  479-     See   Northern   Liberties   v.   St. 

^  See,  also.  State  Board  of  Agricul-  John's  Church,  13  Pa.  St.  104  ;   Han- 

ture  V.  Citizens'  Street  Railway  Co.,  47  son  v.  Vernon,  27  Iowa  47  ;  Whiting 

Ind.  407  ;  Clark  v.  Saline  Co.,  9  Neb.  v.  Sheboygan,  etc.  R.R.  Co.,  25  Wis. 

516;  Pimentalv.  City  of  San  Francisco,  188.     Money  cannot  be  raised  by  tax- 

21  Cal.  362.  ation  to  loan  to  individuals  to  establish 

4  106  U.  S.  487.  saw  or  grist  mills  (Allen  v.  The  Inhab- 


§438 


VOID    CORPORATE    ACTS. 


607 


taken  possession  of  certain  property  which  had  been  given 
as  security  for  the  void  bonds.  The  court  decided  that, 
notwithstanding  the  invalidity  of  the  bonds  and  of  the 
trust,  the  holders  of  them  had  the  right  to  reclaim  this 
property,  and  to  call  upon  the  city  to  account  for  it. 
Blatchford,  J.,  said  :  "  The  enforcement  of  such  right  is 
not  in  afiSrmance  of  the  illegal  contract,  but  is  in  disaffirm- 
ance of  it,  and  seeks  to  prevent  the  city  from  retaining  the 
benefit  which  it  has  derived  from  the  unlawful  act.'  There 
was  no  illegality  in  the  mere  putting  of  the  property  by 
the  O'Briens  in  the  hands  of  the  city.  To  deny  a  remedy 
to  reclaim  it  is  to  give  effect  to  the  illegal  contract.     The 


itants  of  Jay,  66  Me.  124) ;  or  to  enable 
private  citizens  to  rebuild  portions  of  a 
city  destroyed  by  fire  (Lowell  v.  Bos- 
ton, 1 1 1  Mass.  454)  ;  or  to  aid  private 
schools  (Jenkins  v.  Andover,  103  Mass. 
94 ;  Curtis  v.  Whipple,  24  Wis.  350). 
See  Whiting  v.  Sheboygan,  etc.  R.R. 
Co.,  25  Wis.  188.  In  Cole  v.  La  Grange, 
113  U.  S.  6,  Mr.  Justice  Gray  said: 
"  The  general  grant  of  legislative  pow- 
er in  the  Constitution  of  a  State  does 
not  enable  the  legislature,  in  the  exer- 
cise either  of  the  right  of  eminent  do- 
main, or  of  the  right  of  taxation,  to 
take  private  property,  without  the  own- 
er's consent,  for  any  but  a  public  ob- 
ject. Nor  can  the  legislature  authorize 
counties,  cities,  or  towns  to  contract 
for  private  objects,  debts  which  must 
be  paid  by  taxes In  Loan  Asso- 
ciation v.  Topeka,  20  Wall.  655,  bonds 
of  a  city,  issued,  as  appeared  on  their 
face,  pursuant  to  an  act  of  the  legisla- 
ture of  Kansas,  to  a  manufacturing 
corporation  to  aid  it  in  establishing 
shops  in  the  city  for  the  manufacture 
of  iron  bridges,  were  held  by  this  court 
to  be  void,  even  in  the  hands  of  a  pur- 
chaser in  good  faith  and  for  value.  A 
like  decision  was  made  in  Parkersburg 
v.  Brown,  106  U.  S.  487.     The  deci- 


sions in  the  courts  of  the  States  are  to 
the  same  effect.  Allen  v.  Inhabitants 
of  Jay,  60  Me.  124;  Lowell  v.  Boston, 
III  Mass.  454;  Weismer  v.  Vilhge  of 
Douglas,  64  N.  Y.  91  ;  Matter  of  Eureka 
Basin  W.  &  M.  Co.,  96  N.  Y.  42  ;  Bis- 
sell  V.  City  of  Kankakee,  64  111.  249 ; 
English  V.  People,  96  111.  566;  Cen- 
tral Branch  U.  P.  R.R.  Co.  v.  Smith, 
23  Kans.  745.  We  have  been  refer- 
red to  no  opposing  decision.  The 
cases  of  Hackett  v.  Ottawa,  99  U.  S. 
86,  and  Ottawa  v.  National  Bank,  105 
U.  S.  342,  were  decided,  as  the  Chief- 
Justice  pointed  out  in  Ottawa  v.  Carey. 
108  U.  S.  no,  118,  upon  the  ground 
that  the  bonds  in  suit  appeared  on 
their  face  to  have  been  issued  for  mu- 
nicipal purposes,  and  were  therefore 
valid  in  the  hands  of  bona  fide  holders." 
See  Livingston  County  v.  Darlington, 
loi  U.S.  407;  Township  of  Burlington 
V.  Beasley,  94  U.S.  310;  Osborne  v. 
County  of  Adams,  io6  U.  S.  181  ;  Blair 
v.  Cuming  County,  in  U.  S.  363  ; 
Rogers  v.  Burlington,  3  Wall.  654  ; 
Town  of  Quecnsbury  v.  Culver,  19 
Wall.  83  ;  Taylor  v.  Vpsiianti,  105  U. 
S.  60  ;  Middleton  v.  Muliica,  n2  U.  S. 
433- 

'  Citing  2  Com.  Cont.  109. 


6o8  CONSUMMATED    ILLEGAL    ACTS.  §  439 

illegality  of  that  contract  does  not  arise  from  any  moral 
turpitude.  The  property  was  transferred  under  a  contract 
which  was  merely  malum  prohibitum,  and  where  the  city 
was  the  principal  offender.  In  such  a  case  the  party  receiv- 
ing may  be  made  to  refund  to  the  person  from  whom  it 
has  received  property  for  the  unauthorized  purpose,  the 
value  of  that  which  it  has  actually  received."* 

§  439.  Consummated  illegal  acts. — There  is  a  marked  and 
settled  distinction  in  law  between  executory  and  executed 
contracts  of  an  illegal  character.^  It  has  been  laid  down 
by  the  New  York  Court  of  Appeals  as  a  test  that  whether 
a  demand  connected  with  an  illegal  transaction  is  capable 
of  being  enforced  at  law,  depends  upon  whether  the  party 
requires  any  aid  from  the  illegal  transaction  to  establish 
the  case.^  If  the  cause  of  action  is  unconnected  with  the 
illegal  act,  and  is  founded  upon  a  distinct  and  collateral 
consideration,  it  will  not  be  affected  by  the  former  unlaw- 
ful conduct  of  the  parties.^  "  A  new  contract,  founded  on 
a  new  consideration,  although  in  relation  to  property  re- 
specting which  there  had  been  unlawful  transactions  be- 
tween the  parties,  is  not  itself  unlawful."^  The  law,  as  we 
have  seen,  is  settled,  that  a  contract  wicked  in  itself  or  pro- 
hibited by  law,  cannot  be  enforced  in  the  courts.  Chief- 
Justice  Marshall,  commenting  upon  the  subject,  said : 
"  How  far  this  principle  is  to  affect  subsequent  or  collateral 
contracts,  the  direct  and  immediate  consideration  of  which 
is  not  immoral  or  illegal,  is  a  question  of  considerable  in- 
tricacy,   on    which    many  controversies    have    arisen,   and 


'  Parkersburg  v.  Brown,   106  U.  S.  ^  Woodworth  v.  Bennett,  43  N.  Y. 

503,  citing  White  V.  Franklin  Bank,  22  276;    Clements  v.  Yturria,  81    N.  Y. 

Pick.  (Mass.)  181  ;  Mon-ille  v.  Amer-  291  ;  Chitty  on  Cont.  657.    See  Phalen 

ican   Tract    Society,    123   Mass.    129;  v.  Clark,  19  Conn.  421  ;  Northwestern 

Davis  V.  Old  Colony  Railroad  Co.,  131  Ins.  Co.  v.  Elliott,  7  Sawy.  22. 

Mass.  258;  In  re  Cork  and  Youghal  ^Phalen    v.    Clark,    19   Conn.   431; 

Railway  Co.,  L.  R.  4  Ch.  App.  748.  Armstrong  v.  Toler,  11  Wheat.  258. 

*  Merritt  V.  Millard,  4  Keyes  (N.  Y.)  'Armstrong    v.   Toler,    11    Wheat. 

213.  269. 


§  439  CONSUMMATED    ILLEGAL    ACTS.  609 

many  decisions  have  been  made."^  In  Faikney  v.  Rey- 
nous,'  the  plaintiffs  and  one  Richardson,  were  jointly  con- 
cerned in  certain  contracts  prohibited  by  law,  on  which  a 
loss  was  sustained,  the  whole  of  which  was  paid  by  the 
plaintiffs,  and  a  bond  given  to  secure  the  repayment  of 
Richardson's  proportion  of  it.  In  a  suit  on  this  bond  the 
defendant  pleaded  the  statute  prohibiting  the  original 
transaction,  but  the  court  held  on  demurrer  that  the  plain- 
tiff was  entitled  to  recover.  Lord  Mansfield  jrave  his 
opinion  on  the  general  ground,  that  if  one  person  apply  to 
another  to  pay  his  debt,  whether  contracted  on  the  score  of 
usury  or  for  any  other  purpose,  he  is  entitled  to  recover  it 
back  again.  This  is  a  strong  case  to  show  that  a  subse- 
quent contract  not  stipulating  for  a  prohibited  act,  although 
for  money  advanced  in  satisfaction  of  an  unlawful  transac- 
tion, may  be  sustained  in  a  court  of  justice.  In  Bateman 
V.  Fargason  ^  a  bill  was  filed  to  reopen  a  settlement  of  ac- 
counts upon  grounds  of  usury,  undue  influence  and  violated 
confidence,  amounting  to  a  fraudulent  imposition  by  the 
defendant  upon  the  plaintiff.  The  plaintiff  had  executed 
a  deed  of  his  share  of  certain  lands  to  pay  the  alleged  bal- 
ance found  due  the  defendant,  and  had  procured  his  wife 
to  join  in  the  conveyance  for  the  purpose  of  releasing  her 
dower  and  homestead  rights.  The  complainant  alleged  in 
the  bill  that  he  had  procured  this  acquiescence  of  his  wife 
by  coercion,  and  set  forth  in  detail  his  angry  denunciations 
of  her  remonstrances,  and  his  wicked  threats  to  have  the 
defendant,  whom  the  wife  detested,  appointed  guardian  for 
her  children,  and  such  other  like  conduct  as  procured  her 
signature  to  the  deed.  A  demurrer  was  interposed  to  the 
bill  based  upon  these  allegations  of  coercion,  and  the  com- 
plainant's confession  of  fraud,  and  the  maxim  was  invoked 


'  Armstrong    v.    Toler,    1 1    Wheat.        "  4  Burr.  2069.     See  Petrie  v.  Han- 
272.  nay,  3  T.  R.  659. 

'  2  Flippin,  660. 

39 


6lO  CONSUMMATED    ILLEGAL   ACTS.  §  44O 

that  "  he  who  comes  into  equity  must  do  so  with  clean 
hands."  It  was  decided  that  this  maxim  only  applied  to 
the  conduct  of  the  party  in  respect  to  the  particular  trans- 
action under  consideration,  which,  in  this  case,  was  the 
usury  and  fraudulent  and  fictitious  items  in  the  settlement, 
and  that  the  court  would  not  travel  outside  of  the  case  for 
the  purpose  of  examining  the  conduct  of  the  plaintiff  in 
other  matters,  or  questioning  his  general  character  for  fair 
dealing.^  The  rule  does  not  refer  to  general  depravity  ;  it 
must  have  an  immediate  and  necessary  relation  to  the 
equity  in  suit;  it  must  be  depravity  in  a  legal  as  well  as 
moral  sense.^  It  may  be  observed  of  this  case  that  the 
acts  of  the  complainant  in  relation  to  the  coercion  of  his 
wife  were  entirely  immaterial  as  regards  the  merits  of  the 
controversy  with  the  defendant.  To  be  available  as  a 
ground  of  avoiding  the  deed,  the  wife  who  was  the  party 
aggrieved  by  the  duress,  should  become  an  actor. 

§  440.  —  It  may  be  regarded  as  settled,  that  where  a  party 
has  paid  money  to  a  third  person,  for  the  use  of  another, 
which  on  account  of  the  illegality  of  the  transaction  he 
was  not  obliged  to  pay,  such  third  person  cannot  interpose 
the  defense  of  illegality  when  sued  for  the  money.'^  This 
principle  is  based  upon  the  undoubted  right  of  a  person  to 
waive  the  illegality  and  pay  the  money,  and,  when  once 
paid,  either  to  the  other  party  directly,  or  to  a  third  person 
for  his  use,  it  cannot  be  recalled,  and  a  third  party  who  was 
in  no  way  connected  with  the  original  transaction  cannot 
avail  himself  of  a  defense  which  his  principal  waived.*  In 
other  words,  where    the    illegal    object    has    been  accom- 

"r  Citing  Bispham's  Equity,  p.  61.  ^  Tenant  v.  Elliott,  i  Bos.  &  P.  3; 

*  Citing   Deering  v.  Winchelsea,    i  Merritt   v.  Millard,  4    Keyes  (N.  Y.) 

Cox's   Eq.    318;    Nichols   v.    Cabe,    3  208;  Woodworth  v.  Bennett,  43  N.  Y. 

Head  (Tenn.)  92  ;  Sharp  v.  Caldwell,  7  276. 

Humph.  (Tenn.)  415  ;  Mulloy  V.Young,  •*  Woodworth  v.   Bennett,  43  N.  Y. 

-lo   Humph.    (Tenii.)    298;    Kelton   v.  276;  Merritt  v.  Millard,  4  Keyes  (N. 

Millikin,  2  Coldw.  (Tenn.)  410;  Lewis  Y.)  215. 
'.&  Nelson's  Appeal,  67  Pa.  St.  153,  166. 


§441  VOID    AND    VOIDABLE    MARRIAGES.  6 II 

plished,  the  money  or  thing  which  was  the  price  of  it  mav 
be  a  legal  consideration  between  the  parties  for  a  promise 
express  or  implied,  and  the  court  will  not  unravel  the 
transaction  to  discover  its  origin,^  In  Gray  v.  Ilook'  the 
court  said  :  "  The  distinction  between  a  void  and  valid  new 
contract,  in  relation  to  the  subject-matter  of  a  former  ille- 
gal one,  depends  upon  the  fact  whether  the  new  contract 
seeks  to  carry  out  or  enforce  any  of  the  unexecuted  pro- 
visions of  the  former  contract,  or  whether  it  is  based  upon 
a  moral  obligation  growing  out  of  the  execution  of  an 
agreement  which  could  not  be  enforced  bv  law,  and  upon 
the  performance  of  which  the  law  will  raise  no  implied 
promise.  In  the  first  class  of  cases  no  change  in  the  form 
of  the  contract  will  avoid  the  illegality  of  the  first  consid- 
eration ;  while  express  promises  based  upon  the  last  class 
of  considerations' may  be  sustained."^ 

§  441,  Void  and  voidable  marriages. — The  distinction  be- 
tween void  and  voidable  acts  appertains  in  the  rules  gov- 
erning marriages.  A  void  marriage  is  good  to  no  purpose. 
It  may  be  assailed  directly  or  collaterally,  and  its  invalidity 
shown  at  any  time  and  between  any  parties,  either  directlv 
or  collaterally.*  The  distinction  is  well  stated  in  Elliott  v. 
Gurr,^  where  the  court  said  :  "  Civil  disabilities,  such  a3  a 
prior  marriage,  want  of  age,  idiocy,  and  the  like,  make  the 
contract  void  ab  initio,  not  merely  voidable  ;  these  do  not 
dissolve  a  contract  already  made,  but  they  render  the  par- 
ties   incapable    of    contracting   at    all  ;    they    do    not   put 


'  Planters'  Bank  v.  Union  Bank,  16  6th  ed.,  §  105;  Ferlat  v.  Gojon,  HopU. 

Wall.  500;  Ex  parte  Bulmer,  13  Ves.  Ch.  (N.   Y.)  478,  493;   S.  C.  r^.Aau 

Jr.   316.     See   McBlair  v.  Gibbes,    17  Dec.    554;    Gathings   v.    Williams,.  5 

How.  236;   Lestapies  v.  Ingraham,  5  Ired.   (N.  C.)   Law  487;  Piitterson.  v. 

Pa.  St.  71  ;  Woodworth  v.  Bennett,  43  Gaines,  6  How.  592  ;  Fomshill  v.  M'jr-' 

N.  Y.  276.  ray,  i  Bland  (Md.)  479  :  S„C..i8.  Am, 

^  4  N.  Y.  439.  Dec.  344;   Mount   Holly  v.  Ando-wer, 

^  See  Woodworth  v.  Bennett,  43  N.  11   Vt.  226;  Rawdon   v.  Rawxloa.  2S 

Y.  278.  Ala.  565. 

*  1  Bishop's  Marriage  and  Divorce,         ''  2  Phillim.  19. 


6l2  IRREGULARITIES    AND    NULLITIES.  §  442 

asunder  those  who  are  joined  together,  but  they  previously 
hinder  the  junction  ;  and  if  any  persons  under  these  legal 
incapacities  come  together,  it  is  a  meretricious,  and  not  a 
matrimonial  union,  and  therefore  no  sentence  of  avoidance 
is  necessary."  Of  course,  in  the  absence  of  an  absolute  di- 
vorce, no  person  can  remarry  while  the  former  husband  or 
wife  is  alive.^  Such  a  marriage  is  absolutely  void.  In 
Glass  v.  Glass,^  Chief-Justice  Gray,  in  delivering  the  opin- 
ion of  the  court,  said:  "  But  as  he  [the  first  husband]  was 
in  fact  still  living,  and  the  first  marriage  had  not  been  dis- 
solved by  a  decree  of  divorce,  the  respondent  was  in  law 
his  wife,  her  second  marriage  was  unlawful,  and  the  infor- 
mation which  both  parties  to  it  had  of  the  former  marriage, 
and  of  the  circumstances  connected  with  the  absence  of  the 
former  husband,  cannot  estop  either  to  apply  to  the  court 
for  a  decree  of  nullity."^  The  void  marriage  imposes  no 
obligation  upon  either  contracting  party.  Thus,  in  Patter- 
son V.  Gaines,^  Justice  Wayne,  in  delivering  the  opinion  of 
the  United  States  Supreme  Court,  said  :  "A  void  marriage 
imposes  no  legal  restraint  upon  the  party  imposed  upon 
from  contracting  another,  though  prudence  and  delicacy 
do,  until  the  fact  is  so  generally  known  as  not  to  be  a  mat- 
ter of  doubt,  or  until  it  has  been  impeached  in  a  judicial 
proceeding,  wherever  that  may  be  done."^ 

§  442.  Irregularities    and    nullities    distinguished. — An  ir- 
regularity in   the  form   or  manner  of  conducting  a  legal 


'  See  notes  to  Gathings  v.  Williams,  Appleton  v.  Warner,  51  Barb.  (N.  Y.) 

44  Am.  Dec,  54-  270;  Gaines  v.  Relf,  12  How.  473.     If 

-  114  Mass.  566.  either  of  the  parties  at  the  time  of  en- 

^  Citing    Miles    v.   Chilton,    I    Rob.  tering  into  the  marriage  is  7ion  compos 

Eccl.  684 ;  Williamson  v.  Parisien,  i  mentis,  it  is  null  and  void.    See  Foster 

Johns.  Ch.  (N.  Y.)  389 ;   Zule  v.  Zule,  v.  Means,  i   Spoer's  Eq.  (S.  C.)  569 ; 

I  N.  J.  Eq.  96 ;   Kenley  v.  Kenley,  2  S.  C.   42    Am.   Dec.    332 ;   Jenkins   v. 

Yeates  (Pa.)   207 ;    Janes  v.  Janes,    5  Jenkins,  2  Dana   (Ky.)    103 ;   S.  C.  26 

Blackf.  (Lid.)  141 ;  Martin  v.  Martin,  Am.  Dec.  437 ;  Waymire  v.  Jetmore, 

22  Ala.  86.  22  Ohio  St.  271  ;  Christy  v.  Clarke,  45 

■^  6  How.  592.  Barb.  (N.Y.)  529.    See,  especially,  note 

*  See  Reeves  v.  Reeves,  54  111.  332;  to  Gathings  v.Williams,  44  Am.  Dec.  56. 


§442  IRREGULARITIES    AND    NULLITIES.  6 1 


J 


proceedino^  consists  in  a  want  of  adherence  to  some  pre- 
scribed rule  or  form  of  procedure  by  omitting  to  do  some 
act  which  is  necessary  for  the  due  and  orderly  conducting 
of  the  proceeding,  or  by  doing  it  at  an  unreasonable  time 
or  in  an  improper  manner.^  It  is  a  technical  term  for 
every  defect  in  practical  proceedings  or  the  mode  of  con- 
ducting an  action  or  defense  as  distinguishable  from  de- 
fects in  pleading,^  but  is  limited  to  such  informalities  as  do 
not  render  the  act  entirely  invalid  or  void  ab  initio.  The 
word  should  properly  be  restricted  to  acts  wliich,  in  ac- 
cordance with  the  practice  of  the  court,  ought  or  ought 
not  to  be  done.  But  the  definition  of  an  irregularity  or  of 
the  term  "  irregular  process  "  is  in  some  of  the  cases  as 
loose  and  misleading  as  that  applied  to  the  words  void  or 
voidable.  Thus,  it  is  said,  in  Doe  v.  Barter,'^  that  "  some- 
times the  term  'irregular  process'  has  been  defined  to 
mean  process  absolutely  void,  and  not  merely  erroneous 
and  voidable,"^  and  it  is  further  said  with  much  truth  that 
this  term  has  been  applied  to  all  process  not  issued  in  strict 
conformity  with  the  law,  whether  the  defects  appear  upon 
the  face  of  the  process,  or  by  reference  to  extrinsic  facts, 
and  whether  such  defects  render  the  process  absolutely 
void  or  only  voidable.  A  defect  constituting  only  an 
irregularity  is  one  that  does  not  take  away  the  foundation 
or  authority  for  the  proceeding,  and  does  not  apply  to 
its  whole  operation.^  This  is  said  to  distinguish  an  ir- 
regularity from  a  nullity,  and  the  latter  has  been  termed 
"the  highest  degree  of  an  irregularity  in  the  most  extcMisivc 
sense  of  that  term."®     It  may  be  stated  as  a  general  rule. 


•  Bowman  v.  Tallman,  2  Rob.  (N.  '  3  Chit.  Gen.  Prac.  p.  509. 

Y.)  634 ;   S.  C.  19  Abb.  Pr.  (N.  Y.)  86  ;  ^  3  ind.  253. 

Bordeaux  ads.  Treasurers,  3  McCord's  ■*  Citing  Woodcock  v.  Iknnet,  i  Cow. 

(S.  C.)  Law  144  ;  Ex  parte  Gibson,  31  (N.  Y.)  735. 

Cal,  625  ;    Salter  v.  Hilgen,    40   Wis.  '  Arbourn    v.     Anderson,    9    Dowl. 

365;  Downing  v.    Still,  43  Mo.  317;  595. 

Macnamani  on  Nullities,  p.  3.  '  Macnamara  on  Nullities,  p.  3. 


6i4 


JUSTIFICATION. 


§  443 


that  in  doubtful  cases  the  courts  incline  to  treat  the  de- 
fects in  legal  proceedings  as  irregularities  rather  than  as 
nullities.^ 

§  443-  Justification  under  irregular  or  erroneous  process. — 
In  Day  v.  Bach'"^  the  New  York  Court  of  Appeals  advert 
to  the  general  principle  that  void  or  irregular  process  fur- 
nishes no  justification  for  acts  done  under  it,  but  recognize 
the  familiar  limitation  that  if  the  process  is  irregular  only 
it  is  merely  voidable  and  not  void,  and  must  be  vacated 
and  set  aside  before  trespass  can  be  brought.    It  is  believed 


'  The  distinction  further  illustrated. 
— The  distinction  between  a  nullity  and 
an  irregularity  in  court  proceedings  is 
discussed,  in  the  Supreme  Court  of 
Wisconsin,  in  the  case  of  Tallman  v. 
McCarty,  ii  Wis.  406.  The  court 
said  :  "  No  order  which  a  court  is  em- 
powered, under  any  circumstances  in 
the  course  of  a  proceeding,  over  which 
it  has  jurisdiction,  to  make,  can  be 
treated  as  a  nullity  merely  because  it 
was  made  improvidently,  or  in  a  man- 
ner not  warranted  by  law,  or  the  pre- 
vious state  of  the  case.  The  only  ques- 
tion in  such  a  case  is,  had  the  court  or 
tribunal  the  power,  under  any  circum- 
stances, to  make  the  order  or  perform 
the  act.  If  this  be  answered  in  the 
affirmative,  then  its  decision  upon  those 
circumstances  becomes  final  and  con- 
clusive until  reversed  by  a  direct  pro- 
ceeding for  that  purpose."  In  Ex 
parte  Gibson,  31  Cal.  619,  it  is  held 
than  an  error  which  will  render  a  judg- 
ment in  a  criminal  case  voidable  only, 
is  the  want  of  adherence  to  some  pre- 
scribed rule  or  mode  of  procedure,  in 
conducting  the  action  or  defense.  An 
illegality  which  renders  a  judgment  in 
a  criminal  case  void  is  such  an  illegality 
as  is -contrary  to  the  principles  of  law, 
as  distinguished  from  rules  of  pro- 
cedure. '*  An  imprisonment  under  a 
judgment    cannot   be  unlawful   unless 


that  judgment  be  an  absolute  nullity  ; 
and  it  is  not  a  nullity  if  the  court  has 
general  jurisdiction  of  the  subject."  Per 
Marshall,  Ch.  J.,  in  Ex  parte  Watkins, 
3  Peters  202.  See  Ex  parte  Gibson, 
31  Cal.  619  ;  Ex  parte  Shaw,  7  O.  S. 
81  ;  People  v.  Cavanagh,  2  Parker's  Cr. 
R.  (N.  Y.)  660.  A  writer  has  said  that 
it  would  be  irregular  to  sentence  a  man 
to  imprisonment  in  his  absence,  where 
the  absence  was  occasioned  by  the 
order  of  the  court  pronouncing  the  sen- 
tence, while  it  would  be  illegal  to  sen- 
tence him  to  imprisonment  for  a  crime 
which  was  punishable  by  a  pecuniary 
fine  only.  See  Hurd  on  Habeas  Corpus, 
331  ;  Petition  of  Crandall,  34  Wis.  177  ; 
Ex  parte  Gibson,  31  Cal.  625.  So  a 
judgment  of  the  court  will  be  held  void 
if  made  in  excess  of  that  which  by  law 
the  court  had  power  to  make  {Ex  parte 
Lange,  18  Wall.  163;  People  v.  Lis- 
comb,  60  N.  Y.  559;  People  v.  Mc- 
Leod,  I  Hill  [N.  Y.]  377  ;  Ex  parte 
Virginia,  100  U.  S.  339 ;  Crepps  v. 
Durden,  2  Cowp.  640)  ;  or  where  cumu- 
lative sentences  and  penalties  have 
been  illegally  imposed  (People  v.  Lis- 
comb,  60  N.  Y.  559) ;  or  the  prisoner 
is  held  under  an  unconstitutional  statute 
{Ex parte ^\&ho\A,  loo  U.  S.  371);  and 
the  question  may  be  determined  on 
habeas  corpus.  Ibid. 
•-  87  N.  Y.  60. 


§  443  JUSTIFICATION.  615 

to  be  equally  well  settled  that  if  the  process  was  erroneous 
only  it  protects  the  party  for  acts  done  under  it  while  in  force, 
and  he  may  justify  under  it  after  it  has  been  set  aside.  The 
doctrine  of  trespass  by  relation  has  no  application  in  such  a 
case.  The  distinction  between  void  or  irregular  and  errone- 
ous process  is  taken  in  the  early  case  of  Turner  v.  Felgate/ 
which  was  an  action  of  trespass  against  a  party  for  taking 
goods  on  execution.  The  judgment  was  subsequently  re- 
versed for  the  reason  (as  stated  in  the  report)  that  it  had 
been  unduly  obtained,  and  restitution  was  awarded.  The 
court  decided  that  the  action  would  lie,  "  for  by  the  vacat- 
ing of  the  judgment  it  is  as  if  it  had  never  been  ;  and  is  not 
like  a  judgment  reversed  by  error."  The  same  distinction 
was  taken  in  Parsons  v.  Loyd.^  The  plaintiff  in  that  case 
was  arrested  on  a  capias  ad  rcspondcndtivi  tested  in  Trinity 
term  and  returnable  in  Hilary  term,  Michaelmas  term  in- 
tervening. The  writ  was  set  aside  for  irregularity,  and  the 
plaintiff  brought  an  action  for  false  imprisonment  against 
the  party  who  issued  it.  The  latter  justified  under  the  pro- 
cess, but  the  court  decided  that  the  writ  was  no  justification. 
Lord  Chief-Justice  De  Grey  said  :  "  There  is  a  great  differ- 
ence between  erroneous  process  and  irregular  (that  is  to  say, 
void)  process,  the  first  stands  valid  and  good  until  it  be  re- 
versed, the  latter  is  an  absolute  nullity  from  the  beginning; 
the  party  may  justify  under  the  first  until  it  be  reversed; 
but  he  cannot  justify  under  the  latter,  because  it  was  his  own 
fault  that  it  was  irregular  and  void  at  first."  The  })oint  that 
a  party  may  justify  under  lawful  process  set  aside  for  error 
only  was  distinctly  adjudged  in  Prentice  v.  Harrison^  and 
Williams  v.  Smith.''  In  the  latter  case,  Willes,  J.,  said  :  "  It 
by  no  means  follows  that  because  a  writ  or  an  attachment 
is  set  aside,  an  action  for  false  imprisonment  lies  against 
those  who  procured  it  to  be  issued.      If  that  were  so.  this 


I  Lev.  95.  ^  4  Ad.  &  El.  (N.  S.)  852. 

3  Wilson,  345.  ••  14  C.  B.  (N.  S.)  596. 


6l6  JUSTIFICATION.  §  443 

absurd  consequence  would  follow,  that  every  person  con- 
cerned in  enforcing  the  execution  of  a  judgment  would  be 
held  responsible  for  its  correctness.  Where  an  execution 
is  set  aside  on  the  ground  of  an  erroneous  judgment,  the 
plaintiff  or  his  attorney  is  no  more  liable  to  an  action  than 
the  sheriff  who  executes  the  process  is."  The  New  York 
Court  of  Appeals  held  that  this  rule  manifestly  applies 
where  the  process  is  against  property  and  the  alleged  tres- 
pass is  a  seizure  under  it.^  In  Day  v.  Bach,^  Chief-Justice 
Andrews  said:  "The  authorities  seem  to  establish  these 
propositions  :  First,  that  a  void  writ  or  process  furnishes  no 
justification  to  a  party,  and  he  is  liable  to  an  action  for 
what  has  been  done  under  it  at  any  time,  and  it  is  not  neces- 
sary that  it  should  be  set  aside  before  bringing  the  action.-^ 
Second,  if  the  writ  is  irregular  only,  and  not  absolutely 
void,  as  for  instance  where  an  execution  is  issued  on  a  judg- 
ment more  than  a  year  old,  without  a  sci.  fa.,  no  action  lies 
until  it  has  been  set  aside  ;  but  when  set  aside  it  ceases  to 
be  a  protection  for  acts  done  under  it  while  in  force.^  Third, 
if  the  process  was  regularly  issued  in  a  case  where  the  court 
had  jurisdiction,  the  party  may  justify  what  has  been  done 
under  it,  after  it  has  been  set  aside  for  error  in  the  judg- 
ment or  proceeding  ;  and  an  action  for  false  imprisonment, 
in  case  of  arrest,  or  of  trespass  for  property  taken  under  it, 
will  not  lie.  Where,  however,  property  has  been  taken,  the 
party  against  whom  the  writ  issued  is  entitled  to  restitution 
from  the  party  who  sued  out  the  writ,  of  any  property  or 
money  of  the  defendant  in  his  hands."  ^ 


1  Day  V.  Bach,  87  N.  Y.  61.  (N.  Y.)  644;  Clark  v.  Pinney,  6  Cow. 
-  87  N.  Y.  61.  (N.   Y.)   297;    Kissock   v.   Grant,   34 

2  Citing    Brooks   v,    Hodgkinson,   4  Barb.  (N.  Y.)  144;  Williams  v.  Smith, 
H.  &  N.  712.  14  C.  B.  (N.  S.)  596  ;  Reynolds  v.  Har- 

"  Citing  Chapman  v.  Dyett,  1 1  Wend,  ris,  14  Cal.  667.     In  Settlemier  v.  Sul- 

(N.  Y.)  31  ;  Blanchenay  v.  Burt,  4  Ad.  livan,  97  U.  S.  448,  the  United  States 

&  El.  (N.  S.)  707  ;  Riddel  v.  Pakeman,  Supreme  Court,  in  commenting  upon 

2  C,  M.  &  R.  30.  Trullengerv.  Todd,  5  Oregon  39,  where 

'  Citing  Jackson  v.  Cadwell,  i  Cow.  a  judgment  was  held  void  by  reason  of 


§444  "erroneous"  and  "irregular."  617 

§444.  Words  "erroneous"  and  "irregular"  discussed. — 
The  word  "erroneous"  in  court  proceedings  seems  to  be 
applied  to  matters  which  are  contrary  to  law  ;  the  word 
"  irregular  "  to  matters  contrary  to  practice.  Hence  it  is 
said  in  Wolfe  v.  Davis/  that  "  an  erroneous  judgment  is 
one  rendered  according  to  the  course  and  practice  of  the 
courts,  but  contrary  to  law ;  as  where  it  is  for  one  party 
when  it  ought  to  be  for  the  other  ;  or  for  too  little  or  too 
much.  An  irregular  judgment  is  one  contrary  to  the 
course  and  practice  of  the  courts  ;  as  a  judgment  without 
service  of  process."^  The  distinction  may  be  further  illus- 
trated from  Day  v.  Bach,^  a  case  from  which  we  have  already 
quoted  extensively.  It  was  shown  in  that  action  that  a 
warrant  of  attachment  had  been  regularly  issued,  property 
seized  and  sold  under  it,  and  that  the  attachment  had  been 
vacated  upon  affidavits  which  the  court  considered  over- 
came or  explained  the  facts  and  charges  upon  which  the 
process  had  been  granted.  Strictly  speaking  there  was  no 
question  of  irregularity  involved.  The  court  in  the  first 
instance  had  reached  a  wrong  conclusion  upon  contested 
facts  which  the  appellate  tribunal  had  reversed  for  error. 
There  had  resulted  to  the  plaintiff's  assignor,  by  reason  of 
the  attachment  and  sale  thereunder,  a  serious  loss,  which 
the  proceeds  of  the  sale  when  restored  to  him  only  par- 
tially covered.  The  court  held,  however,  that  the  setting 
aside  of  the  attachment,  on  the  ground  stated,  did  not  de- 
prive the  defendants  of  their  justification  ;  and  it  did  not 
cease  to  be  a  protection,  after  it  was  vacated,  for  the  acts 
done  under  it.'* 

a  fatal  defect  in  the  proof  of  service,  ly  for  the  purpose  of  reversing  the  judg- 

say :  "  The  court  having  thus  held  the  ment,  and  thus  purging  its  records." 

judgment  void,  the  only  question  left  for  '  74  N.  C.  599. 

its  determination  was  whether  it  could  *  Followed   in   Koonce  v.  Butler,  84 

entertain  an  appeal  from  it,  as  a  void  N.  C.  223. 

judgment    could    be   disregarded    and  »  87  N.  Y.  61. 

treated  as  a  nullity  whenever  any  right  *  A  plaintiff  sought  to  maintain  the 

was  claimed  under  it,  whether  set  aside  action  upon  the  authority  of  Wehle  v. 

or  not.     It  maintained  the  appeal  sole-  Butler,  61    N.  Y.  245  ;  Lyon  v.  Yates, 


6i8  "erroneous"  and  "irregular."  §444 

The  distinctions  under  discussion  are  lucidly  set  forth  in 
Simpson  v.  Hornbeck,^  by  Parker,  J.,  in  these  words : 
"  Although  a  void  judgment,  or  one  that  is  voidable  for 
irregularity,  will  not,  after  being  set  aside,  justify  the  acts 
of  the  party  done  under  it  before  it  was  set  aside,  this 
principle  I  apprehended  has  never  been  applied  to  a  judg- 
ment merely  erroneous,  and  reversed  for  error  by  a  court 
of  review.  An  irregular  judgment  is  called  voidable  and 
when  set  aside  is  treated  as  though  void  from  the  begin- 
ning ;  for  the  party  himself  is  held  chargeable  with  the  ir- 
regularity, while  a  judgment  pronounced  by  the  court,  al- 
though upon  an  erroneous  view  of  the  law,  and  subject 
therefore  to  be  reversed  by  an  appellate  tribunal,  is  never 
treated  as  void,  but  valid  for  all  purposes  of  protection  to 
the  party  acting  under  it  before  reversal.  The  fact  that  in 
the  one  case  the  party  is  responsible  for  the  irregularity, 
and  in  the  other  whatever  of  error  there  is  in  the  judg- 
ment is  the  error  of  the  court,  seems  to  be  the  ground  of 
the  distinction  between  the  two  ;  and  it  is  manifestly  a  just 


52  Barb.  (N.  Y.)  237 ;  Kerr  v.  Mount,  spect   to  jurisdiction,    still,   it    having 

28  N.  Y.  659  ;  Smith  V.  Shaw,  12  Johns,  been  set  aside  as  irregular,  it  afforded 

(N.  Y.)   257;  Chapman    v.  Dyett,    11  no  justification  afterwards  for  acts  pre- 

Wend.  (N.  Y.)  31  ;  but  the  court  said  viously  done  under  it  to  the  party  in 

that  in  these  cases  the  processes  were  whose  favor  it  was  issued.    If  issued  by 

either  void  or  had  been  set  aside  for  ir-  competent  authority  and  regular  upon 

regularity.    See,  further,  Wehle  v.  Havi-  its  face,  it  might  afford  protection  to 

land,  69  N.  Y.  448  ;  Forrest  v.  Collier,  the  officer  for  his  acts  previously  done 

20  Ala.    175 ;    Campbell  v.  Chamber-  under   it,  but   none   whatever    to   the 

lain,  10   Iowa  337.     In  Kerr  v.  Mount,  party.     As    to    him,    it   was   then   as 

28  N.  Y.  665,  Chief-Justice  Denio  said  :  though  no  process  whatever  had  been 

"  The  process   being  void,   the   party  issued,  and  the  goods  had  been  taken 

who  set  it  in  motion,  and  all  persons  and  detained  by  his  order  without  any 

aiding  and  assisting  him,  were  prima  process.     Chapman  v.  Dyett,  1 1  Wend. 

facie  trespassers."     Johnson,  J.,  said:  (N.  Y.)  31  ;  Smith  v.  Shaw,  12  Johns. 

"  I  incline  to  the  opinion  that  the  at-  (N.  Y.)  257  ;  Hayden  v.  Shed,  1 1  Mass. 

tachment  was  a  nullity,  on  account  of  500 ;  Codrington  v.  Lloyd,  8  Adol.  & 

the  court  out  of  which  it  was  issued  El.  449 ;  Parsons  v.  Lloyd,  2  W.  Bla. 

having   no   authority  to   issue  such  a  845.     The  moment  it  was  set  aside  the 

process.     But  I  have  not  examined  that  party  became  a  trespasser  ab  initio." 
question,  because,  conceding  it  to  have         '  3  Lans.  (N.  Y.)  55. 
been  issued  by  proper  authority  in  re- 


§445 


VOID    IX    SENSE    OF    VOIDABLE. 


6lQ 


and  proper  distinction."  So  in  Clark  v.  Pinney,^  Chief- 
Juscice  Savage  said:  "Trespass  surely  would  not  lie  for 
collecting  the  amount  of  a  judgment  which  was  merely 
erroneous." 

§  445.  Void  used  in  the  sense  of  voidable.— The  most  com- 
mon error  in  the  use  of  the  word  void  is  in  statutes  where 
it  is  constantly  employed  in  a  connection  where  the  courts 
interpret  it  to  mean  voidable.'^  In  Vermont  the  word  void 
in  the  statute  of  1843,  as  applied  to  assignments,  was  held 
to  mean  voidable  at  the  suit  of  creditors.^  Conveyances  to 
defraud  creditors,  though  declared  by  statute  absolutely 
void,  are  in  legal  contemplation  only  voidable.*  The  same 
construction  has  been  placed  upon  the  word  \oid  in  the 
bankrupt  act,^  in  leases,**  in  insurance  policies, "^  in  statutes 
regulating    insolvent    assignments,^    and    against    usury.^ 


'  6  Cow.  (N.  Y.)  300.  See  Prentice 
V.  Harrison,  4  O.  B.  852 ;  Miller  v. 
Adams,  52  N.  Y.  415.  In  Palmer  v. 
Foley,  71  N.  Y.  109,  Folger,  J.,  said  : 
"  Where  a  party  in  good  faith  and  on  a 
fair  presentation  of  the  facts  to  a  court, 
or  to  a  judicial  officer,  procures  a  writ 
or  order  of  injunction,  he  is  not  liable 
in  an  action  for  the  damages  which  the 
injunction  has  caused  to  the  person  en- 
joined. Such  is  the  rule  as  to  any  pro- 
cess or  order  in  the  nature  of  process 
thus  procured.  Daniels  v.  Fielding,  16 
M.  &  \V.  200.  Where  process  sued 
out  by  a  party  is  afterwards  set  aside 
for  error,  the  party  is  not  liable  in  an 
action  for  damages ;  where  it  has  been 
set  aside  for  irregularity,  or  bad  faith 
in  obtaining  it,  he  may  be.  Williams 
V.  Smith,  14  C.  B.  (N.  S.)  596 ;  S.  C.  loS 
Eng.  Com.  L.  R.  594.  See  also  Miller 
V.  Adams,  52  N.  Y.  409  ;  Carl  v.  Ayers, 
53  N.  Y.  14." 

*  "What  is  only  voidable  is  often 
called  void."  Larkin  v.  Saffarans,  15 
Fed.  Rep.  152.     See  §409,  n. 

^  Merrill  v.  Englesby,  28  Vt.  150. 


*  Rappleye  v.  International  Bank, 
93  111.  396;  Lyon  V.  Robbins,  46  III. 
279  ;  Kearney  v.  Vaughan,  50  Mo.  287  ; 
Anderson  v.  Roberts,  18  Johns.  (N.  Y.) 
525  ;  Henriques  v.  Hone,  2  Edw.  Ch. 
(N.  Y.)  120.     See  Chap.  XXVI. 

'  Bromley  v.' Goodrich,  40  Wis.  140. 

'^  Pearsoll  v.  Chapin,  44  Pa.  St.  9; 
Kearney  v.  Vaughan,  50  Mo.  284. 

'  Williams  v.  Albany  City  Ins.  Co., 
19  Mich.  451. 

"  Merrill  v.  Englesby.  28  Vx.  150. 

*  Green  v.  Kemp,  13  Mass.  51  5.  The 
Supreme  Court  of  Missouri  in  Kearney 
V.  Vaughan,  50  Mo.  287,  remark  :  "  It  is 
perhaps  unfortunate  that  we  are  not 
supplied  with  a  term  of  more  precision 
than  the  word  '  void,"  a  word  more 
often  used  to  point  out  what  may  be 
avoided  by  those  interested  in  doing 
so,  than  to  indicate  an  absolute  nullity 
— a  proceeding  or  act  to  be  disregarded 
on  all  occasions.  Of  the  latter  class 
we  might  instance  a  common-law  judg- 
ment rendered  by  a  town  council 

or  a  conveyance  by  a  stranger  to  the 
title,  while  the  real  owner  is  in  posses- 


620  VOID    IN    SENSE    OF    VOIDABLE.  §  445 

Again,  it  is  said  in  Brown  v.  Brown/  that,  since  the  de- 
cision in  State  V.  Richmond,**  the  term  "  void"  is  seldom, 
perhaps,  unless  in  a  very  clear  case,  to  be  regarded  as  im- 
plying a  complete  nullity,  but  is  to  be  taken  in  its  legal 
sense,  subject  to  large  qualifications  in  view  of  all  the  cir- 
cumstances calling  for  its  application,  and  of  the  rights  and 
interests  to  be  affected  in  a  given  case.  So  in  Iowa  a  stat- 
ute provision  that  a  sale  should  be  void  "if  the  owner  of 
land  sold  for  taxes  establishes  fraud  in  the  sale,"  was  con- 
strued to  niean  that  it  might  be  avoided.^  Void,  in  a  policy 
of  insurance,  was  held  to  mean  suspended  till  fulfilment  of 
the  conditions.^  So  it  may  be  said  that  in  many  cases 
where  a  transaction  is  declared  void  in  terms  by  a  rule  of 
the  common  law,  or  even  expressly  by  statute,  where  the 
obvious  intent  of  the  rule  or  statute  is  to  secure  and  pro- 
tect the  rights  of  others,  the  construction  of  law  is  that  it  is 
voidable  so  far  that  it  shall  not  operate  to  defeat  or  impair 
those  rights.  A  deed  of  this  character  is  not  a  dead  letter, 
but  can  be  avoided  by  the  injured  person  only,  and  at  such 
time  and  in  such  manner  as  may  be  necessary  to  preserve 
and  secure  those  rights.  In  other  respects,  as  we  have  seen, 
it  has  its  natural  effects.^  It  was  argued  in  Denn  ex  dem. 
Inskeep  v.  Lecony  "^  that  void  implied  an  act  of  no  effect  at 
all  ;  a  nullity  ab  initio.  The  court  said,  however,  that  this 
was  a  mistake,  and  that  when  the  term  was  used  in  refer- 


sion  under  a  record  title.     But  many  And  so  no  such  deeds  are  called  void 

things  are  called  void  which  are  not  in  favor  of  <J<?«(7_/ffl'^?  purchasers."     See 

absolutely  so,  and,  as  to  mankind  gener-  Anderson  v.  Roberts,  18  Johns.  (N.  Y.) 

ally,  are  treated   as  valid.     They  can  515. 

only  be  called  relatively  void.     For  in-         ^  50  N.  H.  552. 

stance  conveyances,  assignments,  etc.,         "  26  N.  H.  235. 

in  fraud  of  creditors,  are  declared  by        '  Van  Shaack  v.  Robbins,  36  Iowa 

the  statute  to  be  void  as  to  such  credit-  201. 

ors,  and  yet  they  become  perfectly  good         •*  Williams  v.  Albany  City  Ins.  Co., 

unless  attacked  by  such  creditors  ;  and  19  Mich.  451. 

if  they  shall  fail  to  attack  them  for  the         '  See  Wildes  v.  Vanvoorhis,  15  Gray 

period  fixed  by  the  statute  of  limita-  (Mass.)  139,  143.     See  Chap.  XXVI. 

tions,   they   become    absolutely   valid.         *  i  N.J.  L.  112. 


§  445  VOID    IN    SENSE    OF    VOIDABLE.  621 

ence  to  the  solemn  judgments  and  acts  of  the  superior 
courts,  it  meant  no  more  than  voidable.  The  judgment  or 
proceeding  may  be  avoided,  but,  until  this  is  done  in  the 
direct  and  regular  course  of  revision,  it  stands  and  is  availa- 
ble, and  may  be  justified  under  as  the  solemn  act  of  the 
court.  This  the  court  said  was  reasonable,  or  it  would  fol- 
low that  inferior  courts  might  decide  upon  the  proceed- 
ings of  the  superior  courts  by  declaring  them  void,  and  the 
superior  court,  by  examining  such  questions  incidentally  or 
collaterally,  deprive  the  party  of  his  more  formal  and 
orderly  redress.  When  a  contract  stipulates  that  on  the 
happening  of  a  certain  event  it  shall  be  void,  the  construc- 
tion put  upon  it  by  the  courts  generally  is,  that  it  may  on 
this  event  be  rescinded  by  the  party  injured  thereby.  Thus 
a  proviso,  that  in  case  the  vendor  of  an  estate  cannot  de- 
duce a  good  title,  or  the  purchaser  shall  not  pay  the  money 
at  the  appointed  day,  the  contract  shall  l)e  void,  has  been 
held  to  mean  that  the  purchaser  in  the  former  case,  and  the 
vendor  in  the  latter,  may  avoid  the  contract,  and  not  that 
the  contract  is  utterly  void.^  The  same  rule  obtains  at  law.* 
But  when  it  is  sought  to  avoid  a  contract  if  there  be  a  mode 
of  rescission  in  terms  provided  it  must  be  rescinded  in  that 
vvay.^  An  assignment,  which  is  void  in  law  as  an  act  of 
bankruptcy,  will  not  give  rise  to  a  forfeiture  under  a  clause 
of  re-entry  on  the  lessee's  assigning  without  the  license  of 
the  lessor."  And  a  proviso  that  upon  non-payment  of  rent, 
etc.,  the  lease  shall  become  utterly  void,  or  similar  words, 
only  means  that  it  may  be  made  so  by  some  act  of  the  lessor 
showintr  an  intention  to  avoid  the  lease '^  and  the  lessee  can- 


'  Roberts  v.  Wyatt,  2  Taunt.  268;        ••  Doe  d.  Lloyd  v.  Powdl,  5  Rarn.  & 

Doe  d.  Nash  v.  Birch,  i  M.  &  W.  402 ;  C.  308. 
Hyde  v.  Watts,  12  M.  &  W.  254.  '  Hartshorne  v.  Watson.  4  Bing.  N. 

2  Canfield  v.  Westcott.  5  Cowen  (N.  C.  178;  Roberts  v.  Davey,  4  Bam.  & 

Y.)  270;  Mancius  v.  Serj?eant,  lb.  271,  Acl.  664;  Pennington  v.  Cardale.  3  H. 

note;  Church  v.  Ayers,  lb.  272,  note.  &  N.  656;  liaylis  v.  Lc  Gros.  4  C.  B. 

^  McKay  V.  Carrington,  i  McLean  50.  (N.  S.)  537. 


622  "BECOME    VOID  "    AND    "DETERMINED."  §44^ 

not  elect  to  make  the  lease  void.^  In  Ewell  v.  Daggs,^ 
Matthews,  J.,  said  :  "  It  is  quite  true  that  the  usury  statute 
referred  to  declares  the  contract  of  loan,  so  far  as  the  whole 
interest  is  concerned,  to  be  '  void  and  of  no  effect.'  But 
these  words  are  often  used  in  statutes  and  legal  documents, 
such  as  deeds,  leases,  bonds,  mortgages,  and  others,  in  the 
sense  of  voidable  merely,  that  is,  capable  of  being  avoided, 
and  not  as  meaning  that  the  act  or  transaction  is  absolutely 
a  nullity,  as  if  it  never  had  existed,  incapable  of  giving  rise 
to  any  rights  or  obligations  under  any  circumstances.  Thus 
we  speak  of  conveyances  void  as  to  creditors,  meaning  that 
creditors  may  avoid  them,  but  not  others.  Leases  which 
contain  a  forfeiture  of  lessee's  estate  for  non-payment  of 
rent,  or  breach  of  other  condition,  declare  that  on  the  hap- 
pening of  the  contingency  the  demise  shall  thereupon  be- 
come null  and  void,  meaning  that  the  forfeiture  may  be 
enforced  by  re-entry,  at  the  option  of  the  lessor.  It  is 
sometimes  said  that  a  deed  obtained  by  fraud  is  void,  mean- 
ing that  the  party  defrauded  may,  at  his  election,  treat  it  as 
void. 

§  446.  Terms  *'  become  void "  and  *'  determined  "  distin- 
guished.— This  distinction  is  discussed  in  Sharp  v.  Curds.^ 
In  that  case  the  validity  of  a  grant  which  had  been  issued 
after  a  caveat  against  the  survey  had  been  filed,  was  in  con- 
troversy. The  statute  provided  that  no  grant  should  issue 
"  until  such  caveat  shall  be  dismissed,  decided,  or  deter- 
mined," and  that  a  grant  issued  contrary  to  the  provisions 
of  the  statute  should  be  held  and  taken  as  fraudulent. 
The  statute  also  required  the  plaintiff  in  the  caveat  to  de- 
liver a  certified  copy  of  it  to  the  clerk  of  the  court  in  which 
he  intended  to  prosecute  it,  within  fifteen  days  after  it  was 
filed  with  the  reorister,  and  declared  that  otherwise  the 
caveat    should    become    void.      A    certified   copy    of    the 


■  Rede  v.  Farr,  6  M.  &  S.  121  ;  Doe  -  loS  U.  S.  148. 

d.  Bryan  v.  Bancks,  4  Barn.  &  Aid.  401.  H  Bibb.  (Ky.)  54S. 


§  44^^^  VOID    OR    VOIDABLE    IXSTRU.MENTS.  623 

caveat  was  not  so  filed.  The  court  said  :  "  The  caveat  then 
having  become  void,  had  by  operation  of  law  been  ended 
or  determined  before  the  grant  issued.  We  do  not  mean 
to  say  that  '  to  become  void '  and  '  to  be  determined '  are 
convertible  phrases.  The  former,  however,  differs  from 
the  latter  only  as  a  species  differs  from  its  genus,  and  must 
therefore  be  included  in  it ;  for  to  say  that  a  thing  '  has 
become  void,'  necessarily  implies  that  it  has  in  effect  been 
terminated  or  brought  to  an  end  ;  but  the  expression  ap- 
plies only  to  its  end  or  termination  in  one  specific  mode, 
whereas  to  say  that  a  thing  '  has  been  determined,'  though 
it  clearly  imports  simply  that  the  thing  has  been  terminated 
or  brought  to  an  end,  yet  the  expression  is  generic  in  its 
nature,  and  comprehends  every  mode  of  terminating  or 
bringing  a  thing  to  an  end." 

§  446^-.  Void  or  voidable  negotiable  instruments. — Some 
important  principles  may  be  briefly  adverted  to  with  regard 
to  the  liability  of  parties  to,  or  purchasers  and  sellers  of, 
void  negotiable  instruments  or  securities  or  voidable  instru- 
ments or  securities  which  have  been  adjudged  void.  Par- 
tially upon  the  theory  that  an  indorsement  is,  in  addition 
to  the  conditional  undertaking  to  pay,  an  implied  warranty 
of  the  genuineness  of  the  instrument,  it  has  been  held 
that  demand  and  notice  is  not  necessary  to  bind  the  in- 
dorser  of  a  note  which  was  absolutely  void  at  its  inception.' 
The  indorsement  is,  generally  speaking,  a  separate  and 
independent  contract.  In  Broun  v.  Hull,^  Staples,  J., 
said:  "As  a  new  and  independent  contract,  it  only  takes 
effect  from  the  time  it  is  made,  and  must  be  determined  by 
the  laws  then  in  force,  and  the  circumstances  then  exist- 
ing."^    The  contract  of  the  indorser  is  so  entirely  distinct 

'  Chandler    v.    Mason,    2    Vt.    193;  647;  Cundy  v.  Marriott,  i  B.  &  Adol. 

Turnbull   v.   Bovvyer,  40   N.  Y.  456;  696;    Bi'.Igerry   v.    Branch,    19   Gratt. 

Thrall  v.  Newell,  19  Vt.  202.  (\'a.)  418  ;  Evans  v.  Gee,  11  Pet.  80; 

-  33  Gratt.  (Va.)  30.  Hill  v.  Lewis,  i  Salk.  132. 

»  See  Ingalls  v.  Lee,  9  Barb.  (N.  Y.) 


624  VOID    OR    VOIDABLE    INSTRUMENTS.  §  446a 

and  independent  from  that  of  the  maker  that  at  common 
law  a  separate  action  against  each  was  necessary.^  As  a 
general  rule  where  a  note  is  void  between  maker  and  payee 
by  reason  of  an  illegal  consideration,  no  demand  or  notice 
is  necessary  to  hold  the  indorser ;  the  prevailing  rule  being 
that  when  the  principal  party  is  not  bound  the  indorser  is 
liable  without  demand  or  notice.^ 

Thus  in  Copp  v.  McDugall,"'  in  which  case  a  note  was 
adjudged  void  for  usury  between  maker  and  payee,  and 
the  holder  had  been  defeated  in  a  suit  against  the  maker 
for  that  reason,  the  endorser  who  had  received  no  notice 
was  held  bound.  Sewall,  J.,  said:  "When  the  promise  or 
acceptance  is  void,  as  it  is  in  a  case  of  usury  between  the 
drawer  and  acceptor,  if  he  will  resort  to  that  defense  against 
his  promise  the  contract  becomes  as  it  respects  the  indorser 
a  draft  accepted  without  funds, — that  is,  in  the  case  of  a 
promissory  note."  So  in  New  York  where  the  holder  of  a 
note  transferred  it  without  indorsement  and  it  turned  out 
to  be  void  for  usury  as  between  the  original  parties.  Corn- 
stock,  J.,  said  :  "  In  this  case,  the  defendant  held  a  promis- 
sory note  which  was  void  because  he  had  himself  taken  it  in 
violation  of  the  statutes  of  usury.  When  he  sold  the  note 
to  the  plaintiffs,  and  received  the  cash  therefor,  by  that 
very  act  he  affirmed,  in  judgment  of  law,  that  the  instru- 
ment was  untainted,  so  far  at  least  as  he  had  been  connected 
with  its  origin."*  The  same  doctrine  has  been  applied  to 
a  bond  and  mortgage  adjudged  void  for  usury.^  So  a  cer- 
tificate of  deposit  though  void  as  between  the  original 
parties  because  constituting  a  transaction    between    alien 


'  Patterson  v.  Todd,  18  Pa.  St.  426;  (N.  Y.)  106;  Littauer  v.  Goldman,  9 

Broun  v.  Hull,  33  Gratt.  (Va.)  29.  Hun  (N.  Y.)  232  ;  overruled  in  72  N.  Y. 

^  Perkins  V.White,  12  Cent.  L.J.  263.  506;    Challiss  v.    McCrum,    22    Kan, 

^9  Mass.    I,   6.     See    Chandler  v.  157;   Giffert   v.   West,   33   Wis,  618; 

Mason,  2  Vt,  193.  Hurd  v.  Hall,  12  Wis,  112  ;    Costigan 

*  Delaware  Bank  v.  Jarvis,  20  N,  Y,  v.  Hawkins,   22  Wis.    81 ;  Lawton  v. 

229.     See   Webb   v,   Odell,  49  N,  Y.  Howe,  14  Wis.  241, 

583  ;  Fake  v.  Smith,  7  Abb,  Pr,  N.  S,  '  Ross  v.  Terry,  63  N,  Y.  613, 


§  446*^  VOID    OR    VOIDABLE    INSTRUMENTS.  625 

enemies  may  yet  bind  the  assignor.^  The  courts  of  New 
York  have  decided  that  the  indorser  of  a  forged  check  can 
be  held  liable  without  demand  or  notice  ;  ^  and  it  has  been 
said  by  a  distinguished  writer,^  that  the  doctrine  "  would 
extend  to  any  case  in  which  there  was  no  legal  principal 
bound,  as  where  the  maker  or  acceptor  was  an  infant,  mar- 
ried woman,  or  lunatic,*  or  was  a  fictitious  person,  the  in- 
dorser knowing  it."  ^  The  bill  or  note  not  being  a  valid 
binding  obligation  the  transferrer  is  held  because  the  in- 
strument is  not  what  it  purported  or  was  held  out  to  be. 
"  It  is  not  a  question  of  warranty,  but  whether  the  defend- 
ant has  not  delivered  something  which,  though  resembling 
the  article  contracted  to  be  sold,  is  of  no  value."  ^ 

As  orathered  from  the  authorities  the  recoverv  ag^ainst 
the  indorser  in  this  class  of  cases  is  founded  partly  upon 
the  theory  of  warranty  and  partly  upon  the  idea  of  failure 
of  consideration  and  mistake  of  fact.  Proof  of  knowledge 
on  the  part  of  the  indorser  or  drawer  of  the  infirmity  ren- 
dering the  note  void  is  regarded  in  some  of  the  cases  as 
necessary  to  bind  the  indorser  in  the  absence  of  demand 
or  notice."  In  Littauer  v.  Goldman,**  in  the  New  York 
Court  of  Appeals,  it  appeared  that  the  holder  of  a  promis- 
sory note  tainted  with  usury  had  transferred  the  same  to 
the   plaintiff  for   valuable  consideration,    but   without   in- 


'  Morrison  v.  Lovell,  4  West  Va.  350.  v.  Van  Deusen,  37  N.  Y.  4S7  ;   Hussey 

»  Turnbull  v.  Bowyer,  40  N,  Y.  456.  v.  Sibley,  66  Me.  193. 
See  Whitney  V  .  National  Bank  of  Pots-         '■  Young  v.   Cole,  3  Bing.  N.  C.  730. 

dam,  45  N.  Y.  305  ;  Bell  v.  Dagg,  60  See  Littauer  v.  Goldman,  9  Hun  (N. 

N.  Y.  530.  Y.)  234  ;  reversed,  72  N.  Y.  506  ;  Bell  v. 

3  Daniel  on  Negotiable  Instruments,  Dagg,  60  N.  Y.  530  ;  Gompertz  v.  Bart- 

§  1 1 13.  lett,  2  El.  &.  B.  854  ;  Ross  v.  Terry.  63 

*  See  Burrill  V.  Smith,  7  Pick.  (^Lass.)  N.  Y.   614;    Hurd   v.    Hall,    12    Wis. 

291;     I  Parsons   on   Notes  and   Bills,  112. 
445.  ■  Wyman  v.  Adams,  1 2  Cush.  (Mass.) 

^  See  Farmers'  Bank  v.    Vanmeter,  210.     See  i  Parsons  N.  &  B.  144,  note; 

4  Rand.  (Va.)  553 ;    i  Parsons  N.  &  B,  Leach  r.  Hewitt,  4  Taunt.  731  ;  Carter 

460;   Lobdell  V.  Baker,  3  Mete.  (Mass.)  v.  Flower,  16  M.  &  W.  747  ;  Farmers' 

472;   Thrall   v.    Newell,    19   Vt.   202;  Bank  v.  Vanmeter.  4  Rand.  (Va.)  561. 
Giffert  v.  West,  37  Wis.  115;  Baldwin         '  72  N.  Y.  506. 
40 


626  DEFECTIVE    PUBLIC    SECURITIES,  §  446/; 

dorsement  or  any  direct  representation  as  to  its  inception 
or  legality.  The  holder  had  no  knowledge  of  the  usury  at 
the  time  of  the  transfer,  and  was  in  no  way  a  party  to  it. 
The  court  reviewed  the  authorities,  and  held  that  a  scienter 
was  essential  to  establish  an  implied  warranty,  and  that 
where  the  article  sold  was  affected  with  some  latent  defect 
of  which  the  vendor  w^as  ignorant  the  doctrine  of  caveat 
e77tptor  applied.  It  is  beyond  the  scope  of  this  treatise  to 
follow  the  criticisms  made  upon  this  case.  The  rule  that 
the  indorser  warrants  the  validity  of  the  instrument  has 
been  recently  considered  in  the  New  York  Court  of  Ap- 
peals in  the  case  of  an  accommodation  indorser.  The 
court  decided  that  the  rule  did  not  apply  to  an  accom- 
modation indorser  who  received  no  part  of  the  considera- 
tion and  was  therefore  under  no  legal  or  moral  obligation 
to  refund  on  the  ground  of  failure  of  consideration.^ 

§  446^.  Defective  public  securities. — This  doctrine  is  not 
uniformly  extended  to  public  securities.^  In  Otis  v.  Cul- 
lum,'^  in  which  case  bonds  had  been  sold  which  were  sub- 
sequently adjudged  invalid,  Mr.  Justice  Swayne  said : 
"  Such  securities  throng  the  channels  of  commerce,  which 
they  are  made  to  seek,  and  where  they  find  their  market. 
They  pass  from  hand  to  hand  like  bank  notes.  The  seller 
is  liable  ex  delicto  for  bad  faith  ;  and  ex  cojitractii  there  is 
an  implied  warranty  on  his  part  that  they  belong  to  him, 
and  that  they  are  not  forgeries.  Where  there  is  no  ex- 
press stipulation  there  is  no  liability  beyond  this.  If  the 
buyer  desires  special  protection  he  must  take  a  guaranty. 
He  can  dictate  its  terms,  and  refuse  to  buy  unless  it  be 
given.  If  not  taken  he  cannot  occupy  the  vantage  ground 
upon  which  it  would  have  placed  him."*  These  cases  are 
distinguished  in  Rogers  v.  Walsh,*  in  which  latter  case  the 


1  Susquehanna  Valley  Bank  v.  Loom-         ^  92  U.  S.  449. 
^is,  85  N.  Y.  207.  "  See  Orleans  v.  Piatt,  99  U.  S.  679. 

'  Lambert  v.  Heath,  1 5  M.  &  W.  486. '       ^12  Neb.  28,  30. 


§  4-465  DEFECTIVE    PUBLIC    SECURITIES.  627 

vendee  was  held  to  be  entitled  to  recover  back  from  the 
vendor  the  money  paid  for  what  purported  to  be  warrants 
of  York  County,  but  which  had  been  issued  by  the  county 
commissioners  without  authority  of  law  and  were  void. 
Lake,  J.,  said:  "The  principle  that  should  govern  here 
was  applied  in  the  case  of  Young  v.  Cole.'  ....  The 
sale  there  considered  was  of  certain  Guatemala  bonds,  which 
because  unstamped,  had  been  repudiated  by  the  government 
of  that  State,  and  were  therefore  valueless,  of  which  facts 
both  seller  and  purchaser  were  at  the  time  ignorant,  and  it 
was  held  that  the  defendant  should  restore  the  price  he  had 
received.  In  commenting  upon  the  facts  of  the  case,  Tin- 
dal,  C.  J.,  said  that  the  contract  was  for  real  Guatemala 
bonds,  and  the  question  was  not  one  of  warranty,  but 
whether  the  defendant  had  not  delivered  something  which, 
though  resembling  the  article  contracted  to  be  sold,  was  of 
no  value."  ^ 

'  3  Bing.  N.  C.  724;  S.  C.  32  Eng.  Howell  v.  Wilson,  2  Blackf.  (Ind.)  419; 

Com.  Law,  302.  Turner  v.  Tuttle,  i  Root  (Conn.)  350; 

-  See  generally  Thrall  v.  Newell,  19  Bank  of  Chillicothe  v.  Dodge,  8  Barb. 

Vt.  203  ;  Terry  V.  Bissell,  26  Conn.  40 ;  (N.   Y.)    233;    Boyd    v.    Anderson,    i 

Flynn  v.  Allen,  57  Pa.  St.  482 ;  Lob-  Overton  (Tenn.)  446 ;  Hurd  v.  Hall,  12 

dell  V.  Baker,  3  Met.  (Mass.)  469  ;  Ellis  Wis.  136  ;  City  of  Plattsmouth  v.  Fitz- 

V.  Grooms,  i  Stewart  (Ala.)  47 ;  Car-  gerald,   10  Neb.  401 ;   /Etna  Life  Ins. 

din  V.  Boyd,   11   Heisk.  (Tenn.)   176;  Co.  v.  Middleport,  124  U.  S.  545. 


CHAPTER   II. 


VOIDABLE      ACTS. 


§  447.  Voidable  acts. 
4.47a.  Fraudulent  contracts  and  de- 
vices. 
447^5.  Fraud   arising   from   intention 
not  to  pay. 

448.  Titles  voidable  for  fraud  and  for 

infancy  distinguished. 

449.  Acts  of  infants  and  of  lunatics 

compared. 

450.  Tests  of  infants'  acts. 

451.  Classes  of  infants' acts. 

452.  Contracts  of  infants  usually  void- 

able— Illustrations. 

453.  Judgments  against  infants. 

454.  Infant's  power  of  attorney. 

455.  Other  examples  of  void  acts. 

456.  Infant's  voluntary  assignment. 

457.  Liability  for  torts. 

458.  Infants'  fraud  will  not  establish 

contract  liability. 

459.  Acts  binding  upon  infants. 

460.  Contracts  of  lunatics. 

461.  What  incapacity  must  be  shown. 

462.  Mere  weakness  of  mind  insuffi- 

cient. 

463.  Lunatic's  contracts  for  necessa- 

ries. 

464.  Acts  of  lunatic  after  inquisition 

void. 


i  465.  Judgment  against  lunatics  under 
guardianship. 

466.  Void  and  voidable  acts  of  luna- 

tics. 

467.  Lunatic's  deed. 

468.  Executory    contracts    of    luna- 

tics. 

469.  Statutory  proceedings  affecting 

property  of  infants  and  of  luna- 
tics. 

470.  Voidable   purchases  by  parties 

occupying  positions  of  trust. 

471.  Voidable   acts  of  executors  or 

trustees. 

472.  Agent's  voidable  purchase. 

473.  Purchase  by  pledgee. 

474.  Purchase  by  attorney  of  client's 

property. 

475.  Transactions    between     parent 

and  child. 

476.  Other    phases — Legal  effect  of 

drunkenness. 

477.  Delirium  tremens  as  distinguish- 

ed from  drunken  madness. 

478.  Duress  ;  its  nature  and  classes. 

479.  Duress  of  goods. 

480.  Involuntary  payments. 

481.  Undue  influence. 


§  447.  Voidable  acts. — We  shall  devote  our  limited  space 
more  especially  to  the  consideration  of  the  various  kinds  of 
voidable  acts,  the  distinctions  between  the  different  classes 
of  such  acts,  and  the  principles  controlling  their  ratification 
or  avoidance.  The  field  is  a  wide  one,  but  the  discussion 
will  be  restricted  to  suggestions  concerning  the  prominent 
features  of  the  subject. 


§§  4-47^'  447^  FRAUDULENT    DEVICES.  629 

§  447<7.  Fraudulent  contracts  and  devices. — "  Fraud,  as  I 
think,"  said  Blackburn,  J.,  "renders  any  transaction  void- 
able at  the  election  of  the  party  defrauded ;  and  if,  when  it 
is  avoided,  nothing  has  occurred  to  alter  the  position  of 
affairs,  the  rights  and  remedies  of  the  parties  are  the  same 
as  if  it  had  been  void  from  the  beginning ;  but  if  any  alter- 
ation has  taken  place,  their  rights  and  remedies  are  subject 
to  the  effect  of  that  alteration."^  The  fraud  which  renders 
a  sale  between  parties  sui  juris  voidable,  except  as  to  an 
innocent  purchaser,  may  embrace  any  of  the  infinite  phases 
of  deceit.-  The  fraudulent  devices  may  consist  in  misrep- 
resentation of  pecuniary  standing;^  concealing  the  pend- 
ency of  a  suit  involving  more  than  the  value  of  all  the 
buyer's  property;''  exhibiting  false  recommendations;^ 
giving  worthless  securities  for  the  price  of  the  goods  ;°  pay- 
ment in  fictitious  bills,'''  or  counterfeit  money,**  or  stolen 
property.^  Nor  is  it  necessary,  in  order  to  avoid  the  sale, 
that  the  false  representation  should  have  been  of  such  a 
character  as  would  have  sustained  an  indictment  for  false 
pretences.^*^ 

§  447^.  Fraud  arising  from  intention  not  to  pay. — There  are 
of  course  in  addition  the  familiar  cases  where  the  vendee 
resorted  to  no  badge  of  fraud  and  was  guilty  of  no  misrep- 


•  The  Queen  v.  Saddlers'  Company,  '  See  Titcomb  v.  Wood,  38  Me.  563. 

10  H.  L.  Cas.  420.    See  Clarke  V.  Dick-  Compare  Lee  v.  Portwood,  41   Miss. 

son,  I  El.  B.  &  E.  148;  Feret  v.  Hill,  109;    Arendale   v.    Morgan,   5    Sneed 

15  C.  B.  207.  (Tenn.)  703.     The  fact  that  the  trans- 

"  See  7  Southern  L.  R.  N.  S.  562.  action  invoh'cs  criminal  false  pretences 

^  Luckey  v.  Roberts,  25  Conn.  486.  does  not  affect  the  title  of  an  innocent 

■»  Devoe  V.  Brandt,  53  N.  Y.  462.  purchaser.      Cochran    v.    Stewart,    21 

^  Mowrey  v.  Walsh,  8  Cow,  (N.  Y.)  Minn.  435  ;  Williams  v.  Given.  6  Gratt. 

238.  (Va.)    268    (reviewing  the  New  York 

®  Manning  V.  Albee,  il  Allen  (Mass.)  cases).     Otherwise  by  statute  in  Eng- 

520.  land.     See  Moyce  V.  Newington,  L.  R. 

'  White   V.    Garden,   10   C.  B.  919;  4  Q.  B.  Div.  32  ;  Lindsay  v.  Cundy,  L. 

Cochran  v.  Stewart,  21  Minn. 435.  R.  i  Q.  B.  Div.   357;  Keyscr  v.  Har- 

"  Arnett  v.  Cloudas,  4  Dana   (Ky.)  beck,  3  Duer  (N.  Y.)  389. 

300 ;  Williams  v.  Given,  6  Gratt.  (Va.)  '"  Nichols  v.  Michael.  23  N.  Y.  264. 

268;  Green  v.  Humphry,  50  Pa.  St.  212. 


630  INTENTION    NOT    TO    PAY.  §  447^ 

resentation,  but  purchased  the  goods  with  the  preconceived 
design  not  to  pay  for  them.  Sales  of  this  character  where 
such  an  intent  has  been  found  to  exist  are  voidable.^  This 
doctrine  is  perhaps  difficult  of  application,  and  the  intention 
is  a  vague  and  intangible  thing  to  define  and  determine, 
but  the  principle,  nevertheless,  has  a  firm  foundation  in  our 
law.  It  is  calculated  to  encourage  and  enforce  candor  and 
fair  dealing  among  men  and  especially  to  suppress  the 
tendency  of  a  debtor,  having  knowledge  of  his  insolvency, 
to  purchase  goods  upon  credit  for  the  express  purpose  of 
putting  their  proceeds  into  the  hands  of  favored  creditors 
with  a  view  of  then  suspending  payment.  A  recent  illus- 
tration of  the  application  of  this  rule  is  Donaldson  v.  Far- 
welP  in  the  United  States  Supreme  Court,  where  Davis,  J., 
said  :  "  The  doctrine  is  now  established  by  a  preponderance 
of  authority,  that  a  party  not  intending  to  pay,  who,  as  in 
this  instance,  induces  the  owner  to  sell  him  goods  on  credit 
by  fraudulently  concealing  his  insolvency  and  his  intent 
not  to  pay  for  them,  is  guilty  of  a  fraud  which  entitles  the 


'  See  Benj.  on  Sales,  §  440,  note  e  ;  Nichols  v.  Pinner,  18  N.  Y.  295  ;  Hall 

Donaldson  v.  Farwell,  93  U.  S.  633.  v.  Naylor,  18  N.  Y,  588,  589;  Nichols 

The  leading  authorities  are  arranged  v.  Michael,  23  N.  Y.  264 ;  Hennequin 

by  States  in  7  Southern  Law  Review  v.  Naylor,  24  N.  Y.   139  ;    Paddon  v. 

N.  S.  563.     Massachusetts — Rowley  v.  Taylor,  44  N.  Y.  371.     As  to  subse- 

Bigelow,  12  Pick.  307,  311,  312;  Wig-  quently  conceived    determination,   see 

gin  V.  Day,  9  Gray  97  ;  Dow  v.  San-  Dows  v.  Rush,  28  Barb.  (N.  Y.)  157  ; 

born,  3  Allen  181, 182  ;  Kline  v.  Baker,  Mears  v.  Waples,  3  Houst.  (Del.)  581  ; 

99    Mass.    253,    255.      Connecticut —  s.  C.  4  Ibid.  62  ;  Powell  v.  Bradlee,  9 

Thompson  v.  Rose,  16  Conn.  71,  81.  Gill  &  J.  (Md.)  220,  248,  278 ;  Wood 

Vermont — Redington   v.    Roberts,   25  v.  Yeatman,   15    B.  Mon.   (Ky.)   271; 

Vt.  694,  695.    New  Hampshire — Stew-  Bidault  v.  Wales,  19  Mo.  36  ;  S.  C.  20 

art  V.  Emerson,  52  N.  H.  301  (leading  Mo.  546;  Fox  v.  Webster,  46  Mo.  181 ; 

case).     New  York — King  v.  Phillips,  8  Rice  v.  Cutler,  17  Wis.  351  ;  Parker  v. 

Bosw.    603 ;    Ash   v.    Putnam,    i    Hill  Byrnes,  i  Lowell  539,   542  ;    Biggs  v. 

302;   Cary   v.    Hotailing,   i   Hill   311;  Barry,    2   Curtis    262.      But    compare 

Bigelow  V.  Heaton,  6  Hill  43 ;  Mitchell  Smith  v.  Smith,  21  Pa.  St.  367  ;  Back- 

V.  Worden,  20  Barb.  253  ;  Buckley  v.  entoss   v.    Speicher,    31   Pa.   St.    324  ; 

Artcher,    21    Barb.    585  ;     Barnard   v.  Wilson  v.  White,  80  N.  C.  280. 

Campbell,  65  Barb.  386,  affirmed    55  "  93  U.  S.  633. 
N.  Y.  456,   reaffirmed    58  N.  Y.  73  ; 


§448 


FRAUD    AND    INFANCY. 


6;  I 


vendor,  if  no  innocent  tliird  party  has  acquired  an  interest 
in  them,  to  disaffirm  the  contract  and  recover  the  o-oods." 
The  vendor  is  entitled  to  rely  upon  the  presence  on  the 
part  of  the  vendee  of  an  intention  to  pay  for  the  goods  ; 
the  undisclosed  non-existence  of  this  intention  is  regarded 
as  a  fraud. 

§  448.  Titles  voidable  for  fraud  and  for  infancy  distin- 
guished.— The  law  being  plainly  settled  that  a  fraudulent 
vendee,  whose  title  is  clearly  voidable  or  defeasible  at  the 
election  of  the  defrauded  v^endor,  may  nevertheless  confer 
upon  an  innocent  purchaser  a  perfect  title, ^  the  inquirv  is 


•  Valid  title  from  fraudulent  ven- 
dee.— The  prevalent  loose  statement 
that  a  fraudulent  vendee  acquires  no 
title  is  inaccurate ;  he  acquires  a  de- 
feasible or  voidable  title  ;  an  intention 
to  transfer  the  subject-matter  of  the 
sale  existed  ;  the  vendor  consented  to 
be  divested  of  his  property  ;  a  transac- 
tion legal  in  form  has  been  entered 
into,  which  it  is  true  can  be  unraveled, 
annulled,  or  defeated  at  the  vendor's 
election,  and  the  property  reclaimed, 
but  until  such  election  or  revocation, 
the  vendee  may,  as  a  vendor,  transfer 
this  defeasible  title  to  a  stranger,  who, 
if  he  purchases  for  valuable  considera- 
tion, without  notice  of  the  fraud,  ac- 
quires a  complete  title.  See  Somes  v. 
Brewer,  2  Pick.  (Mass.)  184,  an  ad- 
mirable decision ;  Rowley  v.  Bigelovv, 
12  Pick.  (Mass.)  307,  per  Shaw,  C.  J. ; 
Moody  V.  Blake,  117  Mass.  23;  Hoff- 
man V.  Noble,  6  Met.  (Mass.)  68.  The 
doctrine  of  voidable  or  defeasible  titles 
has  been  recognized  in  many  States. 
Neal  V.Williams,  18  Me.  391  ;  Titcomb 
V.  Wood,  38  Me.  563  ;  Willoughby  v. 
Moulton,  47  N.  H.  205  ;  Williamson  v. 
Russell,  39  Conn.  406 ;  Mears  v.  Wa- 
ples,  3  Houst.  (Del.)  581  ;  S.  C.  4  lb.  62 ; 
Williams  v.  Given,  6  Gratt.  (Va.)  268 ; 
Old  Dominion  Steamship  Co.  v.  Burck- 
hardt,  31  lb.  664;  Kern  v.  Thurber,  57 


Ga.  172 ;  Lee  v.  Portwood,  41  Miss. 
109 ;  Hawkins  v.  Davis,  5  Ba.xter 
(Tenn.)  698 ;  Wilson  v.  Fuller,  9  Kan. 
176  ;  Sharp  v.  Jones,  18  Ind.  314  ;  Rice 
V.  Cutler,  17  Wis.  352  ;  Cochran  v. 
Stewart,  21  Minn.  435  ;  Paige  v.  O'Neal, 
12  Cal.  4S3  ;  Story  on  Sales,  §  200. 
The  logical  theory  upon  which  it  rests, 
as  regards  the  superior  right  of  an  in- 
nocent purchaser,  is  not  clear.  In 
Thurston  v.  Blanchard,  22  Pick.  (.Mass.) 
18,  the  (5t7«rtyf<ic' purchaser's  protection 
is  treated  as  an  arbitrary  exception  ex- 
isting in  spite  of  the  fact  that  no  title 
passes  to  the  first  vendee ;  while  in 
George  v.  Kimball,  24  Pick.  (Mass.) 
241,  it  is  said  that  the  process  by  which 
the  vendor  is  divested  of  his  title  is  not 
fully  agreed  upon.  See  7  Southern  Law 
Rev.  N.  S.  551.  The  law  of  New  York 
upon  this  subject  is  discussed  in  many 
cases.  See  Caldwell  v.  Bartlctt.  3  Duer 
(N.  Y.)  341  ;  Keyscr  v.  Harbeck,  3 
Duer  (N.  Y.)  373  ;  Stevens  v.  Hyde,  32 
Barb.  (N.  Y.)  180;  Paddon  v.  "Taylor, 
44  N.  Y.  371.  One  of  the  leading  and 
most  important  of  these  is  Barnard  v. 
Campbell,  65  Barb.  (N.  Y.)  286;  affi'd 
on  appeal,  55  N.  Y.  456 ;  reargument 
denied,  58  N.  Y.  73.  The  substance  of 
the  principle  recognized  in  this  case  is, 
that  the  innocent  purch.ascr  from  the 
fraudulent  vendee    has,  not   a  perfect 


632 


FRAUD    AND    INFANCY. 


§448 


suggested,  why  is  it,  if  the  conveyance  of  an  infant  is  only 
voidable,  that  an  innocent  purchaser  does  not  take  title 
from  the  infant's  vendee,  free  from  the  infant's  right  of 
disaffirmance  ?  There  is  a  wide  distinction,  however,  be- 
tween the  two  classes  of  acts.  In  the  case  of  a  fraudulent 
transfer  the  vendor  is  stu  jtiris  and  capable  of  performing 
a  valid  act.  Its  voidable  character  is  due  to  the  fact  that 
he  is  inveigled  into  its  performance  by  deceit,  not  that  any 
inherent  power  to  consummate  the  transaction  is  wanting. 
The  invalidity  rests  in  extrinsic  facts.  So,  too,  an  estop- 
pel may  operate  to  seal  his  lips  and  prevent  a  rescission  of 
the  act  from  operating  as  against  an  innocent  purchaser. 
The  infant's  right  of  disaffirmance,  however,  is  predicated 
upon  entirely  different  principles.  The  infant  does  not 
possess  the  judgment  or  discretion  to  act  or  contract  ; 
reason  is  wanting  in  degree  ;  ^  neither  an  estoppel,  nor  the 


title,  but  an  equity  superior  to  that  of 
the  original  vendor  predicated  upon  an 
estoppel  against  the  latter's  setting  up 
his  title  after  having  conferred  upon 
the  fraudulent  vendee  the  apparent 
ownership.  Allen.  J.,  said,  in  the  Court 
of  Appeals  :  "  Two  things  must  concur 
to  create  an  estoppel  by  which  an  owner 
may  be  deprived  of  his  property  by  the 
act  of  a  third  person  without  his  assent, 
under  the  rule  now  considered.  First. 
The  owner  must  clothe  the  person  as- 
suming to  dispose  of  the  property  with 
the  apparent  title  to,  or  authority  to 
dispose  of  it ;  and  Secotid.  The  person 
alleging  the  estoppel  must  have  acted 
and  parted  with  value  upon  the  faith  of 
such  apparent  ownership  or  authority, 
so  that  he  will  be  the  loser  if  the  ap- 
pearances to  which  he  trusted  are  not 
real.  In  this  respect  it  does  not  differ 
from  other  estoppels  in  pats."  Bar- 
nard V.  Campbell,  55  N.  Y.  463,  citing 
Weaver  v.  Barden,  49  N.  Y.  286  ;  Mc- 
Goldrick  v.  Willits,  52  N.  Y.  612  ;  City 
Bank  v.  Rome,  W.  &.  O.  R.R.  Co.,  44 


N.  Y.  136  ;  Saltus  v.  Everett,  20  Wend. 
(N.  Y.)  267  ;  Wooster  v.  Sherwood,  25 
N.  Y.  278  ;  Brower  v.  Peabody,  13  N. 
Y.  121.  This  New  York  doctrine  has 
been  termed  peculiar  and  exceptional, 
but  it  seems  to  us  to  embody  the  only 
logical  and  solid  basis  upon  which  the 
title  of  the  innocent  purchaser  can  rest. 
These  principles  of  course  have  no  ap- 
plication to  an  assignee  in  bankruptcy, 
for  he  gets  no  greater  interest  in,  or 
title  to,  the  property  than  the  bankrupt , 
he  acquires  only  the  defeasible  title  of 
the  latter  to  the  goods,  and  his  title 
may  be  determined  by  a  disaffirmance 
of  the  'contract.  The  assignee  takes 
subject  to  all  the  equities.  Donaldson 
v.  Farwell,  93  U.  S.  631.  See  generally 
Yeatman  v.  Savings  Inst.,  95  U.  S.  766 ; 
Stewart  v.  Piatt,  loi  U.  S.  739  ;  Chace 
v.  Chapin,  130  Mass.  128;  Slade  v. 
Van  Vechten,  11  Paige  (N.  Y.)  21; 
Clark  V.  Flint,  22  Pick.  (Mass.)  231. 
See,  also,  §§  114,  115. 

■  Dexter  v.  Hall,  15  Wall.  9. 


§  449  IXFANTS    AND    LUNATICS.  6;^T, 

doctrine  of  laches  can  ordinarily  operate  against  him,^  for 
he  is  not  S7n'  jtiris ;  there  is  an  absence  of  one  of  the 
primary  elements  going  to  make  up  a  contract.  We  have 
said  that  degrees  of  void  acts  arc  impossibilities"/  but  the 
instances  under  consideration  prove  that  there  may  be,  so 
to  speak,  degrees  of  voidable  acts.  The  rescission,  or  dis- 
affirmance of  his  deed  by  an  infant  is,  as  we  have  seen, 
more  fatal  and  effectual  than  the  disaffirmance  of  a  deed 
by  a  vendor  for  fraud.  The  voidable  characteristics  of  the 
infant's  deed  follow  the  title,  and  the  right  of  disaffirmance 
may  be  exercised  even  when  it  is  vested  in  the  hands  of 
an  innocent  purchaser.  It  follows  that  an  act  voidable 
for  infancy  possesses  more  of  the  distinguishing  character- 
istics and  qualities  of  a  nullity  than  an  act  voidable  for 
fraud. 

§  449.  Acts  of  infants  and  of  lunatics  compared. — Let  us 
examine  further  the  acts  of  infants  and  of  lunatics.  In 
Breckenridge's  Heirs  v.  Ormsby^  it  is  said  that  a  parallel  is 
supposed  to  exist  between  the  civil  acts  of  lunatics  and  of 
infants  which  is  declared  to  be  the  well-established  doctrine 
of  the  law  as  evidenced  by  a  series  of  decisions  in  England 
and  in  the  various  States.  Robertson,  J.,  used  these  words  : 
"  It  is  not  necessary  to  inquire  into  the  reason  or  fitness  of 
this  analogy.  Its  judicial  sanctions  give  it  the  irresistible 
force  of  unquestionable  authority.  But  if  there  had  been 
no  decision  upon  it  we  should  be  inclined  to  the  ojiinion 
that  the  contracts  of  lunatics  and  infants  should  l)e  identi- 
cal in  their  legal  effects  ;  and  that  such  acts  of  an  infant 
as  are  void  should  be  void  if  done  by  a  lunatic  ;  and  such 
as  are  only  voidable  by  plea  of  infancy,  should  l)e  but  void- 
able by  reason  of  lunacy.'"*  The  principles  (.f  this  case  are 
perhaps  too  sweeping.     A  lunatic  is  clearly  more  lieli)less 

'  See  Cook  V.  Toumbs.  36  Miss.  685.  'See   Thompson    v.    Leach,    i    Ld. 

■'  See  §§413,  419.  "^^xm.  313:  s.  C.  3  Mod.  308;  High- 

'  I  J.  J.   Marsh.  (Ky.)  236;  S.  C.  19  more  on  Lunacy,  p.  1 13. 
Am.  Dec.  72. 


634  INFANTS    AND    LUNATICS.  §  449 

than  an  infant.  An  important  and  prominent  case  involv- 
ing a  discussion  of  the  distinction  between  void  and  void- 
able acts,  is  Dexter  v.  Hall.^  The  question  was  whether  a 
power  of  attorney  executed  by  a  lunatic  was  void,  or 
whether  it  was  only  voidable.  The  court  below  instructed 
the  jury  that  a  lunatic  was  incapable  of  executing  a  con- 
tract, deed,  power  of  attorney,  or  other  instrument  requir- 
ing volition  and  understanding,  and  that  a  power  of  attorney 
executed  by  an  insane  person  was  absolutely  void.  This 
instruction  was  affirmed  in  the  United  States  Supreme 
Court.  The  court  in  the  course  of  a  very  learned  and  able 
opinion,  argued  that  in  the  light  of  reason  it  is  difficult  to 
perceive  how  one  incapable  of  understanding  and  of  acting 
in  the  ordinary  affairs  of  life  can  make  an  instrument  the 
efficacy  of  which  consists  in  the  fact  that  it  expresses  his 
intention,  or  more  clearly  his  mental  conclusions.  "  The 
fundamental  idea  of  a  contract  is  that  it  requires  the  assent 
of  two  minds.  But  a  lunatic  or  a  person  7ion  compos  vientis 
has  nothing  which  the  law  recognizes  as  a  mind,  and  it 
would  seem  therefore,  upon  principle,  that  he  cannot  make 
a  contract  which  may  have  any  efficacy  as  such.  He  is  not 
amenable  to  the  criminal  laws  because  he  is  incapable  of 
discriminating  between  that  which  is  right  and  that  which 
is  wrong.  The  government  does  not  hold  him  responsible 
for  acts  injurious  to  itself.  Why  then  should  one  who  has 
obtained  from  him  that  which  purports  to  be  a  contract  be 
permitted  to  hold  him  bound  by  its  provisions,  even  until 
he  may  choose  to  avoid  it  ?  If  this  may  be,  efficacy  is  given 
to  a  form  to  which  there  has  been  no  mental  assent.  A 
contract  is  made  without  any  agreement  of  minds.  And 
as  it  plainly  requires  the  possession  and  exercise  of  reason 
quite  as  much  to  avoid  a  contract  as  to  make  it,  the  con- 


'  15  Wall.  9.     Compare  Edwards  v.     Anglo-Californian    Bank  v.  Ames,  27 
Davenport,   20  Fed.  Rep.  756;  Park-     Fed.  Rep.  728. 
hurst  V,  Hosford,   21   Fed.  Rep.  832 ; 


^  450  TESTS  OF  infants'  ACTS.  635 

tract  of  a  person  without  mind  has  the  same  effect  as  it 
would  have  had  he  been  in  full  possession  of  ordinary 
understanding.  While  he  continues  insane  he  cannot  avoid 
it ;  and  if,  therefore,  it  is  operative  until  avoided,  the  law 
affords  a  lunatic  no  protection  against  himself.  Yet  a 
lunatic,  equally  with  an  infant,  is  confessedly  under  the 
protection  of  courts  of  law  as  well  as  courts  of  equity. 
The  contracts  of  the  latter,  it  is  true,  are  generally  held  to 
be  only  voidable  (his  power  of  attorney  being  an  excep- 
tion). Unlike  a  lunatic,  he  is  not  destitute  of  reason.  He 
has  mind,  but  it  is  immature,  insufficient  to  justif)^  his  as- 
suming a  binding  obligation.  And  he  may  deny  or  avoid 
his  contract  at  any  time  ....  after  he  comes  of  age. 
This  is  for  him  a  sufficient  protection.  But  as  a  lunatic 
cannot  avoid  a  contract  for  want  of  mental  capacity,  he  has 
no  protection  if  his  contract  is  only  voidable." 

§  450.  Tests  of  infants'  acts. — There  has  been  a  marked 
change  in  our  law  with  regard  to  the  subject  of  the  legal 
effect  of  an  infant's  acts,  whether  they  are  to  be  considered 
void  or  voidable  ;  and  numerous  attempts,  generally  unsuc- 
cessful, have  been  made  to  formulate  a  test  applicable  to 
all  cases.  An  English  writer  many  years  ago^  concluded 
that  the  true  criterion  was,  that  "  acts  which  are  capable  of 
being  legally  ratified  are  voidable  only  ;  acts  which  are  in- 
capable of  being  legally  ratified  are  absolutely  void."  This 
test,  however,  is  palpably  worthless,  and  renders  the  confu- 
sion worse  confounded.  The  principle  it  embodies  is  cor- 
rect, but  the  effect  of  the  rule  is  to  "  replace  one  difficulty 
by  another."  The  inquirer  is  brought  no  nearer  a  solution 
of  the  problem.  Chancellor  Kent  repudiated  this  criterion, 
and  remarked  that  it  did  not  free  the  question  from  embar- 
rassment, or  afford  a  clear  and  definite  test.^  The  rule  fur- 
nished by  Chief-Justice  Eyre^  is,  that  where  the  courts  can 


'  Bingham  on  Infancy,  p.  45.  ^  Keane  v.  Boycott,  2  II.  Bla.  512. 

^  2  Kent's  Com.  234. 


636  CLASSES    OF    infants'    ACTS.  §  45 1 

pronounce  that  the  contract  is  for  the  benefit  of  the  infant, 
as  for  instance  for  necessaries,  then  it  shall  bind  him  ;  where 
it  can  pronounce  it  to  be  to  his  prejudice  it  is  void  ;  and 
where  it  is  of  an  uncertain  nature  as  to  benefit  or  prejudice 
it  is  voidable  only,  and  it  is  in  the  election  of  the  infant  to 
affirm  or  disaffirm  it.  This  test  seems  deservedly  to  have 
met  with  more  favor  ^  than  the  one  last  furnished,  for  it 
embodies  the  characteristics  of  the  acts  which  are  void  or 
voidable,  and  is  probably  as  definite  as  any  of  which  the 
subject  is  capable.^ 

§  451.  Classes  of  infants'  acts. — The  character  of  the  acts 
and  contracts  of  infants  is  discussed  with  much  clearness  in 
Robinson  v.  Weeks,^  and  the  court  in  conclusion  use  these 
words  :  "  We  think  the  true  doctrine  is  that  the  contracts 
of  minors  may  be  divided  into  three  classes.  First.  Bind- 
ing; if  for  necessaries  at  fair  and  just  rates.  Second.  Void  ; 
if  manifestly  and  necessarily  prejudicial,  as  of  suretyship, 
gift,  naked  release,  appointment  of  agents,  confession  of 
judgment,  or  the  like.  Third.  Voidable,  at  the  election  of 
the  minor,  either  during  his  minority  or  within  a  reasonable 
tiriie  after  he  becomes  of  age  ;  and  this  last  class  includes 
all  the  agreements  of  a  minor  which  may  be  beneficial  and 
are  not  for  necessaries  until  fully  executed  on  both  sides, 
and  all  executed  contracts  of  this  sort  where  the  other  party 
can  be  placed  substantially  in  statu  quoT  As  stated  by 
the  Supreme  Court  of  Alabama,  in  Philpot  v.  Bingham,* 
"  Contracts  of  an  infant,  caused  by  his  necessities,  or  mani- 
festlv  for  his  advantage,  are  valid  and  binding,  while-those 
manifestly  to  his  hurt  are  void.  Contracts  falling  between 
these  classes  are  voidable.     Relaxation  of  ancient  rigor  has 


'  United  States  v.  Bainbridge,  i  Ma-  regarded  as  beneficial  to  him  [the  in- 

son  82 ;  2  Kent's  Com.  236 ;  McGan  v.  fant]  which  are  null  from  the  begin- 

Marshall,  7  Humph.  (Tenn.)  121.  ning." 

-  In  Dunton  v.  Brown,  31  Mich.  182,  ^  56  Me.  106. 

Campbell,  J.,  said:    "It  is  only  such  ■»  55  Ala.  438. 
agreements  as  are  not  possibly  to  be 


§452  CONTRACTS    USUALLY    VOIDABLE.  637 

had  the  effect  of  placing  many  transactions,  formerly  ad- 
judged void,  in  the  more  conservative  category  of  voidable." 

§  452.  Contracts  of  infants  usually  voidable — Illustrations. — 
The  right  of  an  infant  to  own  real  and  personal  property  is 
as  clearly  defined  and  as  well  protected  as  that  of  an  adult.^ 
The  infant  acquires  the  absolute  title,  and  his  parent, 
guardian,  or  master  has  in  law  no  more  right  to  take  the 
property  for  any  purpose  beyond  that  of  safe  keeping,  than 
a  stranger.'^  Keeping  this  fact  in  view,  let  us  consider  fur- 
ther the  infant's  power  to  make  contracts.  Very  few  acts  or 
contracts  of  infants  are  absolutely  void,  and  tliese  are  limited 
to  such  as  necessarily  operate  to  his  prejudice.  It  has  been 
said  that  it  is  fortunate  for  infants  that  such  is  the  law,  for 
deplorable  indeed  would  be  their  condition  if,  during  the 
period  of  minority  which  is  arbitrarily  fixed  by  law,  they 
could  make  no  contracts  for  their  own  benefit.  Their  legal 
disability  would  then  become  a  "  handcuff  instead  of  a 
shield,"  and  the  law  would  be  their  worst  enemy  instead  of 
being,  as  it  professes  to  be,  their  guardian  and  best  friend. 
If  their  contracts  are  void,  then  the  infant  is  not  bound, 
and  no  duty  or  obligation  is  imposed  upon  those  with  whom 
the  void  contract  purported  to  have  been  made  ;  infants 
would  thus  be  doomed  to  vassalage  and  frequently  to  des- 
titution and  oppression.  In  the  leading  case  of  Brecken- 
ridge's  Heirs  v.  Ormsby,"  Robertson,  J.,  said  :  "  The  en- 
lightened benevolence  of  the  common  law,  therefore,  enables 
infants  to  make  valid  contracts  with  adults,  and  to  secure 
their  inexperience  and  imbecility  from  imposition,  allows 
the  infants,  but  not  the  other  parties,  the  personal  privilege 
of  avoiding  them,  if  they  shall  consider  them  disadvan- 
tageous. This  is  exactly  as  it  should  be.  There  are  very 
few  contracts  from  which  the  adult  party  can  escape,  under 

'McCloskey  v.  Cyphert,  27  Pa.   St.  29;  McCIoskey  v.  Cyphcrt,  27   Pa.  St. 

220.  220. 

'  See    Boobier   v.    Boobier,    39   Me.  '  i  J.  J.  Mar.  (Ky.)  236;  s.  C.  19  Am. 

406;  Smith  V.  Smith,  3   Bing.  N.   C.  Dec.  71,  74. 


638  CONTRACTS    USUALLY    VOIDABLE.  §  452 

cover  of  the  disability  of  the  minor  party."  The  benefit  to 
accrue  to  the  infant  is  the  great  point  to  be  regarded,  the 
purpose  of  the  law  being  to  protect  his  estate  from  injury 
resulting  from  his  indiscretion,  imbecility,  or  imprudence. 
This  general  rule  seems  to  require  that  all  contracts  of  in- 
fants should  be  held  voidable  rather  than  void.  Hence  it 
is  that,  if  the  act  has  a  semblance  of  benefit  to  the  infant  it 
is  considered  voidable.  A  contrary  policy  would  prejudice 
the  infant  and  in  a  measure  benefit  the  third  party  who 
might  deal  with  him,  which  is  exactly  contrary  to  the  spirit 
of  the  rule.  Chief-Justice  Parker  said  :  "  Whenever  the 
act  done  may  be  for  the  benefit  of  the  infant,  it  shall  not 
be  considered  void  ;  but  he  shall  have  his  election  when  he 
comes  of  age  to  affirm  or  avoid  it."  ^  An  infant  may  make 
a  voidable  purchase  of  land,  for,  said  Coke,  "  it  is  intended 
for  his  benefit,  and  at  his  full  age  he  may  either  agree 
thereunto  and  perfect  it,  or,  without  any  cause  to  be  alleged, 
waive  or  disagree  to  the  purchase,"^  and  sales  of  real  estate 
by  infants  are  not  void  but  voidable.^  So  an  exchange  of 
real  estate  by  an  infant  is  voidable.*  A  minor's  contract 
for  stock, ^  his  agreement  to  convey,^  his  contract  to  deliver 


'  Whitney  v.  Dutch,  14  Mass.  462.  ^  Co.  Litt.  2  b. 
See  2  Kent's  Com.  234.  In  Smith  v.  ^  Ferguson  v.  Bell,  17  Mo.  351  ;  Gil- 
Mayo,  9  Mass.  64,  Parker,  J.,  said:  let  v.  Stanley,  i  Hill  (N.  Y.)  121; 
"  The  general  policy  of  the  principle  of  Wheaton  v.  East,  5  Yerg.  (Tenn.)  41  ; 
law  which  aiithorizes  an  infant  to  avoid  Allen  v.  Poole,  54  Miss.  323  ;  Illinois 
a  contract  cannot  be  disputed.  The  Land  Co.  v.  Bonner,  75  111.  315  ;  Dixon 
experience  of  ages  has  proved  its  util-  v.  Merritt,  21  Minn.  196;  Davis  v. 
ity.  The  readiness  of  young  persons  Dudley,  'jo  Me.  236  ;  Schaffer  v.  La- 
to  engage  themselves  in  burdensome  vretta,  57  Ala.  14;  Bool  v.  Mix,  17 
contracts  without  sufficient  considera-  Wend.  (N.  Y.)  119;  Scranton  v.  Stew- 
tion,  and  of  older  ones  to  take  advan-  art,  52  Ind.  68  ;  Youse  v.  Norcoms,  12 
tage  of  their  inexperience,  would  pro-  Mo.  549 ;  Barker  v.  Wilson,  4  Heisk. 
duce  general  mischief  in  the  commu-  (Tenn.)  268. 

nity,  did  not  this  wholesome  principle  ■*  Williams  v.  Brown,  34  Me.  594. 

interpose  to  produce  a  degree  of  cau-  ^  Indianapolis  Chair  Mfg.  Co.  v.  Wil- 

tion  in  looking  to  the  character  of  those  cox,  59  Ind.  429  ;  Ruchizky  v.  De  Ha- 

with  whom  they  deal  ;   and  although  ven,  97  Pa.  St.  202. 

particular  instances  of  hardship  may  '  Carrell  v.  Potter,  23  Mich.  377. 
be  lamented,  the  general  policy  of  the 
law  must  be  enforced." 


§  45. 


JUDGMENTS    AGAINST    INFANTS. 


639 


money  ^  or  pay  borrowed  money,'  his  chattel  mortgage,^  his 
partnership  agreement/  his  gifts,"  his  deed  of  trust,^  and  his 
contracts  generally/  may  be  instanced  as  acts  or  transac- 
tions which  are  voidable. 

§  453-  Judgments  against  infants. — Infants  are  deemed 
to  be  wards  of  the  court,  and,  when  brought  in  by  service 
of  process,  the  court  will  look  after  and  protect  their  in- 
terests.® The  failure  to  appoint  a  guardian  for  an  infant 
is  held  in  many  cases  to  render  the  judgment  voidable, 
but  not  absolutely  void,^  and  in  general  judgments  against 
him  are  voidable. ^"^  Thus,  a  judgment  in  partition  may  be 
avoided  as  against  minors  who  were  not  represented  in  the 
suit  by  a  guardian  ad  litem,  but  the  judgment  cannot  be 
impeached  in  a  collateral  action."  And,  as  a  general  rule, 
a  judgment  against  an  infant,  rendered  without  the  ap- 
pointment of  a  guardian  ad  litem,  is  not  void,  but  valid 
until  reversed  or  set  aside.^' 


'  West  V.  Penny,  16  Ala.  186. 

'  Kennedy  v.  Doyle,  10  Allen  (Mass.) 
161. 

"  Miller  v.  Smith,  26  Minn.  248 ; 
Corey  v.  Burton,  32  Mich,  30. 

*  Dunton  v.  Brown,  31  Mich.  182  ; 
Jaques  v.  Sax,  39  Iowa  367. 

*  Oxley  V.  Tryon,  25  Iowa  95  ;  Per- 
son V.  Chase,  37  Vt.  647  ;  Holt  v.  Holt, 
59  Me.  464. 

'  Slaughter  v.  Cunningham,  24  Ala. 
260. 

■"  Hill  V.  Anderson,  13  Miss.  216  ; 
Robinson  v.  Weeks,  56  Me.  102. 

*  Ingersoll  v.  Mangam,  84  N.  Y.  622. 

*  Matter  of  Becker,  28  Hun  (N.  Y.) 
211  ;  McMurray  v.  McMurray,  66  N.Y. 
177;  Croghan  v.  Livingston,  17  N.  Y, 
218;  Bloom  V.  Burdick.  i  Hill  (N.Y.) 
143 ;  See  Ingersoll  v.  Mangam,  84  N. 
Y.  622;  Preston  v.  Dunn,  25  Ala.  507; 
Robb  V.  Lessee  of  Irwin,  15  Ohio  689  ; 
Gronfier  v.  Puymirol,  19  Cal.  629;  Bar- 
ber V.  Graves,  18  Vt.  290;  Austin  v. 


Charlestown  Seminary,  8  Met.  (Mass.) 
196;  White  V.  Albertson,  3  Dev.  Law 
(N.  C.)  241. 

'"  Kempv.  Cook,  18  Md.  130;  Trap- 
nail  V.  State  Bank,  18  Ark.  53  ;  Bickel 
V.  Erskine,  43  Iowa  213;  Walkenhnrst 
V.  Lewis,  24  Kan.  420. 

"  Montgomery  v.  Carlton,  56  Texas 

365- 

'-  Simmons  v.  McKay,  5  Bush  (Ky.) 
25 ;  Pond  V.  Doneghy,  18  B.  Mon. 
(Ky.)  558;  Smith  v.  Ferguson,  3  Met. 
(Ky.)  424- 

'Jiidgvients  against  married  women. 
— So  at  common  law  a  peisonal  judg- 
ment cannot  be  enterefl  against  a.  feme 
covert  by  confession.  Such  judgments 
have  invariably  been  set  aside  on  mo- 
tion. See  2  Graham's  Pr.,  2d  ed.,  772  ; 
Brittin  v.  Wilder,  6  Hill  (N.  Y.)  242 ; 
Oulds  V.  Sansom,  3  Taunt.  261.  It  was 
said  by  Mason,  J.,  in  Watkins  v.  Abra- 
hams, 24  N.  Y.  74.  in  delivering  the 
opinion  of  the  New  York  Court  of  Ap- 


640  infant's  power  of  attorney.  §  454 

§  454.  Infant's  power  of  attorney. — In  discussing  the  dis- 
tinction between  the  void  and  voidable  acts  of  an  infant, 
his  power  of  attorney  under  seal  is  generally  selected  by 
way  of  example  as  an  act  absolutely  void.^  Thus,  it  is  said 
by  the  Supreme  Court  of  the  United  States  in  Dexter  v. 
Hall  (1872)  :^  "  We  know  of  no  case  of  authority  in  which 
the  letter  of  attorney  of  either  an  infant  or  a  lunatic  has 
been  held  merely  voidable."  In  Semple  v.  Morrison^  it 
was  decided  that  an  infant's  appointment  of  an  attorney  or 
agent  by  parol  was  equally  void  with  one  made  under  seal. 
So  in  Knox  v.  Flack*  the  court  declared  that  a  minor's  war- 
rant of  attorney  to  confess  judgment,  no  matter  under  what 
circumstances  it  was  given,  was  clearly  void.  And  in  Phil- 
pot  V.  Bingham^  (decided  in  1876),  the  cases  were  followed 
to  the  effect  that  an  infant's  power  of  attorney  to  sell  lands 
was  absolutely  void.^  The  principles  of  these  cases,  how- 
ever, are  in  conflict  with  the  spirit  and  tendency  of  our 
modern  law,  which  is  to  regard  all  the  acts,  contracts,  and 
transactions  of  minors  as  merely  voidable,  "  because  it  is 
better  for  infants  that  they  should  have  an  election."     It 


peals,  that   a   married    woman   could  S.  C.  7  Luz.  Leg.  Reg.  38  ;  Fonda  v. 

"no  more  confess  a   valid  judgment  Van    Home,    15    Wend.   (N.  Y.)  636. 

in  personam  than  an  infant.     She  was  This  distinction  may  be  traced  to  the 

always  placed  on  the  same  footing  in  early  doctrine  that  the  deeds  of  an  in- 

this   respect   as   an   infant."     But  see  fant  which  do  not  take  effect  by  deliv- 

Knickerbacker  v.  Smith,  16  Abb.  Pr.  ery  of  his  bond  are  void,  and  such  as 

(N.  Y.)  243.     This  disability  is  now  in  do  take  effect  by  delivery  of  his  bond 

great  measure  removed  by  statute.  are  voidable.     See  Conroe  v.  Birdsail, 

'  See  Whitney  v.  Dutch,    14  Mass.  i   Johns.  Cas.   (N.  Y.)   127;  Zouch  v. 

457;   S.  C.  7   Am.  Dec.   229;    Dexter  Parsons,  3  Burr.  1804 ;  Ashlin  v.  Lang- 

V.  Hall,  15  Wall.  9;  Waples  v.  Hast-  ton,  4  Moore  &  S.  719. 

ings,  3  Harr.  (Del.)  403;  Lawrence  v.  ■'15  Wall.  26. 

McArter,  10  Ohio  37  ;  Bennett  v.  Da-  '  7  Mon.  (Ky.)  298.     But  see  Hardy 

vis,  6  Cow.  (N.  Y.)  393 ;  Pyle  v.  Cra-  v.  Waters,  38  Me.  450. 

vens,  4  Litt.  (Ky.)   17  ;  Trueblood  v.  ■*  22  Pa,  St.  337. 

Trueblood,  8  Ind.  195  ;  Knox  v.  Flack,  ^  55  Ala.  435. 

22  Pa.  St.  337 ;  Thompson  v.  Leach,  *  But  compare  Armitage  v.  Widoe, 

3  Mod.  302 ;  Zouch  V.  Parsons,  3  Burr.  36  Mich.    124;  Weaver  v.  Carpenter, 

1805;    Saunderson  v.   Marr,  i  H.  Bla.  42  Iowa  347. 
75  ;  Cole  V.  Cole,  9  Lancaster  Bar  105  ; 


§  455  EXAMPLES  OF  VOID  ACTS.  64I 

does  not  necessarily  result  that  the  appointment  of  the 
agent  or  attorney  will  work  an  injury  or  disadvantage  to  the 
infant.  On  the  contrary,  if  it  is  made  to  enable  the  attor- 
ney to  do  some  act  for  the  benefit  of  the  infant,  such  as  a 
power  of  attorney  to  receive  seizin  to  complete  his  title  to 
an  estate,  it  should  clearly  be  upheld.^  If  the  appointment, 
as  these  decisions  seem  to  imply,  is  absolutely  void,  then 
no  person  is  bound  by  any  act  of  the  agent ;  it  is  a  nullity, 
incapable  of  confirmation  or  ratification,  no  matter  how- 
great  an  advantage  might  have  resulted  to  the  infant  from 
the  agent's  diligence  and  skill. ^  In  a  case  which  arose  in 
Massachusetts,  it  was  held  that  a  paper  not  under  seal, 
signed  by  an  infant,  authorizing  the  attorney  to  receive 
the  money  to  his  own  use,  was  not  void;^  so  an  infant's 
power  of  attorney  to  sell"*  or  transfer^  a  promissory  note 
has  been  held  not  to  be  void.  The  Supreme  Court  of 
Maine,  in  Towle  v.  Dresser,^  decided  that  the  rescission  of 
a  minor's  contract,  through  the  intervention  of  an  agent 
employed  by  him  for  that  purpose,  was  not  manifestly  nor 
necessarily  prejudicial  to  the  minor,  and  was  not  to  be 
classed  as  void  ;  that  where,  as  in  that  case,  it  was  accom- 
panied by  the  restoration  of  the  consideration,  it  would  be 
regarded  as  so  far  effectual  that  the  other  party  could  no 
longer  shield  himself  under  the  contract  from  a  liability  to 
restore  or  make  compensation  for  such  of  the  infant's  prop- 
erty as  he  acquired  by  the  contract. 

§  455.  Other  examples  of  void  acts. — Other  rllustrations 
of  acts  of  infants  held  to  be  void,  are  his  promissory  note 
as  surety,'''  his  bond  as  surety,^  or  with  penalty  for  the  pay- 

'  See  Whitney  v.  Dutch,  14  Mass.  ■'  Hardy  v.  Waters.  38  Me.  450. 

457.  "  73  Me.  258.. 

•■f  See  Picklcr  v.  The  State,  18  Ind.  '  Curtin  v.  Patten.  11  S.  &  R.  (Pa.). 

269;  Story  on  Agency,  pp.  463, 474, 477.  305;    Nightingale   v.   Withinp.ton,    15 

*  McCarty  V.  Murray,  3  Gray  (Mass.)  Mass.    272;,  Maples   v.  Wightnian,  4. 

578.     Compare   Kingman  v.  Perkins,  Conn.  376. 

105  Mass.  III.  '  Allen  v.  Minor,  2  Call  (Va.)  7o;Car- 

•*  Hastings  v.  Dollarhide,  24CaI.  195.  nahan  v.  AJlderdice,  4  Harr.  (Del.)  99. 
41 


642  infant's  assignment.  §  456 

meriL  oi  nucrest.^  Then  an  infant's  conveyance  of  land  by 
way  of  gift  or  without  consideration  has  been  held  to  be 
void,  because  obviously  prejudicial  to  his  interests.~  But 
the  tendency  of  the  modern  cases  certainly  is  to  enlarge 
the  class  of  voidable  acts.^  An  example  of  this  may  be 
found  in  the  cases  adjudging  an  infant's  contract  as  surety 
or  indorser,  voidable  and  not  void.'* 

§  456.  Infant's  voluntary  assignment. — An  infant's  assign- 
ment in  trust  for  the  benefit  of  creditors  was  adjudged,  in 
Yates  V.  Lyon,^  to  be  absolutely  void  upon  the  theory  that 
an  assignment  must  be  unconditional,  and  reserve  no  right 
of  disaffirmance  or  revocation  to  the  assignor ;  that  it  was 
difficult  to  see  how  an  infant  could  of  his  own  act  and 
volition  create  a  trust  and  appoint  a  trustee  to  administer 
it  ;^  and  that  as  the  assignment  did  not  and  could  not  ab- 
solutely and  unconditionally  devote  the  property  assigned 
to  the  payment  of  the  debts  of  the  assignor,  it  was  void  in 
law  as  against  creditors.  Johnson,  J.,  said  :  "The  general 
principle  that  a  sale  or  assignment  by  an  infant  is  voidable 
only,  and  not  void  until  he  elects  to  avoid  it,  and  remains 
valid  until  such  election,  does  not  apply  to  this  branch  of 
the   law  which   allows   property   to    be   withdrawn   from 


'  Baylis  v.  Dineley,  3  M.  &  S.  477 ;  note  as  surety  is  necessarily  not  bene- 

Fisher  v.  Mowbray,  8  East  330.  ficial  to  an  infant.     It  may  or  may  not 

^  Swafford  v.  Ferguson,  3  Lea  (Tenn.)  be  beneficial  to  him,  according  to  the 

294.     But  see  Slaughter  v.  Cunning-  actual  circumstances   of  the  transac- 

ham,  24  Ala,  260.  tion." 

2  See  e.g.  State  v.  Plaisted,  43  N.  H.  ^  61  Barb.  (N.  Y.)  205.     See  Fox  v. 

413;   Palmer  v.   Miller,  25  Barb.  (N.  Heath,  21  How.  Pr.  (N.  Y.)  384. 

Y.)    399;    Mustard   v.   Wohlford,    15  ®  But  see  contra,  Hearle  v.  Green- 

Gratt.  (Va.)  329.  bank,  i  Ves.  Sr.  304 ;  2  Kent's  Comm. 

•*  Hardy  v.  Waters,  38  Me.  450 ;  234 ;  Eagle  Fire  Co.  v.  Lent,  i  Edw. 
Harner  v.  Dipple,  31  Ohio  St.  72;  Ch.  (N.  Y.)  301  ;  S.  C.  6  Paige  (N.  Y.) 
Owen  V.  Long,  112  Mass.  403;  Will-  635.  "An  infant  may  make  over 
iams  V.  Harrison,  11  S.  C.  412;  Fet-  property  upon  trust  by  any  act  of  as- 
row  V.  Wiseman, '40  Ind.  148.  In  surance,  and  it  is  not  void  but  voidable 
Owen  V.  Long,  112  Mass.  404,  Gray,  only;  and  the  estate  of  the  trustee  will 
C.  J.,  said  :  "  It  cannot  be  held  as  mat-  remain  good  until  the  assurance  be 
ter  of  law  that  to  sig^  a  promissory  avoided."    Yates  v.  Lyon,  61  N.  Y.  347. 


§  457  LIABILITY    FOR    TORTS.  643 

ordinary  legal  process  in  a  certain  way,  and  upon  certain 
terms  only.  Nor  is  it  of  the  least  consequence  that  the 
infant  assignor  did  not  elect  to  disaffirm  or  revoke,  but,  by 
his  silence  afterwards,  consented  and  ratified.  The  vice 
lies  in  the  power  he  had,  by  law,  to  disaffirm  and  avoid. 
The  assignment  did  not,  when  executed  and  delivered,  op- 
erate to  devote  the  property  unqualifiedly,  and  consequent- 
ly did  not  withdraw  it  from  the  reach  of  legal  process." 
This  decision  of  an  intermediate  tribunal  was,  however, 
overturned  in  the  New  York  Court  of  Appeals.^  The 
opinion  of  the  latter  court  illustrates  the  prevalent  tendency 
to  further  restrict  the  class  of  infants'  void  acts.  It  was 
said  that  in  any  case,  if  the  defense  of  infancy  was  to  be 
made  it  must  be  distinctly  interposed  by  the  infant  himself, 
and  that  it  was  not  the  proper  function  of  the  court  to 
make  it  for  him.  Furthermore,  it  was  held  that  the  assets 
of  the  firm  were  liable  for  the  debts  of  the  concern,  and 
that  the  utmost  exemption  the  infant  could  claim  was  per- 
sonal exemption  from  debts  beyond  what  the  assets  of  the 
firm  were  able  to  pay,  and  this  exemption  must  be  claimed 
by  the  infant  himself. 

§  457.  Liability  for  torts. — An  infant  is  liable  in  an  ac- 
tion ex  delicto  for  an  injury  to  property  occasioned  by  a 
wrongful  act,  such  as  exploding  fire-crackers  in  the  public 
streets  of  a  city,  thereby  frightening  a  horse  which  fell 
down  and  died.*^  In  Eckstein  v.  Frank, ^  where  it  ap- 
peared that  an  infant  had  fraudulently  represented  that  he 
was  of  full  age,  he  was  held  liable  in  an  action  of  tort 
brought  to  recover  back  the  property  or  for  damages.  So 
in  Wallace  v.  Morss,^  an  infant  was  held  liable  for  obtain- 
ing goods  fraudulently  without  intending  to  pay  for  them. 


'  Yates  V.  Lyon,  61  N.  Y.  347.  *  i  Daly  (N.  Y.)  334. 

'  Conklin  v.  Thompson,  29  Barb.  (N.  •■  5  Hill  (N.  Y.)  391.     But  see  Root 

Y.)  218.     See   Bullock  v.  Babcock,  3  v.  Stevenson,  24  Ind.  115. 
Wend.  (N.  Y.)  391. 


644  infant's  fraud.  §  458 

So  he  may  be  held  liable  for  embezzlement,*  or  for  draw- 
ing a  check  against  a  bank  where  he  has  no  funds,  in  pay- 
ment for  a  purchase.^ 

§  458.  Infant's  fraud  will  not  establish  contract  liability. 
— Studwell  V.  Shapter  ^  was  an  action  founded  on  contract 
for  the  value  of  goods  sold  and  delivered  to  an  infant. 
The  complaint  also  contained  allegations  to  the  effect  that 
the  infant  had  been  guilty  of  deceit  in  effecting  the  pur- 
chases. The  court  decided  that  the  allegations  of  deceit, 
when  given  their  full  effect,  were  entirely  insufficient  to 
charge  the  infant  with  a  /e^'al  liability  on  the  co7itracts 
which  the  plaintiffs  were,  by  reason  of  the  deceit,  induced 
to  enter  into  with  the  infant.  The  point  of  this  case  is 
that  misrepresentations  and  deceit  cannot  be  made  the 
basis  upon  which  to  enforce  the  agreements  or  contracts 
of  purchase  ;  the  remedy,  if  any,  is  an  action  to  recover 
damages  resulting  from  the  deceit.  Kent  says:  "The 
fraudulent  act,  to  charge  him,  must  be  wholly  tortious,  and 
a  matter  arising  ex  contractu,  though  infected  with  fraud, 
cannot  be  changed  into  a  tort  in  order  to  charge  the  infant 
in  trover,  or  case,  by  a  change  in  the  form  of  the  action."  * 
There  must  be  a  tort  independent  of  the  contract.^  Thus, 
in  People  v.  Kendall,^  Nelson,  J.,  said  {obiter) :  "  It  is 
well  settled  that  a  matter  arising  ex  contractu,  though  in- 
fected with  fraud,  cannot  be  changed  into  a  tort  in  order 
to  charge  the  infant  by  a  change  of  the  remedy."  At 
least,  if  the  wrong  in  any  way  arises  out  of  contract,  the 
infant  cannot  be  held  unless  the  contract  is  disaffirmed  by 


1  Elwell  V.  Martin,  32  Vt.  217.  563;   Moore  v.  Eastman,  i    Hun   (N. 

-  Mathews  v.  Cowan,  59  111.  341.  Y.)  578;  Green  v.  Greenbank,  2  Mar- 

3  54  N.  Y.  249.  shall  485  ;  S.  C.  4  Eng.  C.  L.  R.  375  ; 

■*  2  Kent's  Comm.  241,   citing  Jen-  People  v.  Kendall,  25  Wend.  (N.  Y.) 

nings  V,  Rundall,  8  T.  R.  335  ;  John-  399  ;  Munger  v.  Hess,  28  Barb.  (N.  Y.) 

son  V,  Pie,  i  Lev,  169;  Vasse  v.  Smith,  75  ;  Prescott  v,  Norris,  32  N.  H.  loi  ; 

6  Cranch  226;  West  v,  Moore,  14  Vt.  Morrill  v.  Aden,  19  Vt.  505. 

447 ;  Wilt  V.  Welsh,  6  Watts  (Pa.)  9.  «  25  Wend.  (N.  Y.)  401. 

'  Hewitt  V.  Warren,  10  Hun  (N.  Y.) 


§  459  ACTS    BINDING    UPON    INFANTS.  645 

the  aggrieved  party.  In  Hewitt  v.  Warren,^  Learned,  J., 
said  :  "  If  an  infant,  by  fraud,  obtains  property,  with  no 
intention  of  paying,  though  it  be  under  the  pretence  of  a 
contract  of  purchase,  the  defrauded  party  may  recover. 
He  does  so  on  the  ground  that  there  was  no  real  contract, 
and  he  disaffirms  the  apparent  contract.  On  the  same 
ground  those  cases  must  stand  which  have  permitted  a  re- 
covery for  damages  when  an  infant,  to  obtain  goods,  has 
fraudulently  pretended  that  he  was  of  full  age.  On  the 
same  principle,  if  a  party  has  been  induced  to  purchase 
property  from  an  infant,  by  the  infant's  fraud  and  misrep- 
resentation, it  would  seem  that  he  might,  on  discovering 
the  fraud,  disaffirm  the  contract,  return,  or  offer  to  return 
the  property,  and  thus  put  the  infant  in  the  position  of  a 
mere  wrong-doer,  unjustly  keeping  what  he  had  fraudulently 
obtained.  And  it  would  seem  that  the  infant  would  then 
be  liable  in  damages  for  tort."  The  weight  of  authority 
seems  also  to  be  to  the  effect  that  the  infant  is  not  estop- 
ped from  interposing  that  plea,  though  he  fraudulently 
represented  himself  as  of  age  when  he  contracted  the  ob- 
ligation.^ 

§  459.  Acts  binding  upon  infants. — "  Under  the  denomina- 
tion necessaries  fall  not  only  the  food,  clothes,  and  lodging 
necessary  to  the  actual  support  of  life,  but  likewise  means 
of  education  suitable  to  the  infant's  degree,  and  all  those 
accommodations,  conveniences,  and  even  matters  of  taste, 
which  the  usages  of  society  for  the  time  being  render  proper 
and  conformable  to  a  person  in  the  rank  in  which  the  in- 
fant moves."  ^  This  class  of  contracts,  being  valid  and 
effectual,  are  without  the  scope  of  this  treatise,  but  we  may 


'  10  Hun  (N.  Y.)  564.  ter,  54  N.  Y.  249  ;  Heath  v.  Mahoney, 

''■  Conrad  v.  Lane,  26  Minn.  389 ;  S.  7  Hun  (N.  Y.)  100 ;  Carpenter  v.  Car- 

C.  37  Am.  Rep.  412;   Merriam  v.  Cun-  penter,  45  Ind.   142.     See  Hughes  v. 

ningham,  11  Cush.  (Mass.)  40;  Burley  Gallans,  10  Phila.  (Pa.)  618. 

V.  Russell,  10  N.  H.  184;    Giison  v.  ^  Smith  on  Contracts,  p.  283. 

Spear,  38  Vt.  311  ;   Studwell  v.  Shap- 


646  ACTS    BINDING    UPON    INFANTS.  §  459 

observe  that  the  term  "necessaries"  "is  a  flexible  and  not 
an  absolute  term,"  ^  and  that  ordinarily  the  infant  is  not 
liable  for  necessaries  when  he  is  living  with  his  parents  or 
guardian,  and  his  needs  are  supplied  by  them,^  but  only 
when  he  is  away  from  home.^  The  question  as  to  what 
constitutes  necessaries  is  generally  left  to  the  jury  under 
general  instructions,  and  as  the  surroundings  and  circum- 
stances of  the  infants  vary  in  each  case,  it  is  quite  impossi- 
ble to  formulate  any  precise  or  entirely  satisfactory  conclu- 
sion from  the  authorities.  The  tastes  and  prejudices  of 
different  juries,  and  the  wide  divergence  in  the  needs,  social 
position,  and  pecuniary  prospects  of  infants  necessarily  in- 
troduce an  element  of  great  uncertainty  into  the  considera- 
tion of  the  subject.  While  the  infant  is  liable  for  neces- 
saries, he  is  not  bound  by  an  agreement  to  pay  a  particular 
sum;^  the  contract  is  voidable  beyond  the  fair  price  or 
value  of  the  goods.^  Hence  it  has  been  held  in  Arkansas 
that  an  infant's  bond  for  necessaries  is  valid,  and  that  in  an 
action  upon  it,  if  the  defense  of  infancy  w^as  pleaded,  the 
plaintiff  might  recover  the  value  of  the  necessaries.*^  A  bill 
for  the  board  of  horses  occasionally  used  to  carry  the  in- 
fant's family  out  to  ride,  has  been  held  not  to  come  within 
the  class  of  necessaries,''  and  an  infant  has  been  held  not  to 
be  liable  for  medical  services  simply  because  his  parents 
were  poor,^  nor  in  certain  cases  are  kid  gloves,  cologne, 
silk  cravats,  and  walking-canes  necessaries;^  nor  a  bill  for 
confectionery,  fruit,  and  dinners  of  an  undergraduate  at  col- 
lege supplied  in  his  room,  where  he  entertained  friends. ^° 

'  Breed   v.    Judd,    i    Gray   (Mass.)  '  Baum   v.   Stone,   12  Weekly   Dig. 

45S.  (N.  Y.)  353. 

-See  Angel  v.  McLellan,  16  Mass.  "^  Guthrie   v.   Morris,   22   Ark.  411. 

28;  Connoly  ads.  Hull,  3  McCord's  (S.  See  Cooper  v.  The  State,  37  Ark.  425. 

C.)  Law  6;  Perrin  v.  Wilson,  10  Mo.  '  Merriam  v.  Cunningham,  11  Cush. 

451;   Tilton  V.  Russell,  11  Ala.  497;  (Mass.)  40. 

Nichol  V.  Steger,  6  Lea  (Tenn.)  393.  '  Hoyt  v.  Casey,  114  Mass.  397. 

^  Angel  V.  McLellan,  16  Mass.  28.  '  Lefils  v.  Sugg,  15  Ark.  137. 

^  Parsons  v.  Keys,  43  Texas  557.  '"  Wharton  v.  Mackenzie,  5  Q.  B.  606. 

See  Brooker  v.  Scott,  11  M.  &  W.  67. 


§  460  CONTRACTS  OF  LUNATICS.  647 

Tobacco,-'  betting  books,^  an  insurance  contract,^  solitaires,* 
money  paid  for  exemption  from  military  duty,^  and  ex- 
penses of  improvements  upon  a  minor's  lands,^  have,  in 
each  instance,  been  rejected  as  not  being  necessaries. 

An  infant  has  been  held  liable  for  board,'^  for  schooling,^ 
though  not  always  for  a  college  education,^  for  wedding 
clothes, ^°  for  presents  to  his  bride,"  for  a  yoke  of  oxen  used 
upon  a  farm  which  was  managed  by  the  minor, ^'^  for  the  ser- 
vices of  an  attorney  in  defending  him  in  a  bastardy  case,^^ 
preparing  a  marriage  settlement,^*  or  in  other  legal  business, ^^ 
for  a  dentist  bill,^^  and  for  necessaries  furnished  to  his  wife." 

§  460,  Contracts  of  lunatics. — "  It  is  evident,"  says  Chief- 
Justice  Redfield,  in  Lincoln  v.  Buckmaster,^^  "  from  a  care- 
ful examination  of  the  decided  cases,  that  the  law  is  not 
fully  settled  as  to  the  extent  of  the  liability  of  lunatics 
arising  out  of  contracts."  So  in  Eaton  v.  Eaton  ^^  the  court 
remarked  that  "  an  examination  of  the  cases  upon  this  sub- 
ject shows  much  conflict  and  some  uncertainty."^''  Though 
the  law  governing  this  subject  in  all  its  phases  cannot  be 
definitely  and  satisfactorily  declared,  yet  certain  of  the  rules 
applicable  to  it  can  be  formulated,  and  the  tendency  of  the 


*  Bryant  v.  Richardson,  L.  R.  3  Ex.        "  Jenner  v.  Walker,  19  Law  Times 
93.  n-  (N.  S.)  398. 

*  Jenner  v.  Walker,  19  Law  Times        '■'  Mohney  v.  Evans,  51  Pa.  St.  80. 
(N.  S.)  398.  '3  Barker  v.  Hibbard,  54  N.  H.  539. 

^  New  Hampshire  Ins.  Co.  v.  Noyes,  But  see  Phelps  v.  Worcester,  1 1  N.  H. 

32  N.  H.  345.  51. 

•»  Ryder  v.  Wombwell.  L.  R.  4  Exch.         '■'  Helps  v.  Clayton,  17  C.  B.  (N.  S.) 

32.  553- 

=  Dorrell  v.  Hastings,  28  Ind.  478.  '■'•  Munson  v.  Washband,   31    Conn. 

"Price    V.    Sanders,   60    Ind.    314;  303. 
Tupper  V.    Cadwell,    12  Met.   (Mass.)         "  Strong  v.  Foote,  42  Conn.  203. 
559;  Wallis  V.  Bardwell,  126  Mass.  366.         ''  Price  v.  Sanders,  60  Ind.  315,  and 

■'  Bradley  v.  Pratt,  23  Vt.  378.  cases  cited. 

*  Raymond  v.  Loyl,  10  Barb.  (N.  Y.)         '"  32  Vt.  659. 

489;  Manby  v.  Scott,  i  Sid.  112.  '°  37  N.  J.  Law  115. 

"  Middlebury    College    v.    Chandler,         '"  See  Jackson  v.  King,  4  Cowen  (N. 

16  Vt.  683.  Y.)  207;  s.  C.   15   Am.  Dec.  354,  and 

"  Sams  V.  Stockton,  14  B.  Mon.  (Ky.)  note. 
232. 


648  CONTRACTS  OF  LUNATICS.  §  460 

authorities  outlined.  The  early  common-law  principle  to 
the  effect  that  a  person  of  mature  years  could  not  be  heard 
to  stultify  himself  by  pleading  his  own  mental  incapacity 
in  avoidance  of  his  contracts,^  has  been  exploded.^  Where 
it  is  sought  to  avoid  an  act  on  the  ground  of  mental  dis- 
ability, the  burden  of  proof  of  the  fact  lies  upon  the  party 
who  alleges  it,  and,  until  the  contrary  appears,  sanity  is  to 
be  presumed.^  One  of  the  qualifications  of  this  rule  is  that 
after  a  general  derangement  has  been  shown,  it  is  then  in- 
cumbent on  the  other  side  to  show  that  the  party  who  did 
the  act  was  sane  at  the  very  time  when  it  was  performed.^ 
With  reference  to  the  contracts  of  lunatics,  prior  to  inqui- 
sition, it  may  be  stated  as  a  general  rule  that  if  there  was 
no  fraud  practiced  or  undue  advantage  taken,  and  no 
knowledge  of  the  infirmity,  the  contract,  especially  if  exe- 
cuted, will  be  upheld.  Knowledge  of  insanity  will  be  im- 
puted from  circumstances  which  would  put  a  reasonable 
and  prudent  man  upon  inquiry.^  In  Yauger  v.  Skinner  ^ 
the  court  held  that  if  the  proof  was  clear  that  an  executory 
contract  to  purchase  had  been  made  in  good  faith,  and  for 
a  full  and  fair  price,  and  the  lunacy  of  the  vendor  was 
neither  known  nor  suspected,  and  the  contract  was  after- 
ward executed  on  the  part  of  the  purchaser  without  knowl- 
edge or  belief  of  the  existence  of  the  incapacity  of  the 
grantor,  it  would  be  upheld.  Lord  Cranworth  '^  says,  as 
the  result  of  the  authorities  :  "  Dealings  of  sale  and  pur- 
chase by  a  person  apparently  sane,  though  subsequently 


'Beverley's Case, 4 Rep.  123b;  Stroud  Webster  v.  Woodford,  3  Day  (Conn.) 

V.  Marshall,  Cro.  Eliz.  398 ;  Cross  v.  90. 

Andrews,  Cro.  Eliz.    622;    Anon.    13  ^Jackson  v.  King,  4  Cowen  (N.  Y.) 

Ves.  590;  Brown  v.  Jodrell,  3  C.  &  P.  30.  207. 

■^  Grant  v.  Thompson,  4  Conn.  203  ;  *  Jackson  v.  Van  Dusen,  5  Johns.  (N. 

Mitchell  V.  Kingman,  5  Pick.   (Mass.)  Y.)  159;  S.  C.4  Am.  Dec.  330. 

431;  Rice  V.  Peet,   15  Johns.  (N.  Y.)  ^  Lincoln  v.  Buckmaster,  32  Vt.  652. 

503 ;  Lang  v.  Whidden,  2  N.  H.  435  ;  ^  14  N.  J.  Eq.  389. 

Bensell  v.  Chancellor,  5  Whart.  (Pa.)  '  Elliot  v.  Ince,  7  De  G.,  M.  &  G.475, 

378  ;  Gore  v.  Gibson,  13  M.  &  W.  623  ;  488. 


§  461  INCAPACITY    MUST    BE    SHOWX.  649 

found  to  be  insane,  will  not  be  set  aside  against  those  who 
have  dealt  with  him  on  the  faith  of  his  being  a  person  of 
competent  understanding."  Vice-Chancellor  Shadwell  has 
said  :  "  I  do  not  understand  it  to  be  denied  that  if  the  party 
treating  with  the  lunatic  knew  of  the  lunacy,  that  is  a 
fraud."  ^  In  Molton  v.  Camroux  ^  the  court  say:  "The 
rule  as  laid  down  by  Littleton  and  Coke,  has,  no  doubt,  in 
modern  times  been  relaxed,  and  unsoundness  of  mind 
would  now  be  a  good  defense  ....  if  it  could  be  shown 
that  the  defendant  was  not  of  capacity  to  contract,  and  the 
plaintiff  knew  it."  Weakness  of  understanding  is  not  of 
itself  any  objection  in  law  to  the  validity  of  a  contract. 
If  a  man  is  legally  compos  me7itis,  he  is  the  disposer  of  his 
own  property,  and  his  will  is  the  reason  for  his  actions.^ 
The  promissory  note  of  a  lunatic  given  for  valuable  con- 
sideration is  valid,  but  the  want  of  consideration  may  be 
shown,  even  against  a  bona  fide  holder  for  value.*  Especially 
where  the  insane  man  gets  the  benefit  of  the  contract,  it 
will  not  be  set  aside  in  equity,^  and  where  one  party  is  a 
monomaniac,  a  conveyance  which  has  no  connection  with 
his  morbid  condition  may  be  sustained.^ 

§  461.  What  incapacity  must  be  shown. — If  a  party  pos- 
sesses the  requisite  mental  faculties  to  transact  rationally 
the  ordinary  affairs  of  life,  he  will  not  be  relieved  from  the 
responsibility  of  the  ordinary  citizen.'  To  constitute  such 
intellectual  incapacity  to  transact  business  as  will  relieve  a 
party  from  responsibility  on  his  contracts,  "  there  must  be 
that  degree  of  mental  derangement,  or  state  of  imbecility 
of  mind,  that  induces  the  belief  that  the  party  is  incapable 
of  fully  comprehending  the  effect  and  consequences  of  his 


'  Price  V.  Berrington,  7  Hare  402.         See  Wirebach  v.  First  Nat.  Bank,  97 
-  2  Exch.  501.  Pa.  St.  543. 

^  See  Osmond  v.  Fitzroy,  3  P.  Wms.         ^  Kneedler's  Appeal,  92  Pa.  St.  428. 
129.  "  Ekin  V.  McCracken,  11  Phila.  (Pa.) 

■*  Moore  v.  Hershey,  90  Pa.  St.  196.     534. 

'  See  Titcomb  v.  Vantyle,  84  111.  371. 


650  WEAKNESS    OF    MIND.  §  462 

acts,  or,  at  least,  that  he  is  so  weak  as  to  be  almost  a  mere 
instrument  in  the  hands  of  the  person  seeking  to  obtain  the 
advantage.  On  the  contrary,  if  a  person  is  capable  of  rea- 
soning correctly  on  the  ordinary  affairs  of  life  ;  or  is  capa- 
ble of  contemplating  and  understanding  the  consequences 
which  usually  accompany  ordinary  acts,  he  will  be  held 
cojupos  mentis  and  be  bound  by  his  acts."^  The  doctrine 
that  there  must  be  a  total  deprivation  of  reason  to  vitiate 
a  contract,  was  questioned  in  the  great  case  of  Delafield  v. 
Parish.^  The  rule  is  there  stated  to  be  that  the  contracting 
party  must  have  sufficient  intellectual  capacity  to  compre- 
hend what  he  is  doing.  If  he  possess  less  than  this,  whether 
by  reason  of  general  insanity,  idiocy,  or  monomania  affect- 
ing the  particular  subject-matter  of  the  contract,  it  will  not 
be  binding  upon  him. 

§  462.  Mere  weakness  of  mind  insufficient, — Mere  imbe- 
cility or  weakness  of  mind,  whether  it  be  congenital  or  the 
result  of  disease  or  decay  of  the  faculties,  is  not,  in  the  ab- 
sence of  evidence  of  undue  advantage,  a  sufficient  ground 
for  avoiding  a  contract.  Neither  law  nor  equity  will 
*'  graduate  intellectual  differences  on  a  nicely  adjusted 
scale."  In  Dennett  v.  Dennett'^  the  fact  is  referred  to  that 
in  former  times  it  was  held  that  the  term  non  compos  mentis 
imported  a  total  deprivation  of  reason,"*  and  that  to  invali- 
date a  deed  not  a  partial  but  an  entire  loss  of  understanding 
must  be  shown,  because  the  common  law  seemed  not  to 
have  drawn  any  discriminating  line  by  which  to  determine 
how  great  the  imbecility  of  mind  must  be  to  render  a  con- 
tract void,  or  hovv  much  intellect  must  remain  to  uphold 
it.°     According  to  the  modern  rule,  business  incapacity  is 


'Baldwin    v.   Dunton,   40   111.    192.  ■'Beverley's  Case,  4   Rep.   123b;   2 

See    Hovey    v.    Chase,    52    Me.    305  ;  Mad.  Ch.  727. 

Stewart  v.  Lispenard,  26  Wend.  (N.  Y.)  =  See  Jackson  v.  King,  4  Cow.  (N. 

255.  Y.)  216;  S.  C.  15  Am.  Dec.  362,  and 

■-'  25  N.  Y,  9.  note  ;   Blauchard   v.   Nestle,  3  Denio 

«  44  N.  H.  531.  (N.  Y.)  41. 


§  462 


WEAKNESS    OF    MIND. 


6^1 


the  test.  Every  person  is  deemed  to  be  of  unsound  mind 
who  has  lost  his  memory  and  understanding  by  reason  of 
old  age,  sickness,  or  other  cause,  so  as  to  render  him  inca- 
pable of  transacting  his  business  and  of  managing  his  prop- 
erty.^ When  it  appears  that  a  grantor  had  not  the  strength 
of  mind  and  reason  to  understand  the  nature  and  conse- 
quences of  his  act  in  making  a  deed,  it  may  be  avoided  on 
the  ground  of  insanity.^  And  where  a  person  is  likely  to 
be  easily  influenced  by  others,  by  reason  of  infirmity  and 
mental  weakness  arising  from  age,  sickness,  or  other  cause, 
transactions  entered  into  by  him  without  independent  ad- 
vice, will  be  set  aside  if  there  is  any  unfairness  in  them, 
such  as  inadequacy  of  consideration.^  Unless  facts  are  in- 
troduced showing  inadequacy  of  consideration,  or  fraud  or 
imposition,  any  degree  of  imbecility  or  insanity,  short  of 
total  business  incapacity,  will  not  suffice  to  avoid  an  act  or 
contract.^  The  Supreme  Court  of  the  United  States  in 
Conley  v.  Nailor,^  after  alluding  to  Harding  v.  Handy, ^ 


'  Matter  of  Barker,  2  Johns.  Ch.  (N. 
Y.)  232.  See  Clark  v.  Fisher,  i  Paige 
(N.  Y.)  173  ;  Ex'rs  of  Converse  v.  Con- 
verse, 21  Vt.  170. 

"  Davies  v.  Grindley,  Shelf.  Lun. 
266. 

^  Allore  V.  Jewell,  94  U.  S.  506.  See 
Kempson  v.  Ashbee,  L.  R.  10  Ch.  App. 
15.  Compare  Harding  v.  Handy,  11 
Wheat.  125;  Ralston  v.  Turpin,  25 
Fed.  Rep.  12;  Griffith  v.  Godey,  113 
U.  S.  95. 

"  See  Petrie  v.  Shoemaker,  24  Wend. 
(N.  Y.)  85  ;  Person  v.  Warren,  14 
Barb.  (N.  Y.)  488  ;  Hirsch  v.  Trainer, 
3  Abb.  N.  C.  (N.  Y.)  274 ;  Darnell  v. 
Rowland,  30  Ind.  342  ;  Beller  v.  Jones, 
22  Ark.  92  ;  Henry  v.  Ritenour,  31 
Ind.  136;  Farnam  v.  Brooks,  9  Pick. 
(Mass.)  212;  Clearwater  v.  Kimler,  43 
111.  272  ;  Mann  v.  Betterly,  21  Vt.  326; 
Sheldon  v.  Harding,  44  111.  74 ;  Hen- 
derson V.  McGregor,  30  Wis.  78. 
Where  evidence  of  fraud  or  of  undue 


advantage  is  given,  imbecility  or  weak- 
ness of  mind  on  the  part  of  the  party 
defrauded  or  overreached,  may  become 
a  controlling  circumstance.  See  Dar- 
nell V.  Rowland,  30  Ind.  342  ;  Henry 
V.  Ritenour,  31  Ind.  136 ;  Taylor  v.  Pat- 
rick, I  Bibb  (Ky.)  168  ;  Seeley  v.  Price, 
14  Mich.  541.  But  where  a  contract  is 
impeached  solely  on  the  ground  of  the 
incapacity  of  one  of  the  parties  to  it, 
and  without  any  charge  of  fraud,  the 
test  of  the  capacity  is  the  ability  of 
such  party  to  comprehend  in  a  reason- 
able manner  the  nature  of  the  particu- 
lar transaction.  Proof  of  delusion  re- 
lating to  independent  subjects  is  not 
enough.  Lozear  v.  Shields,  23  N.  J. 
Eq.  509.  It  is  sufficient  if  the  mind 
fully  comprehend  the  import  of  the 
particular  act.  Hovey  v.  Hobson,  55 
Me.  256 ;  Miller  v.  Craig,  36  111.  109 ; 
Speers  v.  Sewell,  4  Bush  (Ky.)  239. 

'118  U.S.  133. 

*  1 1  Wheat.  103. 


652  lunatic's  contracts.  §  463 

and  Allore  v.  Jewell,^  say  :  "  These  cases  establish  the  prop- 
osition that  extreme  weakness  of  intellect,  even  when  not 
amounting  to  insanity,  in  the  person  executing  a  convey- 
ance, may  be  sufficient  ground  for  setting  it  aside  when 
made  upon  a  nominal  or  grossly  inadequate  consideration. 
Conceding  the  correctness  of  this  legal  proposition,  it  can 
have  no  application  to  the  present  case,  unless  the  facts  are 
substantially  the  same.  A  cursory  reading  of  the  cases  will 
show  such  a  palpable  difference  in  the  facts,  as  to  make  it 
clear  that  they  cannot  be  taken  as  controlling  authority  in 
this.  Cases  like  the  present  must  each  stand  upon  its  own 
facts,  and,  when  the  testimony  shows  that  the  grantor  was 
sober  and  capable  and  well  knew  what  he  was  doing  when 
he  executed  the  deed,  no  other  case  materially  differing  in 
its  facts  can  furnish  a  reason  for  setting  aside  the  deed  thus 
executed." 

§  463.  Lunatic's  contracts  for  necessaries. — The  law  seems 
to  be  settled  that  a  lunatic  is  liable  for  necessaries  suitable 
to  his  station.^  In  some  cases  the  recovery  is  based  upon 
a  quantum  meruit^  while  in  others  the  ground  is  taken 
that  express  contracts  of  lunatics  for  necessaries,  if  fair  and 
reasonable,  are  binding.*  In  Wentworth  v.  Tubb^  the 
court  said  :  ''Where  necessaries  are  furnished  to  a  lunatic, 
and  no  fraud  or  imposition  is  practiced  upon  him  by  the 
party  furnishing  them,  the  lunatic  is  bound  to  pay  for  them 


'  94  U.  S.  506.  3  Molloy  94 ;  McCormick  v.  Littler,  85 

-  Kendall  v.  May,  10  Allen  (Mass.)  111.  62 ;  Nelson  v.  Buncombe,  9  Beav. 

59;  La  Rue  V.  Gilkyson,  4  Pa.  St.  375 ;  211. 

Lancaster  Co.  Nat.  Bank  v.  Moore,  78  ^  Ex   parte    Northington,   37    Ala. 

Pa.   St.  407;  Ex  parte  Northington,  496;  Surles  v.  Pipkin,  69  N.  C.  513; 

37    Ala,   496  ;    Sawyer  v.    Lufkin,    56  Hallett  v.  Oakes,  i  Cush.  (Mass.)  296 ; 

Me.  308  ;  Henry  v.  Fine,  23  Ark.  417;  Nelson  v.  Duncoinbe,  9  Beav.  211. 

Richardson  v.  Strong,    13   Ired.  Law  ■*  Henry  v.  Fine,  23  Ark.  417;  Mc- 

(N.  C.)   106 ;   Van  Horn  v.  Hann,  39  Cormick  v.  Littler,  85  111.  62  ;  Richard- 

N.  J.   L.  207;    Darby  v.   Cabanne,   i  son  v.  Strong,   13  Ired.  Law   (N.  C.) 

Mo.  App.  127  ;  Baxter  v.  Earl  of  Ports-  106. 

mouth,  5  Bam,  &  C.  170;  /«  re  Persse,  *  i  N,  Y.  Leg.  Obs.  282, 


§§  464-466  ACTS    OF    LUNATIC.  653 

as  being  a  debt  due  from  him  to  such  party,  and  if  a  debt 
upon  his  decease,  his  estate  is  chargeable  with  it."^ 

§  464.  Acts  of  lunatic  after  inquisition  void.— Acts  and  con- 
tracts of  a  lunatic  after  a  formal  adjudication  of  lunacy  and 
the  appointment  of  a  guardian  or  committee,  are  utterly 
void.^  Where,  however,  the  guardianship  has  been  practi- 
cally abandoned,  or  no  guardian  has  been  actually  appoint- 
ed, or  the  guardian  has  resigned  without  a  successor  having 
been  appointed,  it  does  not  necessarily  follow  that  the  act. 
is  void.^  And  a  deed  executed  by  a  person  confined  in  an 
asylum  was  upheld,'*  where  it  appeared  that  he  seemed  to 
have  some  knowledge  and  judgment  in  relation  to  the 
transaction,  and  the  conveyance  had  been  taken  by  the 
grantees  from  kindly  motives,  with  a  view  of  carrying  out 
a  compromise  with  the  creditors. 

§  465.  Judgment  against  lunatics  under  guardianship. — A 
judgment  rendered  against  a  lunatic  under  guardianship  is 
absolutely  void,  and  may  be  set  aside  by  a  writ  audita 
querela,  the  proceedings  being  corain  noii  judice ;  and  in 
such  a  case  jurisdiction  cannot  be  acquired  by  consent.^ 

§  466.  Void  and  voidable  acts  of  lunatics. — A  struggle  sim- 
ilar to  that  in  the  law  of  infancy,  to  establish  a  voidable 
character  for  the  contracts  and  acts  of  lunatics,  is  plainly  to 
be  traced  in  the  authorities.  There  is  indeed  a  strong  in- 
clination to  place  the  acts  of  lunatics  before  office  found 
on  the  same  footing  with  those  of  infants.*'  In  general  the 
deed  of  an  insane  person  will  be  treated  as  voidable  rather 
than  void.'         

'  See  Skidmore  v.  Romaine,  2  Brad-  ^  Mohr  v.  Tulip,  40  Wis.  66 ;  Elston 

ford  (N.  Y.)  124;  Barnes  v.  Hathaway,  v.  Jasper,  45  Texas  409. 

66  Barb.  (N.  Y.)  456.  *  Selby  v.  Jackson,  13  L.  J.  Ch.  249. 

*  Fitzhugh  V.  Wilcox,  12  Barb.  (N.  *  Miller  v.  Potter,  54  Vt.  268. 

Y.)  235;    Wadsworth  v.  Sherman,  14  *  See  Ingraham  v.  Baldwin,  9  N.  Y. 

Barb.  (N.  Y.)  169  ;  Pearl  v.  McDowell,  45. 

3  J.  J.  Mar.  (Ky.)  658 ;  McCreight  v.  '  Jackson  v.  Gumaer,  2  Cow.  (N.  Y.) 

Aiken,  Rice's  (S.  C.)  Law  56;  Elston  552;    Ingraham  v.   Baldwin,  9  N.  Y. 

V.  Jasper,  45  Texas  409;   Leonard  v.  45;  Carrier  v.  Sears,  4  Allen  (Mass.) 

Leonard.  14  Pick.  (Mass.)  280.  336;  Gibson  v.  Soper,  6  Gray  (Mass.) 


654  lunatic's  deed.  §§  467,  468 

§  467.  Lunatic's  deed. — The  English  rule  seems  to  have 
been  to  regard  the  deeds  of  insane  persons  as  absolutely- 
void.*  In  Eaton  v.  Eaton,*  Scudder,  J.,  said:  "While  it 
is  doubtless  the  settled  law  in  England,  confirmed  by  act 
of  Parliament,  7  and  8  Vict.,  c.  76,  sec.  7,  that  a  convey- 
ance by  feoffment  or  other  assurance,  as  well  as  a  deed  of 
bargain  and  sale,  release  or  grant,  by  an  idiot  or  lunatic,  is 
wholly  void,  yet  the  weight  of  authority  in  this  country 
favors  the  rule  that  the  conveyance  by  deed  of  persons  of 
non-sane  mind  and  of  infants,  are  voidable  and  not  wholly 
void."  In  Van  Deusen  v.  Sweet^  it  is  expressly  held  that 
the  deed  of  a  person  non  compos  mentis  is  absolutely  void. 
The  court  observed  that  if  it  was  satisfactorily  shown  that 
the  defendant  was  totally  and  positively  incompetent  to 
execute  a  valid  deed,  the  instrument  never  had  any  exist- 
ence as  a  deed,  and  was  legally  ineffectual  and  inoperative 
to  pass  a  title  to  the  premises.  Lott,  Ch.  C,  said  :  "  It 
was  not  merely  voidable,  but  absolutely  void.  It  was  in 
fact  not  his  deed,  never  having  had  any  legal  existence  or 
vitality.  There  was,  consequently,  nothing  to  be  set  aside 
by  the  interposition  of  a  court  of  equity,  or  by  recourse  to 
an  equitable  action  ;  but  the  fact  of  its  absolute  nullity 
was  available  to  overcome  and  avoid  the  defense  set  up 
and  interposed  under  it  to  defeat  the  plaintiff's  claim  and 
title."  In  Matter  of  Desilver's  Estate,*  a  lunatic's  bargain 
and  sale  deed  was  declared  to  be  utterly  void. 

§  468.  Executory  contracts  of  lunatics. — In  general,  the 
executory  contracts  of  a  lunatic  are  much  more  readily 
avoided  than  those  Vv'hich  have  been  executed.  Thus,  in 
Musselman  v.  Cravens,^  the  court  decided  that  a  note  vol- 


279;  Wait  V,  Maxwell,  5  Pick.  (Mass.)  '  Thompson  v.   Leach,  3  Mod.  301  ; 

217  ;  Key  v.  Davis,  i  Md.  32;  Hovey  S.  C.  Ewell's  Lea.  Cas.  564. 

V.  Hobson,  53  Me.  453;  Elston  v.  Jas-  *  37  N.  J.  L.  108,  117. 

per,  45  Texas  409;   Eaton  v.  Eaton,  =■  51  N.  Y.  378,  384. 

37  N.  J.  L.  108  ;  Allen  v.  Berryhill,  27  ^  5  Rawle  (Pa.)  no. 

Iowa  540.  *  47  Ind,  i.                    , 


§  4^9  STATUTORY  PROCEEDINGS.  655 

untarily  given  as  a  subscription  to  a  college  endowment 
might  be  avoided  by  a  plea  of  insanity.  It  may  be  accepted 
as  a  general  rule  that  a  lunatic's  executory  contract  cannot 
be  enforced  against  him.  In  Van  Patton  v.  Beals^  a  luna- 
tic was  held  not  to  be  bound  by  a  note  given  for  an  antece- 
dent debt.  Again,  in  Lazell  v.  Pinnick,^  it  appeared  that 
a  party,  in  good  faith,  became  bail  for  certain  prisoners, 
relying  upon  a  memorandum  in  writing  signed  by  a  lunatic, 
agreeing  to  indemnify  him.  The  obligee  being  subse- 
quently forced  to  satisfy  the  bond,  it  was  held  that  the  con- 
tract of  indemnity  could  not  be  enforced  against  the  luna- 
tic. In  Hicks  v.  Marshall^  the  court  held  that  in  an 
action  on  a  promissory  note,  such  a  consideration  must  be 
shown  to  have  been  received,  that  justice  and  equity  would 
require  the  debt  to  be  paid  out  of  the  lunatic's  estate.* 

§  469.  Statutory  proceedings  affecting  property  of  infants 
and  of  lunatics. — In  New  York,  the  application  of  a  com- 
mittee of  a  lunatic  for  permission  to  mortgage  the  lunatic's 
real  estate  must  be  accompanied  by  a  bond,  and  a  report 
of  the  agreement  to  mortgage  must  also  be  made  to  the 
court.  If  either  of  these  prerequisites  are  neglected,  the 
mortgage  is  absolutely  void,  and  cannot  be  validated  by 
allowing  the  committee  to  file  the  bond  and  report  ntuic 
pro  ttmc.^  And  in  proceedings  by  an  administrator  to 
sell  real  estate  to  pay  debts,  in  which  the  rights  of  infants 
are  involved,  the  statute  must  be  strictly  pursued,  and  any 
substantial  departure  from  its  requirements  renders  the 
proceedings  void."  In  such  cases,  if  no  report  of  sale  is 
filed  by  the  administrator  and  confirmed  before  the  con- 


'  46  Iowa  62.        *  ^  Agricultural   Ins.   Co.  v.  Barnard, 

"^  I  Tyler  (Vt.)  247.  26  Hun   (N.  Y.)  302.     See  Bangs  v. 

'  8  Hun  (N.  Y.)  327.  Mcintosh,  23  Barb.  (N.  Y.)  591-601. 

••  See  Sentance  v.  Poole,  3  C.  &  P.  i  ;  ''  Stilwell    v.   Swarthout,    81    N.    Y. 

Dunnage   v.  White,    i    Wils.  Ch.  67;  114;    Havens    v.    Sherman,  42   Barb. 

Hall  V.  Warren,  9  Ves.  605.  (N.  Y.)  636. 


656  VOIDABLE    PURCHASES.  §  47O 

veyance  to  the  purchaser,  the  defect  is  fatal. ^  This  rule  is 
not  necessarily  limited  to  persons  under  disability,  but  is 
founded  upon  the  principle  that,  where  certain  steps  are 
authorized  by  statute  in  derogation  of  the  common  law,  by 
which  the  title  of  one  is  to  be  divested  and  transferred  to 
another,  every  requisite  of  the  statute  having  the  semblance 
of  benefit  to  the  former,  must  be  strictly  complied  wnth, 
or  the  title  will  not  pass.^  In  Matter  of  Valentine,'^  a  pro- 
ceeding for  the  sale  of  the  real  estate  of  a  lunatic.  Church, 
Ch.  J.,  said  :  "  The  petition  in  this  case  was  proper,  and 
gave  the  court  jurisdiction  to  proceed  and  determine 
the  subject-matter  involved,  but  it  conferred  jurisdiction 
to  proceed  not  according  to  the  discretion  of  the  court,  but 
in  accordance  with  the  statute.  It  was  a  special  statutory 
jurisdiction,  and  could  only  be  exercised  as  the  statute 
directs.  The  statute'*  provides  that  on  the  presenting 
of  such  petition  it  shall  be  referred,  etc.  The  referee 
is  to  examine  into  the  truth  of  the  representations  made, 
to  hear  all  parties  interested  in  such  real  estate,  and 
to  report  thereon.  In  this  case  no  reference  was  made, 
and  there  was  no  hearing  of  the  parties  interested,  and  no 
report.  We  think  that  this  requirement  is  substantial,  and 
cannot  be  dispensed  with."^ 

§  470.  Voidable  purchases  by  parties  occupying  positions 
of  trust. — Let  us  digress  from  the  consideration  of  acts 
which  are  voidable  by  reason  of  mental  imperfections  in 
the  actors,  and  notice  the  class  of  acts  which  may  be  avoided 
because  a  party,  though  sui  juris,  occupied  a  trust  position 
toward  the   subject-matter  of  the  contract.     In  Lytle  v. 


•  Rea  V.  McEachron,  13  Wend.  (N.  323 ;  Battell  v.  Torrey,  65  N.  Y.  299  ; 

Y.)  465;  Stilwell  V.  Swarthout,  81  N.  Ellwood  v.  Northrup,  106  N.  Y.  185. 
Y.  114.     See  Battell  v.  Torrey,  65  N.        ^  72  N.Y.  187. 
Y.  294.  ^  2  R.  S.  N.  Y.,  p.  54,  §  12. 

-  Atkins  V.  Kinnan,  20  Wend.  (N.  Y.)         *  See  Ellwood  v,  Northrup,  106  N. 

241,  249 ;  Sharp  v.  Speir,  4  Hill  (N.  Y.)  Y.  185. 
76 ;    Striker  v.  Kelly,  2  Denio  (N.  Y.) 


§  47°  VOIDABLE    PURCHASES.  G^J 

Beveridge,^  Allen,  J,,  delivering  the  opinion  of  the  New  ' 
York  Court  of  Appeals,  said  :  "  A  trustee,  or  one  charged 
with  the  duty  of  protecting  and  caring  for  property  as  ex- 
ecutor, trustee,  agent,  or  otherwise,  cannot  deal  with  or 
become  the  purchaser  of  it  for  his  own  advantage,  and  to 
the  prejudice  of  cestnis  que  trust,  heirs,  devisees,  or  prin- 
cipals. This  principle  is  universal,  and  applies  to  all  per- 
sons having  a  duty  to  perform  in  reference  to  a  sale,  incon- 
sistent with  the  character  of  purchaser."*  The  same  person 
cannot  be  both  party  and  judge.^  A  director  of  a  corpo- 
ration occupies  a  quasi  trust  relationship  to  the  stock- 
holders and  creditors  of  the  corporation  ;  his  character  is 
fiduciary  ;  he  is  not  at  liberty  to  abuse  the  trust  or  confi- 
dence, and  is  under  a  disability  as  to  dealings  with  the 
assets  of  the  corporation  for  his  personal  benefit.'*  The 
rule  is  "founded  upon  the  known  weakness  of  human 
nature,  and  the  peril  of  permitting  any  sort  of  collision 
between  the  personal  interests  of  the  individual  and  his 
duties  as  trustee,  in  his  fiduciary  character."^ 

In  Wardell  v.  Railroad  Company,^  Field,  J.,  said  :  "  It 
hardly  requires  argument  to  show  that  the  scheme  thus  de- 
signed to  enable  the  directors,  who  authorized  the  contract, 
to  divide  with  the  contractors  large  sums  which  should  have 
been  saved  to  the  company,  was  utterly  indefensible  and 
illecral.  Those  directors,  constituting^  the  executive  com- 
mittee  of  the  board,  were  clothed  with  power  to  manage 
the  affairs  of  the  company  for  the  benefit  of  its  stockhold- 


'  58  N.  Y.  606,  Smith  v.  Lansing,  22  N.  Y.  531  ;  Hoyle 

^  Citing  Torrey  v.  Bank  of  Orleans,  v.  Plattsburgh  &  M.  R.R.  Co.,  54  N.  Y. 

9  Paige  (N.  Y.)  649;  Bridenbecker  v.  328;  Hallam   v.   Indiaiiola  Hotel  Co., 

Lowell,  32  Barb.  (N.Y.)  9;  Dobson  v.  56  Iowa   180;  Twin   Lick  Oil  Co.  v. 

Racey,  3  Sandf.  Ch.  (N.  Y.)  60 ;  Moore  Marbury,  91  U.  S.  587. 

V.  Moore,  5  N.  Y.  256.     See  Wilson  v.  "•  Duncomb  v.  N.  Y.,  H.  &  N.  R.R. 

Jordan,  3  Woods  642.  Co.,  84  N.  Y.  199.     Citing  Davoue  v. 

'"■  Creveling  v.  Fritts,  34  N,  J.   Eq.  Fanning,  2  Johns.  Ch.  (N.  Y.)  260. 

136.  '  103  U.  S.  657.    See  Meeker  v.  Win- 

*  See  Butts  v.  Wood,  37  N.  Y.  317  ;  throp  Iron  Co.,  17  Fed.  Rep.  48. 
42 


658  ACTS    OF    EXECUTORS.  §  47 1 

*ers  and  creditors.  Their  character  as  agents  forbade  the 
exercise  of  their  powers  for  their  own  personal  ends  against 
the  interest  of  the  company.  They  were  thereby  precluded 
from  deriving  any  advantage  from  contracts,  made  by  their 
authority  as  directors,  except  through  the  company  for 
which  they  acted.  Their  position  was  one  of  great  trust, 
and  to  engage  in  any  matter  for  their  personal  advantage 
inconsistent  with  it  was  to  violate  their  duty  and  to  com- 
mit a  fraud  upon  the  company.  It  is  among  the  rudiments 
of  the  law  that  the  same  person  cannot  act  for  himself  and 
at  the  same  time,  with  respect  to  the  same  matter,  as  the 
agent  of  another  whose  interests  are  conflicting.  Thus  a 
person  cannot  be  a  purchaser  of  property  and  at  the  same 
time  the  agent  of  the  vendor Directors  of  corpora- 
tions, and  all  persons  who  stand  in  a  fiduciary  relation  to 
other  parties,  and  are  clothed  with  power  to  act  for  them, 
are  subject  to  this  rule  ;  they  are  not  permitted  to  occupy 
a  position  which  will  conflict  with  the  interest  of  parties 
they  represent  and  are  bound  to  protect.  They  cannot,  as 
agents  or  trustees,  enter  into  or  authorize  contracts  on  be- 
half of  those  for  whom  they  are  appointed  to  act,  and  then 
personally  participate  in  the  benefits."  ^ 

§  471.  Voidable  acts  of  executors  or  trustees. — A  purchase 
by  an  executor  or  trustee  is  voidable,  as  we  shall  see,  only 
at  the  instance  and  election  of  the  parties  interested  in  the 
estate.^  In  Ives  v.  Ashley,^  Chapman,  J.,  commenting 
upon  such  a  purchase,  said  :  "The  heirs  may,  within  a  rea- 
sonable time,  elect  to  avoid  it,  and  the  purchaser  is  in  such 


1  See  Thomas  v.  Brownville,  F.  K.  648  ;  Marshall  v.  Carson,  38  N.  J.  Eq. 

&  P.  R.R.  Co.,  109  U.  S.  524.  250;  Van  Epps  v.  Van  Epps,  9  Paige 

-Mercer   v.   Newsom,   23  Ga.    151;  (N.  Y.)  237 ;  Lytle  v.  Beveridge,  58  N. 

Mead  V.  Byington,  10  Vt.  116;  Staples  Y.  592;  Bennett  v.  Austin,  81   N.  Y. 

V.  Staples,,  24  Gratt.  (Va.)  225  ;  Ives  v.  308  ;  Fulton  v.  Whitney,  66  N.  Y.  548  ; 

Ashley,  97  Mass.  198;  Graff  v.  Castle-  Case  v.  Carroll,  35  N.  Y.  385  ;  Tiffany 

man,  5  Rand.  (Va.)  195  ;  S.  C.  16  Am.  v,  Clark,  58  N.  Y.  632. 

Dec.  741  ;  Myers  v.  Myers,  2  McCord's  ^  97  Mass.  198,  204. 
Ch.   (S.  C.)  214^  s.  C.  16  Am.  Dec. 


§  471  ACTS    OF    EXECUTORS.  659 

case  regarded  as  a  trustee ;  or  they  may  allow  it  to  stand, 
and  in  such  case  it  is  valid  without  any  further  act."  The 
sale  will  be  regarded  as  effectual  until  avoided.'  The  doc- 
trine that  such  a  sale  is  fraudulent /^r  se^  is  not  generally 
acknowledged.^  The  facts,  however,  to  effect  an  avoidance, 
must  bring  the  case  within  the  reason  and  spirit  of  the  rule. 
Generally  speaking,  an  administrator  has  no  concern  with, 
or  authority  or  control  over,  the  real  estate  of  his  intestate  ; 
he  assumes  no  obligations  in  reference  to  it  and  owes  no 
duty  to  the  heirs.  Hence  the  New  York  Commission  of 
Appeals  decided  that  an  administrator  was  not  precluded 
from  purchasing  at  foreclosure  sale  real  estate  formerly  be- 
longing to  the  intestate,  or  from  holding  it  absolutely  in 
his  own  right.*  It  may  be  here  observed  that,  though  a 
trustee  or  executor  acquires  the  title  to  the  property 
through  the  interposition  of  a  third  party,  this  does  not 
validate  the  transaction.  Thus,  in  Boerum  v.  Schenck,  in 
the  New  York  Court  of  Appeals,^  the  learned  Judge  Wood- 
ruff said  of  a  transaction  of  this  kind  :  "  A  trustee  or  the 
donee  of  a  power  in  trust  cannot  sell  to  himself  either 
directly  or  indirectly  ;  and  this  circuitous  mode  of  effecting 
the  transfer  of  the  legal  title  cannot  avail  for  that  purpose." 
Where  the  chain  of  title  disclosed  a  deed  from  an  executor 
to  a  third  party,  and  from  the  latter  back  to  the  individual 


'  Dunlap  V.  Mitchell,  10  Ohio  117.  "  The  principle  that  a  trustee  may  pur- 

-  See  Ely  v.  Horine,  5  Dana  (Ky.)  chase  the  trust  property  at  a  judicial 

398 ;  Sheldon  v.  Rice,  30  Mich.  296 ;  sale  brought  about   by  a  third   party, 

Miles  V.  Wheeler,  43  111.  123.  which  he  had  taken  no  part  in  procur- 

'  See  Mercer  v.  Newsom,  23  Ga.  ing,  and  over  which  he  could  not  have 
151  ;  McLane  v.  Spence,  6  Ala.  894  ;  had  control,  is  upheld  by  numerous  de- 
Mead  V.  Byington,  10  Vt.  116;  Ives  v.  cisions  of  this  court  and  of  other  courts 
Ashley,  97  Mass.  198;  Gilbert's  Ap-  of  this  country.  Prevost  v.  Gratz,  i 
peal,  78  Pa.  St.  266  ;  Staples  v.  Staples,  Pet.  C.  C.  364,  378  ;  Twin  Lick  Oil 
24  Gratt.  (Va.)  225;  Moses  v.  Moses,  Co.  v.  Marbury,  91  U.  S.  587;  Chor- 
50  Ga.  9.  penning's  Appeal,  32  Pa.  St.  31 5  ;  Fisk 

'  Hollingsworth  v.  Spaulding,  54  N.  v.  Sarber,  6  \V.  &  S.  (Pa.)  18." 
Y.  636.     In  Allen  v.  Gillette,   127  U.         '41  N.  Y.  182. 
S.  596,  Mr.  Justice  Lamar  observed : 


66o 


AGENT  S    VOIDABLE    PURCHASE. 


§  472 


who  was  executor,  it  was  considered  impossible  to  avoid 
the  inference  that  the  two  conveyances  were  one  transac- 
tion, and  that  the  trustee  acted  in  the  double  capacity  of 
seller  and  purchaser  of  the  property.  The  title  was  con- 
sidered voidable  at  the  instance  of  those  whom  the  trustee 
was  bound  to  protect,  but  whose  interests  were  endan- 
gered by  the  collision  with  his  own.^  A  purchaser  can- 
not be  forced  to  accept  a  title  in  this  condition,  especially 
after  he  has  acquired  knowledge  of  tne  facts,  and  would 
not,  therefore,  be  protected  as  one  buying  in  good  faith  and 
without  knowledge  of  the  breach  of  trust.^ 

§  472.  Agent's  voidable  purchase. — An  agent  will  not  be 
permitted  to  make  any  profit  out  of  transactions  connected 
with  his  agency,  and,  if  he  be  an  agent  to  sell  property, 
must  not  be  allowed  to  purchase  if^  This  doctrine  is  ele- 
mentary.^    So   a   man  cannot   be  agent  for  both   parties 


1  People  V.  Open  Board  of  Brokers, 
92  N.  Y.  103.  Citing  Davoue  v.  Fan- 
ning, 2  Johns.  Ch.  (N.  Y.)  252  ;  Gard- 
ner V.  Ogden,  22  N.  Y.  327  ;  Forbes  v. 
Halsey,  26  N.  Y.  53  ;  Van  Epps  v.  Van 
Epps,  9  Paige  (N.  Y.)  237  ;  Duncomb 
V.  N.  Y.,  H.  &  N.  R.R.  Co.,  84  N.  Y. 
199. 

-  Wormley  v.  Wormley,  8  Wheat. 
449.  Trustees  are  never  permitted, 
without  the  aid  of  the  court,  to  buy  the 
property  which  they  hold  as  such. 
Carson  v.  Marshall,  28  Alb.  L.  J.  418, 
419;  S.  C.  37N.  J.  Eq.  213.  See  Crevel- 
ing  V.  Fritts,  34  N.  J.  Eq.  134  ;  Romaine 
V.  Hendrickson,  27  N.J.  Eq.  162  ;  Col- 
gate V.  Colgate,  23  N.  J.  Eq.  372  ;  Mi- 
choud  V.  Girod,  4  How.  503  ;  Booraem 
V.  \yells,  19  N.  J.  Eq.  87;  Staats  v. 
Bergen,  17  N.  J.  Eq.  297  ;  S.  C.  on  ap- 
peal, Id.  554 ;  Jewett  v.  Miller,  10  N. 
Y.  402 ;  Van  Epps  v.  Van  Epps,  9 
Paige  (N.  Y.)  237 ;  Fulton  v.  Whitney, 
66  N.  Y.  548;  Bennett  v.  Austin,  81 
N.  Y.  30g,  332. 


^  Northern  Pacific  R.R.  Co.  v.  Kin- 
dred, 3  McCrary  631.  In  Whitney  v. 
Marline,  88  N.  Y.  538,  Miller,  J.,  said  : 
"  When  the  relations  of  the  contracting 
parties  are  such  that  they  do  not  deal 
on  terms  of  equality,  a  very  strict  rule 
prevails,  and  an  agent  or  trustee  who 
occupies  such  a  position  has  no  right 
to  avail  himself  of  his  superior  knowl- 
edge of  the  matter  derived  from  the 
fiduciary  relation,  or  influence  or  weak- 
ness, dependence  or  trust,  to  take  an 
unfair  advantage." 

■*  Michoud  V.  Girod,  4  How.  503  ; 
Banks  v.  Judah,  8  Conn.  145  ;  Davoue 
V.  Fanning,  2  Johns.  Ch.  (N.  Y.)  252  ; 
Barton  v.  Moss,  32  111.  50  ;  Bentley  v. 
Craven,  18  Beav.  75  ;  Moore  v.  Moore, 
5  N.  Y.  262  ;  Gardner  v.  Ogden,  22  N. 
Y.  347  ;  Cumberland  Coal  Co.  v.  Sher- 
man, 30  Barb.  (N.  Y.)  553  ;  Conkey  v. 
Bond,  36  N.  Y.  427  ;  Lewis  v.  Hillman, 
3  H.  L.  Gas.  607 ;  Cook  v.  Berlin 
Woolen  Mills,  43  Wis.  433  ;  Story  on 
Agency,  §§  210,  21 1;  Kerr  on  Fraud 


§  472  agent's  voidable  purchase.  66i 

where  judgment  or  discretion  is  to  be  exercised.^  The 
purchase  by  the  agent  of  the  principal's  property  without 
the  consent  of  the  latter  is  clearly  voidable  ;*  and  where  an 
agent  employed  to  purchase  land,  fraudulently  procures  a 
conveyance  in  his  own  name,  he  will  be  declared  a  trustee, 
and  directed  to  convey  to  his  principal.^  So,  if  an  agent 
discovers  a  defect  in  the  title  of  his  principal  to  land,  he 
cannot  misuse  the  discovery  to  acquire  the  title  for  himself ; 
if  he  do,  he  will  be  held  a  trustee  for  his  principal.''  In 
Moore  v.  Moore  ^  it  was  held  that  an  agent,  employed  to 
collect  a  mortgage  belonging  to  his  principal,  could  not  be 
allowed  either  to  purchase  personally,  or,  through  the 
agency  of  a  third  person,  for  his  own  benefit,  but  that  such 
a  purchase  would  be  regarded  as  made  for  the  benefit  of 
the  principal  at  his  election.  This  rule  is  predicated  upon 
the  principle  that  it  would  be  a  dangerous  policy  to  allow 
an  agent  to  assume  a  position  where  his  interests  would  be 
adverse  to  those  of  his  employer.  There  is  no  distinction 
in  this  regard  between  a  judicial  and  a  private  sale,  where 
the  agent  controls  it,  and  the  officer  acts  under  his  instruc- 
tions. "The  relation,"  said  Gardiner,  J.,  "existing  be- 
tween the  principal  and  his  agent,  with  the  unlimited  con- 
fidence placed  in  the  latter,  called  for  the  exercise  of  the 
most  scrupulous  integrity,  and  of  a  judgment  unbiassed  by 
his  own  personal  interest."  The  principal  contracts  for  the 
best  judgment,  skill,  and  exertions  of  the  agent  in  his  be- 
half. One  who  undertakes  to  act  for  another  in  an\-  matter 
will  not  be  permitted  to  act  for  himself  in  the  same  matter." 

&  Mistake,  174,  175  ;  £jr/ar/<?  Hughes,  508;  Robertson  v.  Western,  etc.  Ins. 

6Ves.  617.  Co.,  19  La.  227;   .s.  c.  36  Am.  Dec. 

'  Dunlop  V.  Richards,  2  E.  D.  Smith  673 ;  Florance  v.  Adams,  2  Rob.  (La.) 

(N.  Y.)  i8i  ;  N.  Y.  Central  Ins.  Co.  v.  556 ;  S.  C.  38  Am.  Dec.  226. 

Nat.  Protection  Ins.  Co.,  14  N.  Y.  85  ;  ^  Pinnock  v.  Ciough,  16  Vt.  500  ;  s. 

Vanderpoel  v.  Kearns,  2  E.  D.  Smith  c.  42  Am.  Dec.  521. 

(N.  Y.)  170.  '*  Ringo  v.  Binns,  10  Pet.  269. 

'■'  See  Switzer  v.  Skiles.  8  111.  529 ;  S.  "  5  N.  Y.  256. 

C.  44  Am.  Dec.  723 ;  Moseley  v.  Buck,  *  Bain  v.  Brown,  56  N.  Y.  2S5. 
3  Munf.  (Va.)  232  ;  s.  C.  5  Am.  Dec. 


662  PURCHASE  BY  PLEDGEE.       §§  473,  474 

It  is  only  by  a  rigid  adherence  to  this  simple  rule  that  all 
temptation  can  be  removed  from  one  acting  in  a  fiduciary 
capacity  to  abuse  his  trust,  or  seek  his  own  advantage  in 
the  position  which  it  affords  him.^ 

§  473.  Purchase  by  pledgee. — The  general  rule  is  that  the 
pledgee  cannot  purchase  the  pledge,  and,  to  take  the  case 
out  of  the  general  rule,  the  right  of  the  pledgee  to  become 
the  purchaser  must  be  given  in  very  plain  terms, ^  and  his 
right  to  purchase  must  be  assented  to  by  the  pledgor.^  In 
Roach  V.  Duckworth,^  Earl,  J.,  said  :  "  It  is  undoubtedly 
the  rule  that  the  pledgee  cannot,  at  a  sale  by  him  of  the 
property  pledged,  himself  legally  become  the  purchaser.^ 
But  the  sale  in  such  case  is  not  absolutely  void,  but  voida- 
ble only  at  the  election  of  the  pledgor.  He  may  ratify 
the  sale,  and  if  he  elects  to  do  so,  then  the  sale  becomes 
perfectly  valid  and  effectual.  If,  in  this  case,  Cornell  with- 
out fraudulent  collusion  with  Duckworth  assented  to  this 
sale,  or  with  knowledge  that  Duckworth  was  really  the 
purchaser  in  the  name  of  Croker  ratified  the  sale,  then  it 
was  effectual  and  valid  as  against  him,  and  Duckworth  be- 
came the  absolute  owner  of  the  bonds  with  a  title  as  good 
against  the  whole  w^orld  as  he  would  have  if  he  had  pur- 
chased them  at  the  time  he  took  them  in  pledge.  It  does 
"not  appear  in  the  record  whether  Cornell  did  or  did  not 
ratify  the  sale,  and  hence  the  case  may  here  be  disposed  of 
upon  the  assumption  that  the  sale  was  not  binding  upon 
him." 

§  474.  Purchase  by  attorney  of  client's  property. — As  a  gen- 
eral rule  an  attorney  will  not  be  permitted  to  purchase  his 
client's  property,  at  least  without  giving  the  latter  the  most 


'  Dutton  V.  Willner,  52  N.  Y.  318.         (N.  Y.)  649;  Hawley  v.  Cramer,  4  Cow. 

=  Hamilton   v.   Schaack,  16  Weekly     (N.  Y.)  736. 
Dig.  (N.  Y.)  423.  ■*  95  N.  Y.  401. 

'  Bryan  v.   Baldwin,  52   N.  Y.  235.         *  Citing  Bryan  v.  Baldwin,  52  N.  Y. 
See  Torrey  v.  Bank  of  Orleans,  9  Paige     232.     See  Duncomb  v.  N.  Y.,  H.  &  N. 

R.R.  Co.,  84  N.  Y.  205. 


§  474  PURCHASE  BY  ATTORNEY.  66 


J 


complete  Information,  and  placino:  him  upon  his  guard. ^ 
This  rule  is  a  necessity,  and  is  founded  upon  the  peculiarities 
of  the  relationship  of  attorney  and  client  ;  upon  the  in- 
equality between  the  contracting  parties  ;  the  habitual  ex- 
ercise of  power  on  the  one  side,  and  of  submission  on  the 
other.^  The  attorney  must  be  entirely  open  and  frank 
throughout  such  a  transaction,  or  equity  will  interfere,^  as 
the  presumption  is  against  the  attorney,^  and  there  must 
be  evidence  to  remove  or  overcome  it;^  otherwise  it  will 
be  treated  as  a  case  of  constructive  fraud. "^  The  Xcv/  York 
Court  of  Appeals  justly  say  that  the  rule  which  throws 
upon  the  attorney  the  burden  of  showing  perfect  fairness 
on  his  part  in  all  his  dealings  with  his  client,  and  which 
renders  it  almost  impossible  for  him  to  become  the  recipient 
of  a  gratuity  or  bounty  from  him,  is  based  upon  the  con- 
sideration that  the  relations  existing  between  the  parties 
are  such  that  the  attorney  has  it  in  his  power  to  avail  him- 
self of  the  necessities,  liberality,  or  credulity  of,  and  of  his 
influence  over,  the  client,  and  of  the  sense  of  dependence 
on  the  part  of  the  latter  upon  his  attorney,  which  always 
exists  to  a  greater  or  less  extent,  and  of  the  confidence 
v\^hich  the  client  reposes  in  his  attorney  ;  and  also  upon  the 
fact  that  it  is  difficult,  and  in  most  cases  impossible,  for  the 
client  to  show  that  advantage  has  been  taken  of  the  rela- 
tion.^ The  relationship  begets  the  most  unlimited  confi- 
dence,  and   to   permit   the   attorney  to   employ   it   to   the 


'  See     Rose     v.    Mynatt,    7    Yerg.  ■•  Whitehead    v.    Kennedy,     7    Hun 

(Tenn.)    30;    Leisenring    v.    Black,    5  (N.  Y.)  230;  Brock  v.  Barnes,  40  Barb. 

Watts  (Pa.)  303  ;  Hawley  v.  Cramer,  4  (N.  Y.)  521  ;  Savery  v.  King.  35   Eng. 

Cowen  (N.  Y.)  717  ;  Carter  v.  Palmer,  Law  &  Eq.  100.  104;  Ford  v.  Harring- 

8  CI.  &  F.  657  ;  Howell  v.  Baker.  4  ton.  16  N.  Y.  285. 

Johns.  Ch.  (N.  Y.)  118;  Weeks  on  At-  <>  Savery  v.  King.  35  Eng.  Law  &  Eq. 

torneys  at  Law,  §  273;  Nesbit  v.  Lock-  100,  104. 

man,  34  N.  Y.  169.  '  Jennings  v.  McConnel,  17  111.  148  ; 

'  Casborne  v.  Barsham,  2  Beav.  78.  Dunn  v.  Record,  63  Me.  17 ;  Kisling  v. 

'  See  Edwards  v.  Meyrick,  12  L.  J.  Shaw,  33  Cal.  425. 

Ch.  52;  Wood  V.  Downe,  18  Ves.  120;  '  Ford  v.  Harrington,  16  N.  Y.  289; 

Lewis  V.  Hillman,  3  H.  L.  Cas.  607.  Nesbit  v.  Lockman,  34  N.  Y.  169. 


664  PARENT    AND    CHILD.  §  475 

prejudice  of  his  client  would  be  subjecting  him  to  "  a  crush- 
ing influence."^  For  the  same  general  reasons  an  attorney 
is  not  permitted  to  purchase  the  subject-matter  of  the  liti- 
gation.^ Such  purchases  have  been  held  absolutely  void.^ 
It  can,  however,  scarcely  be  said  to  be  the  policy  of  the  law, 
to  declare  that  a  lawyer  shall  not  have  the  power  to  pur- 
chase property  from  his  client;^  on  the  contrary,  the  evi- 
dent purpose  of  the  rule  is  to  carefully  scrutinize  such 
transactions,  and  impose  upon  the  attorney  the  burden  of 
demonstrating  that  the  price  is  fair,  and  as  large  as  could 
possibly  have  been  obtained  from  a  stranger.^ 

§  475.  Transactions  between  parent  and  child. — Transac- 
tions, contracts,  and  dealings  between  parent  and  child, 
it  has  been  asserted,  are  sometimes  classed  with  those  be- 
tween attorney  and  client,  and  courts  scrutinize  such  deal- 
ings, and  interpose  to  set  aside  such  contracts  substantially 
for  the  same  reasons  in  the  one  case  as  in  the  other.^ 
The  court  in  Cowee  v.  Cornell,^  alluding  to  the  pre- 
sumption  against    transactions   where   trust  relations  ex- 


'  Miles  V.  Ervin,  I  McCord's  Ch,  (S.  of  satisfying  the  court  that  the  will  was 

C.)   524 ;  Yeamans  v.  James,  27  Kan.  the  free,  untranimeled,  and  intelligent 

207.     In  Matter  of  Will  of  Smith,  95  expression  of  the  wishes  and  intention 

N.  Y.   523,  Andrews,  J.,  said :  "  The  of  the  testatrix."     Compare  Nesbit  v. 

mere  fact,  therefore,  that  the  proponent  Lockman,    34  N.  Y.    169;    Cowee  v. 

was  the  attorney  of  the  testatrix  did  Cornell,  75  N.  Y.  100. 

not,  according  to  the  authorities  cited,  °  Hall  v.  Hallet,  i  Cox's  Eq.  134. 

create  a  presumption  against  the  va-  ^  West  v.  Raymond,  21  Ind.  305.  See 

lidity  of  the  legacy  given  by  her  will.  Harper  v.  Perry,  28  Iowa  57 ;  Simpson 

But  taking  all  the  circumstances   to-  v.  Lamb,  40  Eng.  L.  &  Eq.  59. 

gether  —  the    fiduciary    relation,    the  ■*  Hess  v.  Voss,  52  III.  472  ;  Roman 

change  of  testamentary   intention,  the  v.  Mali,  42  Md.  513. 

age,  and  mental  and  physical  condition  ^  See  Yeamans  v.   James,   27    Kan. 

of  the  decedent,  the  fact  that  the  pro-  195. 

ponent  was  the  draftsman  and  principal  *  Ford  v,  Harrington,  16  N.  Y.  292  ; 
beneficiary  under  the  will  and  took  an  i  Story's  Eq.  Jur.  §§  307-310.  See 
active  part  in  procuring  its  execution,  Cowee  v.  Cornell,  75  N.  Y.  91  ;  Car- 
and  that  the  testatrix  acted  without  in-  penter  v.  Soule,  88  N.  Y.  256;  Whit- 
dependent  advice,  a  case  was  made  ney  v.  Martine,  88  N.  Y.  538;  Matter 
which  required  explanation,  and  which  of  Will  of  Smith,  95  N.  Y.  523. 
imposed  upon  the  proponent  the  burden  '  75  N.  Y.  91,  loi. 


§  476  LEGAL    EFFECT    OF    DRUNKENNESS.  665 

ist,  say:  "The  trust  and  confidence,  or  the  superiority  on 
one  side  and  weakness  on  the  other  must  be  proved  in  each 
of  these  cases ;  the  law  docs  not  presume  them  from  the 
fact,  for  instance,  that  one  party  is  a  grandfather  and  old, 
and  the  other  a  grandson  and  young,  or  that  one  is  an 
employer  and  the  other  an  employer 

§  476.  Other  phases — Legal  effect  of  drunkenness. — It  can- 
not be  laid  down  as  a  rule  tiiat  because  a  man  is  a  drunk- 
ard he  is  of  unsound  mind.^  In  Peck  v.  Cary,*^  a  will  case, 
the  test  is  stated  to  be,  that  "  in  order  to  vitiate  the  act 
the  testator  must,  at  the  time  of  executing  the  i)aper,  have 
been  under  the  influence  of  intoxicating  liquor,  and  to  such 
a  degree  as' to  disorder  his  faculties  and  pervert  his  judg- 
ment." In  Pierce  v.  Pierce 'Mt  is  said  that  the  drunken- 
ness must  exist  "  to  such  an  extent  as  to  deprive  a  testator 
of  the  power  of  controlling  his  conduct,  and  knowing  what 
he  is  about." ^  In  Van  Wyck  v.  Brasher,^  Earl,  J.,  said: 
"A  drunkard  is  not  incompetent  like  an  idiot  or  one  gen- 
erally insane.  He  is  simply  incompetent  upon  proof  that 
at  the  time  of  the  act  challenfjed  his  understanding^  was 
clouded  or  his  reason  dethroned  by  actual  intoxication."  ** 
It  is  generally  a  question  of  fact  for  the  court  or  jury  to 
determine  whether  inebriety  has  had  the  effect  of  render- 
ing a  man's  mind  unsound,  either  permanently  or  tem- 
porarily, covering  the  time  of  the  performance  of  tiie  act 
under  consideration.^ 

Habitual  drunkenness  does  not,  as  matter  of  law,  ren- 


'  Estate  of  Johnson,  57  Cal.  529.  Down  v.  McGourkey.  15  Hun   (N.  Y.) 

^  27  N.  Y.  20.  444,  affi'd  78  N.  Y.  614. 

3  38  Mich.  417.  '  81  N.  Y.  262. 

*  See,  further,  Estate  of  Cunningham,  '''Citing  Peck  v.  Car)-,  27  N.  Y.  9; 

52  Cal.  465  ;  Duffield  v.  Morris,  2  Harr.  Gardner  v.  Gardner,  22  Wend.  (N.  Y.) 

(Del.)  375;  Nussear  v.  Arnold,  13  S.  &  526, 

R.    (Pa.)   323 ;    Brown   v.   Torrey,    24  '  Estate  of  Johnson,  57  Cal.  529 ;  S. 

Barb.  (N.  Y.)  583 ;  "Waters  v.  Cullen,  C.  2  American  Probate  Rep.  524,  and 

2  Bradf.  (N.  Y.)  354;  Key  v.  Holloway,  the   learned   note   of  Wm.  \V.   Ladd, 

7  Baxter  (Tenn.)   575 ;    s.   c.   i   Am.  Esq.,  the  editor. 
Prob.  Rep.  360,  and  note  of  the  editor  ; 


666  DELIRIUM    TREMENS.  §  4/7 

der  a  man  incapable  of  making  a  will.  No  presumption 
of  incapacity  attaches.^  A  person  adjudged  an  habitual 
drunkard,  may  even  make  a  valid  will  while  subject  to  the 
commission.  The  existence  of  the  commission  is  only 
prima  facie  evidence  of  incapacity,  which  may  be  re- 
butted.^ It  may  be  noted,  however,  that  a  greater  degree 
of  capacity  is  in  general  required  to  make  a  contract  than 
to  make  a  will.^ 

§  477.  Delirium  tremens  as  distinguished  from  drunken 
madness. — In  United  States  v.  McGlue^  the  learned  Judge 
Curtis,  in  charging  the  jury,  said:  "Although  delirium 
tremens  is  the  product  of  intemperance,  and  therefore  in 
some  sense  is  voluntarily  brought  on,  yet  it  is  distinguish- 
able, and  by  the  law  is  distinguished  from  that  madness 
which  sometimes  accompanies  drunkenness.  If  a  person 
suffering  under  delirium  tremens  is  so  far  insane  as  I  have 
described  to  be  necessary  to  render  him  irresponsible,  the 
law  does  not  punish  him  for  any  crime  he  may  commit. 
But  if  a  person  commits  a  crime  under  the  immediate  in- 
fluence of  liquor,  and  while  intoxicated,  the  law  does  pun- 
ish him,  however  mad  he  may  have  been.  It  is  no  excuse, 
but  rather  an  aggravation  of  his  offense  that  he  first  de- 
prived himself  of  his  reason  before  he  did  the  act 

It  is  an  inquiry  of  great  importance   in  this  case  .... 


'  See  Gardner  v.  Gardner,  22  Wend,  that  a  dissipated  man  cannot  make  a 

(N.  Y.)  526 ;  Lewis  v.  Jones,  50  Barb,  contract  or  execute  a  will,  nor  that  one 

(N.  Y.)  645  ;  Matter  of  Patterson,  4  who  is  in  the  habit  of  excessive  indul- 

How.  Pr.  (N.  Y.)  34 ;    Thompson  v.  gence  in  strong  drink,  must  be  wholly 

Kyner,  65  Pa.  St.  368;  Leckey  v.  Cun-  free  from  its  influence  when  performing 

ningham,    56    Pa.    St.  370;    Pierce  v.  such  acts.     If  fixed  mental  disease  has 

Pierce,  38  Mich.  412.  supervened   upon    intemperate  habits, 

'  Lewis  V.  Jones,   50  Barb.  (N.  Y.)  the  man  is  incompetent  and  irrespon- 

645.     See  Stone  v.  Damon,  12  Mass.  sible  for  his  acts.     If  he  is  so  excited 

488;Breed  V.  Pratt,  18  Pick.(Mass.)ii5.  by  present  intoxication  as  not  to  be 

"  Ritter's  Appeal,  59  Pa.  St.  9 ;  War-  master  of  himself,  his  legal  acts  are 

nock  V.  Campbell,  25  N.  J.  Eq.  485  ;  void,  though  he  may  be  responsible  for 

Butler  V.   Mulvihill,   i  Bligh    137.     In  his  crimes."     See,  further.  Turner  v. 

Peck  V.  Gary,  27  N.  Y.  23,  Chief  Jus-  Cheesman,  15  N.  J.  Eq.  243. 

tice   Denio   said:  "It   is  not  the  law  •*  Curtis' C.  C.  12. 


§  47^  DURESS.  667 

whether  this  homicide  was  committed  while  the  prisoner 
was  suffering  under  that  marked  and  settled  disease  of  de- 
lirium tremens,  or  in  a  fit  of  drunken  madness."'  So  a 
marriage  will  not  be  rendered  void  because  entered  into 
while  the  party  was  Intoxicated,  while  insanity  from  de- 
lirium tremens  produced  by  intoxication  will  avoid  it."'^ 

§  478.  Duress  ;  its  nature  and  classes. — Cases  in  which  acts 
are  avoided  for  duress  not  infrequently  command  the  atten- 
tion of  the  courts.  Duress,  in  its  more  extended  sense, 
signifies  that  degree  of  severity,  either  threatened  or  im- 
pending, or  actually  inflicted,  which  is  sufiicient  to  over- 
come the  mind  and  will  of  a  person  of  ordinary  firmness.^ 
When  the  contract  is  made  under  such  circumstances  it  is 
said  to  be  void,^  which  generally  means  that  it  may  be 
avoided.  The  common  law  has  divided  duress  into  two 
classes,  namely,  duress  of  imprisonment,  and  duress  per 
minas.  It  may  be  observed  at  the  outset  that  it  is  not 
duress  for  a  party  to  insist  upon  his  legal  rights.^ 

Where  a  woman  was  induced  to  do  an  act  under  a  repre- 
sentation that  it  was  the  only  thing  that  would  save  her  son 
from  imprisonment,  or  the  act  was  induced  by  threats  of 
suicide  on  his  part,  this  was  held,  in  the  New  York  Court 
of  Appeals,  not  to  be  duress  in  a  legal  sense, "^  But,  on  the 
other  hand,  a  promissory  note  obtained  from  a  married 
woman  by  duress,  though  it  falsely  stated  that  it  was  given 


'  See,  further,  United  States  V.  Drew,  which  a  contract  is  voidable,  consists 

5  Mason  28 ;  United  States  v.  Forbes,  cither  in  violence  to  the  person,  or  in 

Crabbe  558;  Bennett  v.  State,  Mart.  &  threatened  violence  of  the  same  char- 

Yerg.  (Tenn.)  133;  Carter  v.  State,  12  acter  '  duress /«•;-  minas.'     It  will  not 

Texas  500;  Bales  v.  State,  3  W.  Va.  be  enough  if  the  safety  of  a  man's  house 

685;  People  V.  Rogers,  18  N.  Y.  9.  or  goods  only  be  threatened,  and  the 

'  See  Clement  v.  Mattison,  3   Rich,  fear  caused  must  be,  as  has  been  said. 

Law  (S.  C.)  93.  '  not  a  vain  fear  but  such  as  may  befall 

'Fellows  V.  School  District,  39  Me.  a  constant  man";  '7>am'  iimort's  justa 

561.  cxcusatio  fiofi  est.'"     Holland's  Juris- 

■*  Burr  V.  Burton,  18  Ark.  214.  prudence,  p.  200. 

'"  McPherson  v.   Cox,  86  N.  V.  478.  °  Metropolitan  Life  Ins.  Co.  v.  Meek- 

"  Duress,  wliich  is  another  ground  on  er,  85  N.  Y.  614. 


668  DURESS  OF  GOODS.  §  47Q 

for  the  benefit  of  her  separate  estate,  cannot  be  enforced, 
even  in  the  hands  of  a  bona  fide  holder  for  value.-^  In 
Baker  v.  Morton,^  Mr.  Justice  Clifford  observed  :  "Actual 
violence  is  not  necessary  to  constitute  duress  even  at  com- 
mon law,  as  understood  in  the  parent  country,  because  con- 
sent is  the  very  essence  of  a  contract,  and  if  there  be  com- 
pulsion there  is  no  consent,  and  it  is  well-settled  law  that 
moral  compulsion,  such  as  that  produced  by  threats  to  take 
life  or  to  inflict  great  bodily  harm,  as  well  as  that  produced 
by  imprisonment,  is  sufficient  to  destroy  free  agency,  with- 
out which  there  can  be  no  contract,  as  in  that  state  of  the 
case  there  is  no  consent.^  Where  a  party  enters  into  a  con- 
tract for  fear  of  loss  of  life,  or  for  fear  of  loss  of  limb,  or 
fear  of  mayhem,  or  for  fear  of  imprisonment,  the  contract 
is  as  clearly  void  as  when  it  was  procured  by  duress  of 
imprisonment,  which  is  where  there  is  an  arrest  for  an 
improper  purpose  without  just  cause,  or  where  there  is  an 
arrest  for  a  just  cause  but  without  lawful  authority,  or  for 
a  just  cause  but  for  an  unlawful  purpose,  and  the  rule  is 
that  in  either  of  those  events  the  party  arrested,  if  he  was 
thereby  induced  to  enter  into  a  contract,  may  avoid  it  as 
one  procured  by  duress." 

§  479.  Duress  of  goods. — Money  paid  under  duress  of 
goods  may  be  recovered  back  ;  such  payments  cannot  be 
regarded  as  voluntary.^  Where  a  person  gets  possession  of 
a  deed,  and,  by  threatening  to  destroy  it,  extorts  money 
from  another  who  is  interested  in  it,  the  payment  so  made 
is  involuntary,  and  the  money  may  be  recovered  back.^    An 


'  Loomis  V.  Ruck,  56  N.  Y.  462.  ern  Steamship  Co.,  74  N.  Y.  125  ;  Shaw 

'^  12  Wall.  150,  157.  V.  Woodcock,  7  Barn.  &  C.  73 ;  Briggs 

^  Citing  Chitty  on  Contracts  192;  2  v.  Boyd,  56  N.  Y.  293;  Cook  v.  City  of 

Greenl.  Ev.  283  ;  Co.  Second  Inst.  482  ;  Boston,  9  Allen  (Mass.)  393 ;  McPher- 

2Rolle'sAbr.  124;  Richardson  v.  Dun-  son  v.  Cox,  86  N.  Y.  472;  Benson  v. 

can,  3  N.  H.  508;  Watkins  v.  Baird,  6  Monroe,  7  Cush.  (Mass.)  125.    See  note 

Mass.  511.  to  London  &  N.  W.  Ry.  Co.  v.  Ever- 

*  Scholey  v.  Mumford,  60  N,  Y.  498 ;  shed,  24  Moak's  Eng.  Rep.  634. 

Baldwin  v.  Liverpool  and  Great  West-  ^  Motz  v.  Mitchell,  91  Pa.  St.  114. 


§  479       '       DURESS  OF  GOODS.  669 

important  principle  must  be  noticed  in  this  connection.  In 
Chandler  v.  Sanger^  it  was  held  that  money  paid  by  a  party 
to  free  his  goods  from  an  attachment  levied  for  the  purpose 
of  extorting  money,  by  a  person  who  knew  he  had  no  cause 
of  action,  could  be  recovered  back  in  assumpsit  for  money 
had  and  received,  "  without  proof  of  such  a  termination  of 
the  former  suit  as  would  be  necessary  to  maintain  an  action 
for  malicious  prosecution."^ 

In  Harmony  V.  Bingham,"  Ruggles,  J.,  said:  "When  a 
party  is  compelled,  by  duress  of  his  person  or  goods,  to  pay 
money  for  which  he  is  not  liable,  it  is  not  voluntary  but 
compulsory.  Where  the  owner's  goods  are  unjustly  de- 
tained on  pretence  of  a  lien  which  does  not  exist,  he  may 
have  such  an  immediate  want  of  his  goods  that  an  action 
at  law  will  not  answer  his  purpose.  The  delay  may  be  more 
disadvantageous  than  the  loss  of  the  sum  demanded.  The 
owner,  in  such  case,  ought  not  to  be  subjected  to  the  one 
or  the  other,  and,  to  avoid  the  inconvenience  or  loss,  he 
may  pay  the  money,  relying  on  his  legal  remedy  to  get  it 
back  again."  Where  a  person  who  paid  tolls  to  a  naviga- 
tion company  denied  at  the  time  of  payment  its  right  to 
exact  the  tolls,  and  paid  them  only  because  the  company 
threatened,  in  case  of  non-payment,  to  stop  his  business, 
which  it  was  able  to  do,  it  was  held  that  the  payment  was 
not  voluntary,  and  that  the  amount  paid  could  be  recovered 
back  if  the  tolls  were  unlawfully  exacted.*  W^here  a  pawn- 
broker refused  to  deliver  pawned  plate  except  upon  pay- 
ment of  excessive  interest,  and  the  owner  paid  it  to  obtain 
his  property,  he  was  allowed  to  recover  back  the  excess.* 


'  114  Mass.  365.  well    v.   Peden,   3   Watts   (Pa.)    328: 
'  See  Watkins  v,  Baird,  6  Mass.  506;  Cadaval  v.  Collins,  4  Adol.  &  El.  858  ; 
Shaw,  C.  J.,  in  Preston  v.  Boston,  12  S.  C.  6  Nev.  &  Man.  324  ;  Gates  v.  Hud- 
Pick.  (Mass.)  7,   14;   Benson  v.  Mon-  son,  6  Exch.  348. 
roe,  7  Cush.  (Mass.)   125-131 ;  Carew  •''  12  N.  Y,  116. 

V.  Rutherford,  xo6  Mass.  i,  11,  et  scq.;  ^  Lehi<;h  Coal  Co.  v.  Brown,  100  Pa. 

Richardson  v.  Duncan,  3  N.  H.   508;  St.  33S ;  S.  C.  27  Alb.  L.  J.  499. 

Sartwell  v.  Horton,  28  Vt.  370;  Col-  '■•  Astley  v.  Reynolds,  2  Slra.  915. 


6-0  INVOLUNTARY    PAYMENTS.  §§  480,  48 1 

An  action  will  lie  to  recover  back  money  paid  for  goods 
unlawfully  detained  under  a  pretended  lien,^  or  money 
wrongfully  exacted  by  a  corporation  as  a  condition  of  per- 
mitting a  transfer  of  stock.^ 

§  480.  Involuntary  payments. — The  Supreme  Court  of 
the  United  States  say,  that  to  constitute  coercion  or  duress 
sufficient  to  render  a  payment  involuntary,  there  must  be 
some  actual  or  threatened  exercise  of  power  possessed,  or 
believed  to  be  possessed,  by  the  party  exacting  or  receiv- 
ing the  payment,  over  the  person  or  property  of  the  other, 
from  which  the  latter  has  no  other  means  of  immediate 
relief  than  by  making  the  payment.^  And,  it  is  stated  in 
the  Court  of  Appeals  of  Maryland,  that  "  a  payment  is 
not  to  be  regarded  as  compulsory  unless  made  to  eman- 
cipate the  person  or  property  from  an  actual  and  existing 
duress,  imposed  upon  it  by  the  party  to  whom  the  money 
IS  paid. 

§481.  Undue  influence.— "  What  is  known  in  English 
law  as  '  undue  influence' is  also  held  to  make  a  contract 
voidable.^  This  consists  in  acts  which,  though  not  fraudu- 
lent, amount  to  an  abuse  of  the  power,  which  circumstances 
have  mven  to  the  will  of  one  individual  over  that  of  an- 
other.  In  some  relations,  such  as  that  of  solicitor  and 
client,  or  parent  and  child,  the  existence  of  this  exceptional 
power  is  often  presumed,  but  its  existence  is  capable  of 
being  proved  in  other  cases  also."  ^  A  conveyance  obtained 
by  one  person  from  another,  where  advantage  is  taken  of 

'  Ashmole  v.  Wainvvright,  2  Ad.  &  Tillinghast,  18  Cal.  265;  Mays  v.  Cin- 

El.  (N.  S.)  837  ;  Harmony  v.  Bingham,  cinnati,  i  Ohio  St.  268  ;  Fleetwood  v. 

12  N.  Y.  109,  116;  Briggs  v.  Boyd,  56  City  of  New  York,  2  Sandf.  (N.  Y.) 

N.  Y.  293.  475;  Harmony  v.  Bingham,  12  N.  Y. 

^  Bates  V.  N.  Y.  Ins.  Co.,  3  Johns.  112. 

Cas.  (N.  Y.)  238.  '  Davis  v.  Calvert,  5  Gill  &  J.  (Md.) 

^  Radich   v.     Hutchins,    95    U.    S.  269 ;  Eckert  v.  Flowry,  43  Pa.  St.  46 ; 

213.  Conley  v.  Nailor,  118  U.  S.  135. 

*  Mayor  of  Baltimore  V.  Lefferman,  4  ^Holland's    Jurisprudence,    p.    200. 

Gill    (Md.)   436.      See    Brumagim   v.  See  §  13,  note. 


§  481  UNDUE    INFLUENCE.  67 1 

the  latter's  weakness  or  clouded  or  enfeebled  faculties,  will 
not  be  sustained  by  a  court  of  equity.  But  it  is  not  suffi- 
cient to  suggest  mere  weakness  or  indiscretion  of  the  party 
conveying;  it  must  be  shown  that  there  was  fraud  in  the 
party  contracting,  or  some  undue  means  made  use  of  to 
control  that  weakness;  and,  in  such  case,  though  fraud  be 
found,  it  does  not  necessarily  follow  in  ecjuity  that  the 
deed  must  be  absolutely  set  aside  as  void  ;  it  may  be  al- 
lowed to  stand  as  security  for  whatever  amount,  if  any, 
may  be  found  to  have  been  actually  due  between  the  par- 
ties.^ In  order  to  avoid  a  grant  on  the  ground  of  undue 
influence,  it  must  be  shown  that  the  influence  existed,  and 
was  exercised  for  an  undue  and  disadvantageous  purpose. 
The  cause  of  the  weakness  of  mind  is  not  material.  It 
may  be  from  duress,  general  imbecility,  accidental  de- 
pression, constitutional  despondency,  or  the  result  of  sud- 
den fear  or  apprehension. 

"  Undue  influence,"  said  Andrews,  J.,^  "which  is  a  spe- 
cies of  fraud,  when  relied  upon  to  annul  a  transaction  inter 
partes,  or  a  testamentary  disposition,  must  be  proved,  and 
cannot  be  presumed.  But  the  relation  in  which  the  par- 
ties to  a  transaction  stand  to  each  other,  is  often  a  material 
circumstance  and  may  of  itself  in  some  cases  be  sufficient 
to  raise  a  presumption  of  its  existence."  In  the  cele- 
brated case  of  Marx  v.  McGlynn,^  Earl,  J.,  uses  these 
words  :  *'  Undue  influence  may  be  exercised  1)\-  {>hysical 
coercion  or  by  threats  of  personal  harm  and  duress,  by 
which  a  person  is  compelled,  really  against  his  will,  to  make 
a  testamentary  disposition  of  iiis  property.  That  kind  of 
undue  influence  can  never  be  presumed.  It  must  be  shown 
by  evidence  legitimately  proving  the  facts,  ami  where  it  is 
established  the  will  cannot  be  admitted  to  probate,  for  the 


'  Anthony  v.  Hutchins,  10  R.  I.  165.         ^  88  N.  Y.  370.     See  Lodcr  v.  Whelp- 
See  §§  192-195.  ley,  m  N.  Y.  250. 
^  MatterofV^illofSmith,95N.Y.522. 


672  UNDUE    INFLUENCE.  §  48 1 

reason  that  it  is  not  the  will  of  the  testator.  There  is  an- 
other kind  of  undue  influence  more  common  than  that  just 
referred  to,  and  that  is  where  the  mind  and  the  will  of  the 
testator  has  been  overpowered  and  subjected  to  the  will  of 
another,  so  that  while  the  testator  willingly  and  intelligently 
executed  a  will,  yet  it  was  really  the  will  of  another,  in- 
duced by  the  overpowering  influence  exercised  upon  a 
weak  or  impaired  mind.  Such  a  will  may  be  procured  by 
working  upon  the  fears  or  the  hopes  of  a  weak-minded 
person  ;  by  artful  and  cunning  contrivances  ;  by  constant 
pressure,  persuasion,  and  effort,  so  that  the  mind  of  the  tes- 
tator is  not  left  free  to  act  intelligently  and  understanding- 
Iv.  It  is  not  sufficient,  however,  for  the  purpose  of  estab- 
lishing undue  influence,  to  show  that  the  will  is  the  result 
of  affection  or  gratitude,  or  the  persuasion  which  a  friend 
or  relative  may  legitimately  use ;  but  the  influence  must  be 
such  as  to  overpower  and  subject  the  will  of  the  testator, 
thus  producing  a  disposition  of  property  which  the  testator 
would  not  have  made  if  left  freely  to  act  his  own  pleasure, 
and  this  kind  of  influence  will  not  generally  be  presumed, 
but  must  be  proved  like  any  other  fact  by  him  who  alleges 
It. 

Whenever  one  party  is  so  situated  as  to  exercise  a  con- 
trollinof  influence  over  the  will,  conduct,  and  interests  of 
another,  contracts  then  made  will  be  set  aside,  even  upon 
slight  evidence  of  the  improper  exercise  of  such  influence.^ 


1  The  People  v.  Young  Men's,  etc.  v.  Barsham,  2  Beav.  76 ;  Dent  v.  Ben- 
Society,  65  Barb.  (N.  Y.)  357.  See  nett,  7  Simons  539;  Eadie  v.  Slim- 
Sears  V.  Shafer,  6  N.  Y.  268  ;  Casborne    mon,  26  N.  Y.  9. 


CHAPTER    III. 


RATIFICATION    OR    AFFIRMANCE    OF    VOIDABLE    ACTS. 


1 482.  Affirmance  of  voidable  acts. 

483.  Knowledge  essential  to  ratifica- 

tion— Effect. 

484.  Affirmance  of  executors'  voida- 

ble acts. 

485.  Receipt  of  proceeds  of  sale  un- 

der protest. 

486.  Executor's  title. 

487.  Avoidance  a  personal  right. 

488.  Ratification  of  infant's  voidable 

act. 


I  489.  No  ratification  of  void  act. 

490.  Ratifying  void  bill  of  lading. 

491.  Facts  insufficient   to  constitute 

ratification  by  acquiescence. 

492.  Lord  Tenterden's  Act. 

493.  Affirmance  by  retention  of  the 

property. 

494.  Affirmance   of  voidable   corpo- 

rate acts. 

495.  Affirmance  effected  by  laches. 


§  482.  Affirmance  of  voidable  acts. — Ratification  of  the 
unauthorized  act  of  another  operates  upon  the  act  ratified 
precisely  the  same  as  though  the  authority  to  do  the  act 
had  been  previously  given. ^  It  is,  in  other  words,  equiva- 
lent to  a  prior  authorization.*^  Huis  the  act  of  one  assum- 
ing to  be  an  agent,  but  done  without  authority,  may  be 
ratified,  and  in  such  case  the  liability  of  the  principal  arises 
from  the  ratification.^  It  follows  that  a  ratification  can 
only  be  made  when  the  party  ratifying  possesses  the  power 
to  perform  the  act  ratified.''     In  order  to  operate  as  a  con- 


'  Cook  v.  Tullis,  18  Wall.  332. 

"^  Sheldon  H.  B.  Co.  v.  Eickemeyer 
H.  B.  M.  Co..  90N.  Y.  613. 

=  Conrad  v.  Abbott,  132  Mass.  331. 
See 'Clement  v.  Jones,  12  Mass.  60; 
Pratt  v.  Putnam,  13  Mass.  361 ;  Fisher 
V.  Willard,  13  Mass.  379;  Emerson  v. 
Newbury,  13  Pick.  (Mass.)  377;  Shaw 
v.  Nudd,  8  Picjc.  (Mass.)  9;  Hewes  v. 
Parkman,  20  Pick.  (Mass.)  90. 

*  Marsh  v.  Fulton  Co.,  lo  Wall.  683. 
43 


In  this  case  Mr,  Justice  Field  remarked  : 
"  It  is  also  contended  thai  if  the  bonds 
in  suit  were  issued  without  authority 
their  issue  was  subsequently  ratified, 
and  various  acts  of  the  supervisors  of 
the  county  are  cited  in  support  of  the 
supposed  ratification.  Tlitsc  acts  fall 
very  far  short  of  showing  any  attempted 
ratification  even  by  the  suijcrvisors. 
But  the  answer  to  them  all  is  that  the 
power  of  ratification  did  not  lie  with 


6/4  RATIFICATION.  §  483 

firmation,  the  act  of  the  party  must  be  intended  to  be  a 
direct  recognition  and  acknowledgment  of  the  validity  of 
the  transfer,  and  not  the  result  of  a  mere  collateral  agree- 
ment.^ It  is  said  that  there  are  three  ways  of  affirming  the 
voidable  contract  of  an  infant :  First,  by  an  express  ratifi- 
cation ;  second,  by  the  performance  of  acts  from  which  an 
affirmance  may  reasonably  be  implied  ;  and  thirdly,  by  the 
omission  to  disaffirm  within  a  reasonable  time.^ 

§  483.  Knowledge  essential  to  ratification— Effect. — The 
rule  that  a  ratification  of  an  unauthorized  act  of  an  agent, 
to  be  binding,  must  be  made  with  full  knowledge  of  the 
facts,  is  sound  in  principle  and  firmly  established  by  au- 
thority.^ Confirmation  and  ratification  imply  to  legal 
minds  knowledge  of  the  defects  in  the  act  to  be  confirmed, 
and  of  the  right  to  reject  or  ratify  it.^  Hence  a  cestui  que 
trust,  against  whom  it  is  sought  to  establish  a  ratification, 
must  not  only  have  been  acquainted  with  the  facts,  but 
must  also  have  been  apprised  of  the  law  as  to  how  those 


the  supervisors.     A  ratification  is,  in  sions  of  approval,  or  in  some  other  in- 

its   effect   upon  the  act  of  an  agent,  direct  viray,  give  validity  to  acts,  when 

equivalent  to  the  possession  by  him  of  they  were  directly  in  terms  prohibited 

a  previous  authority.    It  operates  upon  by  statute  from  doing  those  acts  until 

the  act  ratified  in  the  same  manner  as  after  such  vote  was  had.     That  would 

though  the  authority  of  the  agent  to  do  be  equivalent  to  saying  that  an  agent, 

the  act  existed  originally.     It  follows  not  having  the  power  to  do  a  particular 

that  a  ratification  can  only  be  made  act  for  his  principal,  could  give  validity 

when  the  party  ratifying  possesses  the  to   such   act   by  its  indirect  recogni- 

power  to  perform  the  act  ratified.    The  tion." 

supervisors  possessed  no  authority  to  '  Stout  v.  Stout,  TJ  Ind.  537. 

make    the    subscription   or  issue   the  -  Kline  v.  Beebe,  6  Conn.  494. 

bonds  in  the  first  instance  without  the  ''McClelland   v.  Whiteley,    15  Fed. 

previous  sanction  of  the  qualified  voters  Rep.  327  ;  Owings  v.  Hull,  9  Pet.  607  ; 

of  the  county.    The  supervisors  in  that  Combs  v.  Scott,  1 2  Allen  (Mass.)  493  ; 

particular  were  the  mere  agents  of  the  Pittsburgh  &  S.  R.R.  Co.  v.  Gazzam, 

county.      They    could    not,   therefore,  32  Pa.  St.  340.     See  Craighead  v.  Pe- 

ratify  a  subscription  without  a  vote  of  terson,  72  N.  Y.  279;  Yellow  Jacket 

the    county,   because   they   could   not  S.  M.  Co.  v.  Stevenson,  5   Nev.  224; 

make  a  subscription   in   the   first   in-  Oilman,  C.  &  S.  R.R.  Co.  v,  Kelly,  "j"] 

stance  without  such  authorization.     It  III.  426. 

would  be  absurd  to  say  that  they  could,  •'Adair  v.  Brimmer,  74  N.  Y.  554. 

without  such  vote,  by  simple  expres-  See  Ritch  v.  Smith,  82  N.  Y.  627. 


§4^4  executors'  voidable  acts.  675 

facts  would  have  been  dealt  with  by  a  court  of  equity. 
And  all  that  is  implied  in  the  act  of  ratification,  when  set 
up  in  equity  by  a  trustee  against  his  cestui  que  trust,  must 
be  proved,  and  will  not  be  assumed.  The  maxim,  '' igno- 
rantia  legis  exctisat  nemijiem^'  cannot  be  invoked  in  such 
a  case.  Proof  must  be  adduced  that  the  cestui  qitc  tj-nst 
was  apprised  of  his  legal  rights.^  In  Benninghoff  v.  Agri- 
cultural Insurance  Company,"  Ruger,  Ch.  J.,  made  use  of 
this  language  :  "  It  is  essential  to  the  validity  of  an  act 
which  is  claimed  to  have  been  authorized  by  a  subsequent 
ratification  thereof,  that  the  principal  should  have  had  full 
knowledge  of  the  circumstances  attending  the  performance 
of  the  act  of  the  assumed  agent  at  the  time  of  such  ratifi- 
cation." In  a  recent  case  Gray,  J.,  remarked  :  "  Ratifica- 
tion implies  a  knowledge  of  the  circumstances,  and  of  the 
right  to  reject  or  ratify."^  The  maxim,  ''  oinnis  I'atihabitio 
retroti'ahitur  et  mandato  piHori  cBquiparatur^'  is  fre- 
quently invoked  by  parties  claiming  the  benefits  of  a  rati- 
fication, and  asserting  that  it  has  the  same  effect  as  a  prior 
command.^  It  may  be  noted  that  the  law  does  not  admit 
of  a  ratification  which  will  defeat  the  intervening  rights  of 
third  parties,  and  that  it  does  not  matter  whether  the  third 
party  is  an  individual  or  a  corporation.^ 

§  484.  Affirmance  of  executors'  voidable  acts. — In   Pease 
V.  Creque*^  it  appeared   that  a  deed  of  real  property  had 

'  Adair  v.  Brimmer,  74  N.  Y.  554.  erland,  3  El.  &  B.  i ;  Fag-an  x.  Harri- 

See  Cumberland  Coal  Co.  v.  Sherman,  son,  8  C.  B.  388;  Foster  v.   Bates,  ra 

30  Barb.  (N.  Y.)  575  ;  Lammot  V.  Bow-  M.   &   W.    226;    Heslop  v.  Baker,  8 

ly,  6  H.  &  J.  (Md.)  526.  Exch.  417;    Robinson   v.  Gleadow,  2 

-  93  N.  Y.  501.  Bing.  N.  C.  156,  161. 

'  King  V.  Mackellar,  109  N.  Y.  223.  ^  See  Consolidated  Frtiit  Jar  Co.  v. 

Citing  Nixon  v.  Palmer,  8  N.  Y.  398 ;  Bellaire  Stamping  Co.,  27   Fed".  Rep. 

Baldwin   v.   Burrows,  47    N.  Y.    199;  382;  Wood   v.   McCain,  7   AJa.  800 ; 

Adair  V.  Brimmer,  74  N.Y.  554;  Whit-  Stoddard  v.  United   States,.  4  Ct.  of 

ney  v.  Martine,  88  N.  Y.  535.  540.  Claims  511;  Doe  d.  Lyster  v.  Goldwin, 

••  See  Broom's  Legal  Maxims,  p.  866 ;  2  Q.  B.  143 ;  Doe  d.  Mann  v.  Walters. 

Co.  Litt.  207^;;  Simpson  V.  Eggington,  10  Barn.  &  C.  626;  Cook  v.  Tullis.  i3 

10  Exch.  845  ;  Earl  of  MountcashcU  v.  WaJl.  33.^. 

Barber,  14  C.  B.  53;  Maclae  v.  Suth-  *  15  Weekly  Digest  (N.Y.)  15. 


6/6  PROCEEDS    OF    SALE.  §  485 

been  made  by  executors  to  one  of  themselves.  The  court 
appHed  the  familiar  rule  that  the  deed  was  not  abso- 
lutely void,  but  merely  voidable  at  the  election  of  the  leg- 
atees under  the  v^ill.*  It  appearing  that  one  of  the  lega- 
tees, with  full  knowledge  of  the  facts,  had  received  the 
proceeds  of  the  sale  in  payment  of  his  legacy,  this  accept- 
ance of  the  money  was  held  to  be  an  affirmance  and  ratifi- 
cation of  the  deed  to  the  executor,  and  the  court  ruled  that 
the  legatee  could  not  be  allowed  thereafter  to  avoid  the 
transfer  to  the  prejudice  of  a  mortgagee  who,  relying  upon 
such  ratification,**  had  loaned  money  upon  the  land.  The 
beneficiary  or  cestui  que  trust  in  such  a  transaction,  may,  if 
sui  juris,  elect  to  hold  the  trustee  to  the  consequences  of  his 
act;^  and  where  no  legal  incapacity  is  shown  in  the  ben- 
eficiary, and  he  has  full  knowledge  of  all  the  facts,  and  is 
wholly  free  from  any  undue  influence  arising  out  of  the 
peculiar  trust  relations  of  the  parties,  a  clear  and  unequiv- 
ocal afifirmance  of  the  sale  may  conclude  him.  "  Ordinarily, 
the  acceptance  of  the  money,  with  full  knowledge  and  by 
persons  free  from  disability,  would  be  such  an  affirmance." 
This  is  especially  so  as  regards  third  parties  who  have  ad- 
vanced moneys  or  acquired  rights  upon  the  faith  of  the 
acquiescence.  In  such  a  case  an  element  of  estoppel  is  in- 
troduced. 

§  485.  Receipt  of  proceeds  of  sale  under  protest. — As  be- 
tween the  immediate  parties,  however,  it  seems,  according 
to  some  of  the  authorities,  that  the  act  is  open  to  explana- 
tion, and,  where  the  proceeds  of  such  a  sale  or  disposition 
of  the  property  are  merely  received  under  protest,  and  with 
an  express  reservation  of  the  right  to  controvert  the  valid- 


'  See  Van  Epps  v.  Van  Epps,  9  Paige         '^  See  Boerum  v.  Schenck,  41  N.  Y, 
(N.  Y.)  238  ;  Fulton  v.  Whitney,  66  N.     182. 

Y.  548;  Bennett  v.  Austin,  81  N.  Y.  '  Boerum  v.  Schenck,  41  N.  Y.  182; 
308;  Welch  V.  McGrath,  59  Iowa  519;  Lingke  v.  Wilkinson,  57  N.  Y.  452; 
s.  C.  26  Alb.  L.  J,  540.  Second  National  Bank  v.  Burt,  93  N. 

Y.  249. 


§  4^6  executor's  title.  677 

ity  of  the  sale,  such  action  was  held  not  to  estop  or  pre- 
clude a  subsequent  proceeding  by  the  beneficiary  to  dis- 
affirm the  transaction,  and  obtain  a  resale.  A  receipt 
given  under  these  circumstances  was  held  by  the  New  York 
Court  of  Appeals  to  possess  none  of  the  characteristics  of 
an  estoppel.  It  is  a  mere  consent  to  receive  the  money 
claimed  to  be  the  proceeds  of  a  valid  sale,  reserving  the 
right  to  contest  the  question  of  validity,  or,  excluding  the 
otherwise  apparent  and  implied  intent  thereby  to  affirm 
such  validity.  It  admits  nothing  ;  it  misleads  no  one  ;  it 
can  work  no  fraud  upon  any  person.  Not  one  of  the  req- 
uisites of  an  equitable  estoppel,  or  estoppel  in  pais,  can 
be  found  in  it.^  Such  is  the  argument  advanced.  The 
principle  seems  novel,  that  a  beneficiary  can  receive  the 
purchase-money,  as  the  proceeds  of  a  valid  sale,  and  also 
be  allowed  to  set  aside  the  sale  as  invalid.  This  result  con- 
flicts with  the  spirit  of  the  familiar  rule  that  a  rescission  or 
disaffirmance  must  be  in  toto.  Probably  the  true  theory  is 
that  the  beneficiary  is  entitled  to  rescue  so  much  of  the 
estate  from  the  dishonest  trustee,  instead  of  being  forced 
to  rely  upon  his  personal  responsibility. 

§  486.  Executor's  title. — An  executor  who  has  made  a 
sale  of  property  belonging  to  his  trust  estate  to  one  who 
may  acquire  a  good  title  to  it,  may  buy  the  property  from 
him,  and  thereby  acquire  the  title  of  such  purchaser.^  So 
held  in  Silverthorn  v.  McKinster,^  where  the  executors  sold 
the  property  to  one  Burns,  from  whom  one  of  the  execu- 
tors subsequently  purchased  it.  The  court  said  :  "  As,  then, 
....  Burns  was  by  the  sale  invested  with  an  estate  recog- 
nized by  our  laws,  there  was  nothing  to  hinder  him  from 
selling  and  conveying  it  to  whomsoever  he  plcascil.  Nor 
is  there  anything  in  the  law  or  the  transaction  itself  to  pro- 


'  Boerum     v.    Schenck,    41     N.    Y.         '  Welch  v.  McGrath.  59  Iowa  519 ; 
182.  S.  C.  26  Alb.  L.  J.  540. 

8  12  Pa.  St.  71. 


678  AVOIDANCE    A    PERSONAL    RIGHT.  §  487 

hibit  Isaac  Silvcrthorn  (the  executor)  from  becoming  the 
purchaser.  There  is  no  suggestion  of  mala  fides  in  the  sale 
made  by  the  executors  to  Burns,  and  it  is  clear  that,  in  the 
absence  of  fraud,  one  who  has  sold  an  estate  as  a  trustee 
may  afterwards  fairly  re-purchase  it  for  himself."^  There 
is  no  distinction  between  a  purchase  made  by  a  trustee  in- 
vested with  the  legal  title  at  a  sale  made  by  him  pursuant 
to  the  trust  and  a  like  purchase  by  one  having  a  power  in 
trust  merely,  at  a  sale  made  by  virtue  of  such  power  in 
trust.  The  same  reasons  for  holding  the  purchases  voidable 
at  the  election  of  the  beneficiaries  are  equally  applicable  to 
both  sales,  and  the  same  rule  should  be  applied.  Nor  does 
the  right  of  the  beneficiaries  to  repudiate  the  transaction 
rest  upon  proof  of  actual  intent  to  cheat  or  defraud. 
Neither  uprightness  of  intention  nor  the  payment  of  a  fair 
or  adequate  price  or  consideration  will  overcome  the  im- 
pediment. While  the  chief  design  of  the  rule  is  to  shield 
and  protect  the  beneficiaries  from  the  fraud  or  bad  faith  of 
the  trustee,  yet  the  peculiar  relation  of  the  parties  renders 
it  unsafe  and  imprudent  to  allow  any  exception  to  it. 

§  487.  Avoidance  a  personal  right. — The  rule  is  not  con- 
fined to  trustees  or  others  who  hold  the  legal  title  to  the 
property  to  be  sold,  but  applies  universally  to  all  who  come 
within  its  principle,  which  is,  that  no  party  can  be  permit- 
ted to  purchase  an  interest  in  property,  and  hold  it  for  his 
own  benefit,  where  he  has  a  duty  to  perform  in  relation  to 
such  property  which  is  inconsistent  with  the  character  of  a 
purchaser  on  his  own  account.^   The  right  to  elect  to  avoid 

'  Citing  Painter  v.  Henderson,  7  Pa.  sell,  as  trustee,  whether  at  public  auc- 

St.  48.  tion  or  private  sale,  is  voidable  at  the 

-Fulton  V.  Whitney,  66  N.  Y.  548;  election  of  the  beneficiaries  of  the  trust ; 
Bennett  v.  Austin,  81  N.  Y.  308-322.  and  this  rule  will  be  enforced  without 
In  Scholle  v.  SchoUe,  loi  N.  Y.  171,  regard  to  the  question  of  good  faith  or 
Earl,  J.,  said  :  "  The  general  rule  is  not  adequacy  of  price,  and  whether  the 
disputed  that  the  purchase  by  a  trustee  trustee  has  or  has  not  a  personal  inter- 
directly  or  indirectly  of  any  part  of  a  est  in  the  same  property.  Nor  is  it 
trust  estate  which  he  is  empowered  to  sufficient  to  enable  a  trustee  to  make 


MS; 


AVOIDANCE    A    PERSONAL    RIGHT. 


679 


the  sale,  however,  is  the  exclusive  privilege  of  the  ccsttii  que 
trust  or  beneficiary,  just  as  the  defense  of  infancy,  or  the 
right  to  avoid  a  contract  on  the  ground  of  infancy,  is  the 
exclusive  privilege  of  the  infant.  A  stranger  cannot  inter- 
fere to  avoid  the  sale.^  In  Beardsley  v.  Hotchkiss,**  Earl, 
J.,  said:  "As  to  contracts  purely  executory  it  must  be 
shown  that  the  infant  ratified  them  after  he  became  of  age 
before  they  can  be  enforced  against  him.  As  to  contracts 
executed,  such  as  deeds  of  land  or  conveyances  of  personal 
property,  they  will  generally  be  deemed  to  be  ratified,  and 
will  thus  become  just  as  valid  and  effectual  as  the  contracts 
of  an  adult,  unless  they  be  disaffirmed  by  the  infant  before 
he  arrives  at  age,  or  within  a  reasonable  time  thereafter. 


such  a  purchase  that  the  formal  leave 
to  buy,  which  is  usually  granted  to  the 
parties  in  a  foreclosure  or  partition 
sale,  has  been  inserted  in  the  judgment. 
Such  a  provision  is  inserted  merely  to 
obviate  the  technical  rule  that  parties 
to  the  action  cannot  buy,  and  is  not  in- 
tended to  determine  equities  between 
the  parties  to  the  action,  or  between 
such  parties  and  others  (Fulton  v. 
Whitney,  66  N.  Y.  548;  Torrey  v. 
Bank  of  Orleans,  9  Paige  [N.  Y.]  649 ; 
Conger  v.  Ring,  11  Barb.  [N.  Y.]  356). 
But  where  the  trustee  has  an  interest 
to  protect  by  bidding  at  the  sale  of  the 
trust  property,  and  he  makes  special 
application  to  the  court  for  permission 
to  bid,  which,  upon  the  hearing  of  all 
the  parties  interested,  is  granted  by  the 
court,  then  he  can  make  a  purchase 
which  is  valid  and  binding  upon  all  the 
parties  interested,  and  under  which  he 
can  obtain  a  perfect  title.  (De  Caters  v. 
De  Chaumont,  3  Paige  [N.Y.]  178  ;  Gal- 
latian  v.  Cunningham,  8  Cow.  [N.  Y.] 
361  ;  Davoue  v.  Fanning,  2  Johns.  Ch. 
[N.  Y,]  251  ;  Bergen  v.  Bennett,  i  Cai. 
Cas.  in  Error  [N.  Y.]  i,  20;  Chapin  v. 
Weed,  I  Clarke's  Ch.  [N.  Y.]  464.  469  : 
Colgate's  Exr.  v.  Colgate,  23  N.  J.  Eq. 


372;  Froneberger  v.  Lewis,  79  N.  C. 
426;  Faucett  v.  Faucett,  i  Bush  [Ky.] 
511;  Michoud  V.  Girod,  4  How.  503; 
Campbell  v.  Walker,  5  Ves.  Jr.  678  ; 
Farmer  v.  Dean,  32  Beav.  327  ;  Potter's 
Willard's  Eq.  Jur.  607;  Lewin  on 
Trusts  [7th  ed.]  443 ;  Godefroi  on 
Trusts,  184).  Here,  upon  notice  to  all 
the  beneficiaries,  an  order  was  made 
allowing  these  appellants  to  bid.  After 
they  had  made  their  bids  and  signed 
the  terms  of  sale,  a  further  hearing  was 
had  upon  notice  to  all  the  parties  as  to 
the  fairness  of  the  sales  and  the  ade- 
quacy of  the  prices,  and  the  sales  were 
approved  and  confirmed  by  the  court. 
Under  such  circumstances  there  can  be 
no  doubt  that  these  appellants  would 
get  a  good  and  perfect  title  to  the  lands 
purchased  by  them,  and  their  title 
would  be  good,  not  only  as  against  all 
the  living  parties  to  the  suit,  but  as 
against  unborn  grandchildren,  if  any 
such  should  herealter  come  into  being. 
(Code  of  Civ.  Pro..  §§  1 557.  1 577-)" 

'  See  Jackson  v.  Van  Dalfsen,  5 
Johns.  (N.  Y.)  43  ;  Lothrop  v.  Wight- 
man,  41  Pa.  St.  297  ;  Litchfield  v.  Cud- 
worth,  15  Pick.  (Mass.)  24. 

-  96  N.  Y.  211. 


68o  RATIFICATION    OF    VOIDABLE    ACT.  §  488 

She  did  not  disaffirm  the  contract  in  her  life-time,  and  left 
it  in  full  force  at  her  death.  Nor  even  if  they  could,  did 
her  husband  or  children  disaffirm  it  after  her  death.  There 
is  no  rule  of  law  which  will  allow  her  husband's  assignees 
or  his  creditors  to  disaffirm  it.  The  defense  of  infancy  is 
for  the  benefit  and  protection  of  infants,  and  other  persons 
cannot  set  it  up  for  their  own  benefit."  It  seems  to  be 
reasonable,  and  the  authorities  hold  that  where  the  sale  of 
the  property  is  precipitated  by  a  violation  or  omission  of  a 
duty  which  rests  upon  a  party  in  respect  to  the  property  of 
another,  the  person  guilty  of  the  breach  of  duty  is  abso- 
lutely disqualified  from  becoming  a  purchaser  on  his  own 
account.^ 

§  488.  Ratification  of  infant's  voidable  act. — The  onus  of 
showing  a  ratification  rests  upon  the  party  asserting  it.^  It 
may  be  stated  as  a  general  principle,  deducible  from  the 
leading  case  of  Whitney  v.  Dutch, ^  that  the  terms  of  the 
ratification  by  an  infant  need  not  be  such  as  to  impose  a 
direct  promise  to  pay.  All  that  is  necessary  is  that  he 
should  expressly  agree  to  ratify  his  contract,  not  by  doubt- 
ful acts  such  as  payment  of  part  of  the  money  due  or  the 
interest,  but  by  words,  oral  or  in  writing,  which  import  a 
recognition  and  a  confirmation  of  his  promise.  Hence  it 
was  held  in  the  case  just  cited,  that  where  the  defendant, 
when  called  upon  to  pay  the  demand,  acknowledged  that 
the  money  was  due,  and  promised  that  he  would  endeavor 
to  procure  the  money  on  his  return  home,  this  was  suffi- 
cient to  justify  a  finding  of  a  jury  that  he  assented  to  and 
ratified  the  original  promise.  Zouch  v.  Parsons^  is  referred 
to  in  Whitney  v.  Dutch,  and  Chief-Justice  Parker  said  that 
the  rule  stated  by  Lord  Mansfield  in  that  case,  to  the  effect 
that  whenever  the  act  done  may  be  for  the  benefit  of  the 
infant,  it  shall  not   be  considered  void,  but  that  he  shall 


'  Bennett  v.  Austin,  81  N.  Y.  308.  ^  14  Mass.  457;   S.  C.  7  Am.  Dec. 

-  Walsh  V.  Powers,  43  N.  Y.  26.  229,  and  note  p.  234. 

■*  3  Burr.  1804. 


§  4^9  NO    RATIFICATION    OF    VOID    ACTS.  68 1 

have  his  election  when  he  comes  of  age,  to  affirm  or  avoid 
it,  is  the  only  clear  and  definite  proposition  that  can  be  ex- 
tracted from  the  authorities.^  Where  an  infant  made  a 
mortgage  of  his  land  and  after  coming  of  age  conveyed  the 
land  subject  to  the  mortgage,  the  deed  was  holden  to  con- 
firm and  make  good  the  mortgage.^ 

§  489.  No  ratification  of  void  acts. — As  elsewhere  shown, 
it  is  held  in  a  great  number  of  cases  that  an  infant's  power 
of  attorney  is  absolutely  void.^  Authorities  following  this 
ruling  out  to  its  legitimate  results  may  be  found  in  this 
country  and  in  England.  Thus  Parke,  B.,  referring  to  an 
infant's  appointment  of  an  agent,  said  :  "  It  does  not  bind 
the  infant,  neither  does  his  ratification  bind  him.''  ^  So,  in 
Trueblood  v.  Trueblood,^  an  infant's  bond  signed  by  his 
agent  was  declared. void.  Perkins,  J.,  said  :  "  The  bond  of 
his  [the  infant's]  agent,  or  one  having  assumed  to  act  as 
such,  is  void,  and  not  capable  of  being  ratified";^  ^nd  a 
void  deed  cannot  be  confirmed.''  It  may  be  asserted  as  a 
general  rule  that  "  no  number  of  subsequent  promises  to 
pay  can  infuse  vitality  into  a  contract  originally  void  by 
the  policy  of  the  law."®  Thus  where  A.  agreed  to  pay  B. 
one-half  of  the  profits  of  an  office  if  B.  would  withdraw  as 
an  applicant,  and  after  A.  was  appointed  the  promise  was 
renewed,  it  was  held  that  the  new  promise  was  void.^  So 
a  promise  to  pay  a  bill  for  lobbying  services  is  void  though 
made  after  the  rendition  of  the  services.'"     And  where  A. 


'  See  §450.     A  deed  of  land  by  an  '8  Ind.  198. 

insane  person  is  voidable  only  and  not  '  See  Hicstand    v.   Kuns,   8  Blackf. 

void,  and  may  therefore  be  ratified  by  (Ind.)    348  ;   Cummings   v.    Powell,   8 

him  when  he  is  of  sane  mind.    Wait  v.  Texas  88. 

Maxwell,  5  Pick.  (Mass.)  217  ;  Arnold  '  Chess  v.  Chess,  i  P,  &  W.  (Pa.)  32  ; 

V.    Richmond    Iron    Works,    i    Gray  S.  C  21  Am.  Dec.  350. 

(Mass.)  434.  "  Firemen's  Charitable  Ass'n  v.  Berg- 

•^  Boston    Bank    v.    Chamberlin,    15  haus,  13  La.  Ann.  209,  210. 

Mass.  220.  *  Hunter  v.  Nolf,  71  Pa.  St.  282. 

»  See  §  454.  '"  McKee  v.  Cheney.  52  How.  Pr.  (N. 

*  Doe  (i.  Thomas  v.  Roberts,  16  M.  Y.)  144.     See  Lyon  v.  Mitchell,  36  N. 

&  W.  778.  Y.  241. 


682  VOID    BILL    OF    LADING.  §§  49O,  49 1 

withdrew  his  candidacy  in  favor  of  B.,  who  agreed  to  pay 
his  expenses  thus  far  incurred  and  the  expenses  that  might 
be  thereafter  incurred  in  running  for  another  office,  a  prom- 
ise of  payment  made  after  the  election  was  considered 
void.'' 

§  490.  Ratifying  void  bill  of  lading. — A  bill  of  lading  signed 
by  an  agent,  when  no  goods  have  been  received  for  ship- 
ment, is  not  considered  binding  upon  the  principal.^  It 
does  not  follow,  however,  that  the  principal  is  not  bound 
by  the  bill  of  lading  if  the  goods  be  in  fact  subsequently 
delivered  to  be  transported  according  to  the  terms  of  the 
contract.  There  is  no  element  of  illegality  in  the  contract 
or  any  such  vice  that  it  is  void  and  incapable  of  confirma- 
tion by  acts  of  the  parties  done  for  that  purpose  ;  and  the 
old  bill  of  lading  is  as  good  as  a  new  one  issued  on  delivery 
of  the  goods  if  the  parties  choose  to  make  it  so.^ 

§  491.  Facts  insufficient  to  constitute  ratification  by  acquies- 
cence.— As  a  general  rule  simply  remaining  passive  and 
silent,  if  not  for  an  unreasonable  length  of  time,  cannot  be 
construed  into  an  acquiescence  in  or  ratification  of  a  void- 
able act.^  This  question  came  up  in  a  recent  case  before 
the  New  York  Court  of  Appeals.  Chief-Justice  Church 
said  :  "  Mere  acquiescence  for  three  years  after  arriving  at 
age,  without  any  affirmative  act,  was  not  a  ratification."^ 
In  Boody  v.  McKenney,^  the  court,  in  speaking  of  affirm- 
ance or  disaffirmance  by  an  infant,  said  :  "  The  mere  acqui- 


'  Robinson  v.  Kalbfleisch,  5  T.  &  C.  Co.,  16  Fed.  Rep.  60.     See  The  Idaho, 

(N.  Y.)  212.  93  U.  S.  575. 

°  Pollard   V.  Vinton,   105    U.   S,   7  ;         ■•  Baker  v.  Disbrow,  3  Redfield  (N. 

Iron  Mountain  Railway  v.  Knight,  122  Y.)  360;  Pinckney  v.  Pinckney,  2  Rich. 

U.  S.  87  ;  Schooner  Freeman  v.  Buck-  Eq.  (S.  C.)  219. 

ingham,  18  How.  182 ;  contra,  Armour        ^  Green  v.  Green,  69  N.  Y,  557  ;  be- 

V.  Mich.  Central  R.R.  Co.,  65  N.  Y.  low,  7  Hun  (N.  Y.)  492,  and  see  cases 

III ;  Bank  of  Batavia  v.  New  York,  L.  cited  in  opinion  of  Gilbert,  J.,  and  in 

E.  &  W.  R.R.  Co.,  106  N.  Y.  195.  the  dissenting  opinion  of  Smith,  J.  Com- 

^  Robinson  v.  Memphis  &  C.  R.R.  pare  Sparman  v.  Keim,  83  N.  Y.  245. 

*  23  Me.  523. 


§  492  LORD    TENTERDEN's    ACT.  683 

escence  for  3^ears  to  disaffirm  it,  affords  no  proof  of  a  rati- 
fication. Tiiere  must  be  some  positive  and  clear  act  per- 
formed for  tiiat  purpose.  The  reason  is,  that  by  his  silent 
acquiescence  he  occasions  no  injury  to  other  persons,  and 
secures  no  benefits  or  new  rights  to  himself.  There  is 
nothing  to  urge  him  as  a  duty  toward  others  to  act  speed- 
ily. Language  appropriate  in  other  cases  requiring  him  to 
act  within  a  reasonable  time,  would  become  inappropriate 
here.  He  may,  therefore,  after  years  of  acquiescence,  by 
an  entry  or  by  a  conveyance  of  the  estate  to  another  per- 
son, disaffirm  and  avoid  the  conveyance  made  during  his 
infancy."  ^  But  a  retention  of  the  property,  and  an  omis- 
sion to  disaffirm  within  a  reasonable  time  after  arriving  at 
the  age  of  twenty-one  years,  will  operate  as  an  affirmance 
of  the  contract,  and  constitute  an  answer  to  the  defense  of 
infancy.^ 

§  492.  Lord  Tenterden's  Act. — An  infant  though  allowed 
as  a  personal  privilege  the  right  to  avoid  certain  of  his  acts 
or  contracts  on  the  ground  of  lack  of  experience  and  ab- 
sence of  judgment  and  discretion  at  the  time  of  entering 
into  them,  may,  when  he  reaches  mature  years,  at  the 
promptings  of  interest  or  conscience,  affirm,  assume,  or 
ratify  such  acts.  The  voidable  acts  so  ratified  constitute  a 
sufficient  consideration  for  the  new  promise.  Exactly  what 
should  be  considered  a  sufficient  ratification  or  new  prom- 
ise has  led  to  much  discussion  and  conflict  of  opinion  in 
the  cases.  With  a  view  of  settling  the  discussion,  Lord 
Tenterden's  act  was  passed,  providing  that  "  no  action  shall 
be  maintained  whereby  to  charge  any  person  upon  any 
promise  made  after  full  age  to  pay  any  debt  contracted 
during  infancy,  or  upon  any  ratification  after  full  age  of 


'Citing    Jackson    v.    Carpenter,    11  •'Walsh    v.    Powers.  43   N.  Y.   26; 

Johns.  (N.  Y.)  539;  Curtin  v.  Patten,  Kline  v.  Beebe,  6  Conn.  494 ;  Cecil  v. 

II  S.  &  R.  (Pa.)  311  ;  Tucker  v.  More-  Salisbur)',  2  Vernon  224. 
land,  10  Peters  58. 


684  AFFIRMANCE  BY  RETENTION.  §  493 

any  promise  or  simple  contract  made  during  infancy,  unless 
such  promise  or  ratification  shall  be  made  by  some  writing 
signed  by  the  party  to  be  charged  therewith."  ^  Statutory 
provisions  practically  modelled  upon  this  act  may  be  found 
in  some  of  our  States.^ 

§  493.  Affirmance  by  retention  of  the  property. — Nelson,  J., 
in  Delano  v.  Blake, ^  said  :  "  The  purchase  by  an  infant  of 
real  estate  is  voidable,  but  it  vests  in  him  the  freehold  until 
he  disagrees  to  it,  and  the  continuance  in  possession  after 
he  arrives  of  age  is  an  implied  confirmation  of  the  contract."* 
So,  in  the  case  of  a  lease  to  an  infant,  the  continuance  in 
possession  after  the  party  becomes  of  age  is  a  confirmation, 
and  he  must  pay  the  rent.^  Ratification  of  a  conveyance  is 
a  ratification  of  a  mortgage  made  to  secure  payment  of  the 
purchase-money.^  Davies,  J.,  in  Henry  v.  Root,''  learnedly 
discusses  the  principles  applicable  to  an  infant's  affirmance 
of  a  contract  to  purchase  land.  It  appeared  that  the  infant 
had  purchased  real  estate,  and  had  retained  possession  of  it 
after  reaching  his  majority,  and  yet  by  interposing  a  plea  of 
infancy  sought  to  avoid  payment  of  the  purchase-money.^ 
This  case,  it  may  be  observed,  must  be  carefully  distin- 
guished from  those  elsewhere  cited,  to  the  effect  that  where 
the  infant  has  wasted  the  consideration  or  avails  of  the 


'  Stat.  9  Geo.  IV.,  c.  14,  §  5  (1828).  '  Bac.    Ab.    tit.    Infant,    611,    612  ; 

-  See,  e.  g.,  Thurlow  v.  Gilmore,  40  Holmes  v.  Blogg,  8  Taunt.  35. 

Me.  378.  '  Young  v.  McKee,  13  Mich.  552. 

^  II  Wend.  (N.  Y.)  86.     See  Henry  '  33  N.  Y.  526. 

V.  Root,  33  N.  Y.  551.  '  The  principle  is  firmly  established 

■*  See  Flinn  v.  Powers,  36  How.  Pr.  that  the  infant  on  attaining  full  age 

(N.  Y.)  298  ;  S.  C.  below,  53  How.  Pr.  cannot  hold  onto  the  purchase  and  thus 

(N.  Y.)  279 ;  S.  C.  54  Barb.  (N.  Y.)  550 ;  affirm  it,  and  plead  his  infancy  to  avoid 

rev'd  sub  nomine,   Walsh  v.  Powers,  the  payment  of  the  ])urchase-money. 

43  N.  Y.  26 ;  Lynde  v.  Budd,  2  Paige  Henry  v.  Root,  33  N.  Y.  553 ;  Kline  v. 

(N.  Y.)  191;  Lawson  V.  Lovejoy,  8  Me.  Beebe,  6  Conn.  494;  Bigelow  v.  Kin- 

405  ;  Boody  v.  McKenney,  23  Me.  517  ;  ney,  3  Vt.  353  ;  Cheshire  v.  Barrett,  4 

Robinson  v.  Hoskins,   14   Bush  (Ky.)  McCord's  (S.  C.)  Law  241  ;  Lynde  v. 

393.  Budd,  2  Paige  (N.  Y.)  191  ;  Badger  v. 

Phinney,  15  Mass.  359. 


§  493  AFFIRMANCE  BY  RETENTION.  685 

property,  his  right  of  disaffirmance  or  avoidance  is  not  lost. 
Here  the  infant  sought  to  retain  possession  of  the  property, 
and  repudiate  payment  of  the  purchase-monc}'.  In  other 
words,  he  tried  to  use  his  privilege  as  a  sword.  The  argu- 
ment was  adopted  in  this  case,  that  the  contracts  of  infants 
were  voidable  as  distinguished  from  void,  and  were  only 
suspended  during  his  minority,  and  might  be  revived  and 
ratified  by  him  on  arriving  at  age,  upon  the  same  princi- 
ples, and  for  the  same  reasons,  and  by  the  same  means  as  a 
debt  barred  by  the  statute  of  limitations  may  be  revived 
and  restored  to  its  pristine  vigor  and  efficacv.^ 

A  new  promise,  positive  and  precise,  equivalent  to  a 
new  contract,  is  not  now  essential ;  but  a  ratification  or 
confirmation  of  what  was  done  during  minority  is  sufficient 
to  make  the  contract  obligatory.  These  words  "  ratify  " 
or  "confirm"  necessarily  import  that  there  was  something 
in  existence  to  which  ratification  or  confirmation  could 
attach,  entirely  ignoring,  therefore,  the  notion  that  an  in- 


'  See  Stone  v.  Wythipol,  Cro.  Eliz.  principle  that  the  obligations  of  the  in- 
126 ;  Morning  v.  Knop,  Cro.  EHz.  700;  fant  were  void,  and  that  on  his  attain- 
Thrupp  V.  Fielder,  2  Esp.  628.  This  ing  his  majority  he  was  as  much  dis- 
action  was  assumpsit,  and  plaintiff  charged  from  them  on  tliat  ground  as 
proved  payment  of  £40  on  account  a  bankrupt  is  by  his  discharge  under 
of  the  bill  since  defendant  came  of  age,  the  bankrupt  or  insolvent  laws.  See 
and  contended  that  this  admission  by  Rogers  v.  Hurd,  4  Day  (Conn.)  57; 
the  defendant  of  his  liability  to  pay  was  Benham  v.  Bishop,  9  Conn.  333  ;  Wil- 
tantamount  to  a  new  promise.  Lord  cox  v.  Roath,  12  Conn.  550;  Smith  v. 
Kenyon  said:  "This  is  not  such  a  Mayo,  9  Mass.  62.  In  Whitney  v. 
promise  as  satisfies  the  issue.  The  case  Dutch,  14  Mass.  460,  Chief-Justice 
of  infancy  differs  from  the  statute  of  Parker  said:  "  Bui  tho  temis  uf  the  rati- 
limitations ;  in  the  latter  case  a  bare  fication  need  not  be  such  as  to  import 
acknowledgment  has  been  held  to  be  a  direct  promise  to  pay.  All  that  is 
sufficient.  In  the  case  of  an  infant  I  necessary  is  that  he  expressly  agrees  to 
shall  hold  an  acknowledgment  not  to  ratify  his  contract,  not  by  doubtful  acts, 
be  sufficient,  and  require  proof  of  an  ....  but  by  words,  oral  or  in  writing, 
express  promise  to  pay,  made  by  the  which  import  a  recognition  and  a  con- 
infant  after  he  has  attained  that  age  firmation  of  his  promise."  See  Thnmp- 
when  the  law  presumes  that  he  has  dis-  son  v.  Lay,  4  Pick.  (Mass.)  48  ;  Reed 
cretion."  The  court  in  Henry  v.  Root,  v.  Batchelder,  I  Mrtc.  (.Mass.)  559: 
33  N.  Y.  540,  observes,  however,  that  Hall  v.  Gerrish,  8  N.  H.  374;  Robbins 
cases    like   this   proceeded   upon    the  v.  Eaton,  10  N.  H.  561. 


686  AFFIRMANCE    OF    CORPORATE    ACTS,  §  494 

fant's  obligations  or  contracts  were  discharged  or  extin- 
guished by  reason  of  the  state  of  infancy.^ 

§  494.  Affirmance  of  voidable  corporate  acts. — The  doc- 
trine of  equitable  estoppel  applies  as  well  to  members 
of  a  corporate  body  as  to  persons  acting  in  a  private 
capacity.^  In  the  case  just  cited  in  the  New  York  Court 
of  Appeals,  it  appeared  that  a  corporation  had  transferred 
all  its  property,  thus  rendering  it  practically  impossible 
for  the  corporation  to  continue  the  business  for  which  it 
was  originally  incorporated,  and  inflicting  upon  it  virtual 
political  death.  It  was  contended  that  the  act  was  lUtra 
vires.  The  court,  Tracy,  J.,  delivering  the  opinion,  said  : 
"  The  act  was  not  illegal.  In  transferring  the  property  of 
the  corporation  to  pay  its  debt  the  trustees  believed  that 
they  were  acting  within  the  scope  of  their  authority,  and 
the  defendant  accepted  the  transfer  and  received  the  prop- 
erty in  satisfaction  of  its  claim  against  the  plaintiff,  in  the 
honest  belief  that  it  thereby  acquired  good  title  thereto. 
If  the  trustees  had  no  power,  as  the  agents  of  the  corpora- 
tion, to  transfer  all  its  property,  thereby  depriving  it  of 
the  means  of  carrying  on  the  business  for  which  it  was  or- 
ganized, it  is  but  the  case  of  an  agent  making  a  contract 
in  excess  of  his  authority.  The  act  is  voidable,  not  void. 
The  principal  may,  nevertheless,  affirm  the  act,  and  a  rati- 
fication is  equivalent  to  a  prior  authorization.  If  all  the 
stockholders  of  this  corporation  had,  with  full  knowledge, 
subsequently  ratified  the  transfer  and  affirmed  the  settle- 
ment, the  act,  though  beyond  the  power  given  the  trustees 
by  the  charter,  could  not  be  subsequently  avoided  by  the 
stockholders  or  by  the  corporation."  Thus,  in  Kent  v.  The 
Quicksilv'Cr  Mining  Company,^  it  was  held  that  the  acts  of 


1  Henry  v.  Root,  33  N.  Y.  545.  ^  78  N.  Y.  159.     See  Sheldon  H.  B. 

'  Sheldon  H.  B.  Co.  v.  Eickemeyer  Co.  v.  Eickemeyer  H.  B.  M.  Co.,  90 

H.  B.  M.  Co.,  90  N.  Y.  613.     See  2  N.  Y.  612. 
Story's  Eq.  Jur.  §  1 539. 


§  495       AFFIRMANCE  EFFECTED  BV  LACHES.         687 

a  corporation  which  are  not  per  se  illegal,  or  mahnit  pro- 
hibihim,  but  which  are  2iltra  vires,  affecting,  however, 
only  the  interests  of  the  stockholders,  may  be  made  good 
by  the  assent  of  the  stockholders,  so  that  a  stranger  to 
them,  dealing  in  good  faith  with  the  corporation,  will  be 
protected  in  a  reliance  on  these  acts.  A  municipal  corpo- 
ration may  adopt  and  ratify  a  contract  made  by  its  engineer 
in  excess  of  his  authority.^ 

A  subsequent  ratification  cannot  make  valid  an  unlawful 
act  beyond  the  scope  of  corporate  authority.  An  absolute 
excess  of  authority  by  the  officers  of  a  corporation,  in  vio- 
lation of  law,  cannot  be  upheld,  and  where  the  officers  of 
such  a  body  fail  to  pursue  the  strict  requirements  of  a  stat- 
utory enactment,  under  which  they  are  acting,  the  corpo- 
ration is  not  bound.  In  such  cases  the  statute  must  be 
strictly  followed  ;  and  a  person  who  deals  with  a  municipal 
body  is  obliged  to  see  that  its  charter  has  been  fully  com- 
plied with.  When  this  is  not  done,  no  subsequent  act  can 
make  the  contract  effective.^ 

§  495.  Affirmance  effected  by  laches. — In  Smallcombe's 
Case,'^  Lord  Romilly,  Master  of  the  Rolls,  declared  that 
lapse  of  time  and  acquiescence  on  the  part  of  the  party 
whose  interests  are  alleged  to  have  been  injuriouslv  affected 
by  irregular  proceedings,  will  be  a  complete  bar,  unless  the 
transaction  is  tainted  with  fraud  involving  grave  moral 
guilt.  Upon  this  ground  an  agreement  between  the  share- 
holders and  directors  of  a  joint-stock  company  was  uji- 
held,  although  admitted  to  have  been  originally  ultra  vires, 
and  although  the  books  of  the  company,  accessible  to  the 
shareholders,  did  not  show  the  real  nature  of  the  transac- 


'  McKnight   v.  City  of  Pittsburgh,  West  Troy,  43  Barb.  fN.Y.)  48  ;  Brown 

91  Pa.  St.   273.     Compare  Veeder  v.  v.  The  Mayor,  63  N.  Y.  239,  244 ;  Dil- 

Mudgett,  95  N.  Y.  310.  Ion  on  Mun.  Corp.  463;  McDonald  v. 

'  Smith  V.  City  of  Newburgh,  -j-j  N.  The  Mayor,  68  N.  Y.  23,  27. 
Y.  136;   Peterson  v.  The  Mayor,  etc.,         ■'  L.  R.  3  Eq.  Cas.  769. 
17  N.   Y,   449;    Cowen  v.  Village  of 


688  AFFIRMANCE    EFFECTED    BY    LACHES.  §  495 

tion.  This  case  was  affirmed  in  the  House  of  Lords.^  In 
cases  of  actual  fraud  the  courts  of  equity  feel  great  reluc- 
tance to  interfere  where  the  party  complaining  does  not 
apply  for  redress  at  the  earliest  convenient  moment  after 
the  actual  character  of  the  fraudulent  transaction  comes  to 
his  knowledge.  The  party  upon  whose  rights  or  interests 
a  fraud  is  committed  should  not  be  allowed,  after  the  fact 
comes  to  his  knowledge,  to  speculate  upon  the  possible 
advantages  to  himself  of  confirming  or  repudiating  the 
transaction.  He  must  repudiate  at  once  and  surrender  his 
securities.*  The  lapse  of  twenty  years  is  probably  the 
shortest  period  which  would  constitute  an  absolute  bar  to 
the  riofht  to  avoid  a  sale  for  breach  of  trust. '^  A  resale  was 
refused  after  sixteen  years*  in  one  case,  and  after  eighteen 
years  in  another,^  while  on  the  other  hand  the  sale  was  set 
aside,  in  Hatch  v.  Hatch,^  after  the  lapse  of  twenty  years, 
in  Dobson  v.  Racey'  after  twenty-seven  years,  and  in  Pur- 
cell  v.  McNamara^  after  seventeen  years.  Each  case  must 
be  regulated  by  its  special  circumstances.  It  is  regarded 
as  dangerous  to  accept  a  title  of  this  character,  for  "in- 
fancy, ignorance,  concealment,  or  misrepresentation  might 
come  to  explain  and  excuse  the  delay,  and  prevent  it  from 
amounting  to  acquiescence."^  It  may  be  observed  that 
mere  silence  will  not  amount  to  the  ratification  of  an  un- 
authorized lease  executed  by  the  officers  of  a  corporation. ^° 


1  Evans  v.  Smallcombe,  L.  R.  3  H.  *  Bergen  v.  Bennett,  i   Cai.  Cas.  in 

L.  249.     See,  also,  Brotherhood's  Case,  Er.  (N.  Y.)  i. 

31  Beav.  365.  ^  Gregory  V.  Gregorj-,  [  G.  Coop.  201. 

^  Sheldon  H.  B.  Co.  v.  Eickemeyer  ^  9  Ves.  292. 

H.  B.  M.  Co.,  90  N.  Y.  617.    See  Parks  '  3  Sandf.  Ch.  (N.  Y.)  60. 

V.   Evansville,  etc.  R.R.  Co.,  23  Ind.  *  14  Ves.  91. 

567;  Perrett's  Case,  L.  R.  15  Eq.  Cas.  '  Finch,  J.,  in  The  People  v.  Open 

250.  Board  of  Brokers,  92  N.  Y.  104. 

*  See  People  v.  Open  Board  of  Brok-  '"  Kersey  Oil  Co.  v.  Oil  Creek  and 

ers,  92  N.  Y.  103,  reviewing  the  cases ;  Allegheny  R.R.  Co.,  34  Leg.  Int.  (Pa.) 

Hawley  v.  Cramer,  4  Cow.  (N.  Y.)  735.  362. 


CHAPTER  IV. 


AVOIDANCE    OF    VOIDABLE    ACTS. 


§  496.  Disaffirmance  or  avoidance  by 
infant  a  personal  privilege. 

497.  Acts  avoided. 

498.  General    requisites    of    acts    of 

avoidance  as  compared  with 
acts  of  confirmation. 

499.  Avoidance  by  infant  of  voidable 

acts. 

500.  Avoidance  of  infant's  deed   of 

land. 

501.  A  sufficient  avoidance  of  an  in- 

fant's deed. 

502.  Fraudulent  acts  or  suppression 

by  infant. 

503.  Effect  of  inertness  or  silence. 

504.  No  estoppel  against  infants. 


§  505.  Laches  of  infant  affecting  avoid- 
ance. 

506.  Avoidance  of  infant's  personal 

contracts. 

507.  Restitution  by  infant. 

508.  Disaffirmance  of  lunatic's  deed. 

509.  Avoidance  in  equity  of  lunatic's 

acts. 

510.  Restitution  by  lunatic. 

510^?.  General  rules  as  to  restitution. 

511.  Personal  representative  cannot 

avoid  his  own  voidable  act. 

512.  Avoidance    or    cancellation    of 

void  or  voidable  instruments. 

513.  Distinction  between  instruments 

affecting  realty  and  personalty. 


§  496.  Disaffirmance  or  avoidance  by  infant  a  personal 
privilege. — The  general  and  familiar  rule  is  that  the  legal 
privileges  of  infancy  are  personal  to  the  infant  ami  that 
no  third  person  can  take  any  advantage  of  them,  and 
therefore,  the  infant's  contracts,  although  voidable  by 
him,  are  binding  upon  the  persons  sui  juris  whh  whom 
he  contracts.^  Hence  it  was  decided  in  Oliver  v.  Huud- 
let,"  that  a  guardian  had  no  power  or  authority  t<j   avoid 


'  Oliver  V.  Houdlet,  13  Mass.  237; 
S.  C.  7  Am.  Dec.  134;  Beardsley  v. 
Hotchkiss,  96  N.  Y.  211.  See  Kendall 
V.  Lawrence,  22  Pick.  (Mass.)  543 ; 
Holmes  v.  Rice,  45  Mich.  142  ;  Fisk  v. 
Fisk,  9  Weekly  Dig.  (N.  Y.)  172;  Van 
Bramer  v.  Cooper,  2  Johns.  (N.  Y.) 
279;  Slocum  V.  Hooker,  13  Barb.  (N. 
Y.)  536;  Yates  v.  Lyon,  61  N.  Y.  344. 
Judge  Story  observes  that  "  the  disa- 
44 


bilities  of  an  infant  are  intended  by  law 
for  his  own  protection,  and  not  for  the 
protection  of  the  rights  of  third  per- 
sons; and  his  acts  may  therefore  in 
many  cases  be  binding  upon  him,  al- 
though the  persons  under  whose  guard- 
ianship, natural  or  positive,  he  then  is. 
do  not  assent  to  them."  llnitcd  States 
V.  Bainbridge,  i  Mason  S3.. 
"•  13  Mass.  237. 


690  DISAFFIRMANCE    OR   AVOIDANCE.  §  496 

a  voidable  act  of  his  ward.  In  the  later  case  of  Chandler 
V.  Simmons^  it  was  said  that  the  rule  that  the  guardian 
of  a  minor  cannot  disaffirm  his  ward's  contract  must  go 
upon  the  theory  that  the  minor  ought  to  have  the  personal 
right  of  electing,  after  coming  of  age,  whether  he  will  rat- 
ify or  avoid  such  acts,  and  that  it  would  be  inconsistent 
with  and  destructive  of  this  privilege  to  permit  the  guardian 
to  annul  such  contracts  before  the  ward  attained  his  major- 
ity and  exercised  his  mature  discretion  upon  the  transac- 
tion. In  this  very  case,  however,  it  was  held  that  this  pro- 
hibition did  not  extend  to  a  guardian  appointed  for  a  party 
as  a  spendthrift,  after  his  coming  of  age,  and  that  the 
guardian  in  such  a  case  might  avoid  the  acts  and  contracts 
of  his  ward  entered  into  during  infancy  as  fully  as  might 
the  ward  himself.  The  general  principle  already  enunci- 
ated,- that  the  avoidance  of  a  voidable  act  rests  with  the 
person  injured  or  prejudiced,  is  peculiarly  applicable  to  in- 
fants.' The  vendor  cannot  avoid  an  infant's  purchase  on 
that  ground,^  and  a  stranger,  especially  if  a  wrong-doer,^ 
will  not  be  heard  to  impeach  an  infant's  conveyance.^  So 
infancy  is  no  defense  or  protection  to  the  infant's  sureties 
or  indorsers,*  and  the  copartners  of  an  infant  cannot  exer- 
cise his  right  of  disaffirmance  for  their  own  benefit,"^  and 
the  disaffirm.ance  cannot  be  made  by  creditors.®  The  right 
of  disaffirmance,  however,  has  been  extended  to  the  infant's 
executors  and  administrators'  and  to  his  privies  in  blood. 


1  97  Mass.  511.  Jaffray  v.  Frebain,  5  Esp.  47  ;  Hartness 

*  Keane  v.  Boycott,  2  H.  Bla.  511;  v.  Thompson,  5  Johns.  (N.  Y.)  160; 
Slocum  V.  Hooker,  13  Barb.  (N.  Y.)  Parker  v.  Baker,  i  Clarke's  Ch.  (N.  Y.) 
536  ;  Alsworth  v.  Cordtz,  31  Miss.  32  ;  136. 

Oliver  v.  Houdlet,  13  Mass.  237  ;  Jef-  ''Brown  v.   Hartford  Ins.  Co.,  117 

ford's  Admr.  v.  Ringgold,  6  Ala.  549,  Mass.  479  ;  Winchester  v..  Thayer,  129 

3  Oliver  v.  Houdlet,  13  Mass.  237.  Mass.  129. 

*  Holmes  v.  Rice,  45  Mich.  142.  '  Kingman  v.  Perkins,  105  Mass.  m  ; 
■''  Dominick  v.  Michael,  4  Sandf.  (N.  McCarty  v.  Murray,  3  Gray  (Mass.)  578 ; 

Y.)  374.  Kendall  v.  Lawrence,  22  Pick.  (Mass.) 

^  See  Taylor  v,  Dansby,  42  Mich.  82  ;  540. 

]\lotteux  v.  St.  Aubin,  2  W.  Bla.  1133;  "  Smith  v.  Mayo,  g  Mass.  62 ;  Jef- 


§  497  ACTS    AVOIDED.  69I 

but  not  to  his  assignees  or  privies  in  estate,'  and  infancy 
may  be  pleaded  by  the  committee  of  an  infant  lunatic  in 
avoidance  of  his  mortgage,  as  the  committee  is  a  personal 
representative.^  Strictly  speaking,  the  privilege  of  avoid- 
ance is  not  assignable ;  but  where  the  infant  has,  by  plea 
or  act,  disaffirmed  the  contract,  then  his  privies  in  estate 
may  avail  themselves  of  the  avoidance.^ 

§  497.  Acts  avoided. — An  infant  may  disaffirm  a  chattel 
mortgage  executed  by  him  as  security  for  borrowed  money, 
and  reclaim  the  chattels  without  refunding  the  money,  it 
not  appearing  that  he  is  able  to  make  restitution.*  and  may 
recover  money  from  a  broker  put  up  as  margin  for  a  stock 
transaction^  and  lost  by  the  speculation.^  So  an  infant 
partner  may  rescind  his  agreement  of  partnership  and  re- 
cover judgment  against  his  copartner  individually  for  cap- 
ital paid  in  by  him.''  "  It  is  clear,"  says  Bayley,  J.,  "  that 
an  infant  may  be  in  partnership.  It  is  true  that  he  is  not 
liable  for  contracts  entered  into  during  his  infancy,  but  still 
he  may  be  a  partner.  If  he  is,  in  point  of  fact,  a  partner 
during  his  infancy,  he  may,  when  he  comes  of  age,  elect  if 
he  w^ill  continue  that  partnership  or  not.  If  he  continues 
the  partnership,  he  will  then  be  liable  as  a  partner."^ 

ford's  Admr.  v,  Ringgold,  6  Ala.  544 ;  c.  37  Am.  Rep.  407.     See  Stafford  v. 

Martin  V.  Mayo,  10  Mass.  137  ;  Parsons  Roof,  9  Cow.  (N.  Y.)  626;  Chapin  v. 

V.  Hill,  8  Mo.  135;  Turpin's  Admr.  v.  Shafer,  49  N.  Y.  407;  Bool  v.  Mix,  17 

Turpin,  16  Ohio  St.   270;    Person   v.  Wend.  (N.  Y.)  119;  State  v.  Plaisted, 

Chase,   37  Vt.  647;    Ledger  Building  43N.  H.413;  Randall  v.  Sweet,  i  Den. 

Ass'n  V.  Cook,  12  Phila.  (Pa.)  434.  (N.  Y.)  460. 

'  Bozeman  v.  Browning,  31  Ark.  364;         ^  Heath  v.  Mahoncy,  12  Weekly  Dig. 

Gullett  V.  Lamberton,  6  Ark.  118 ;  Jef-  (N.  Y.)  404. 

ford's  Admr.  v.  Ringgold,  6  Ala.  544  ;        *  Ruchizky  v.  Do  Haven.  97  Pa.  St. 

Hoyle  V.  Stowe,  2  Dev.  «&  Bat.  Law  202. 

(N.  C.)  323 ;  Breckenridge's  Heirs  v.         ■"  Sparman  v.   Keim,  83  N.  Y.  245  ; 

Ormsby,  i  J.J.  Mar.  (Ky.)  236;  Illinois  S.  C.  9  .^bb.  N.  C.  i,  note  ;  rev'g  S.  C. 

Land  Co.  v.  Bonner,  75  111.  315  ;  Nel-  44  Super.  Ct.  (N.  Y.)  163  ;  Everett  v. 

son  V.  Eaton,  i  Redf.  (N.  Y.)  498.  Wiikins.  29  Law  Times  (N.  S.)  S46  ; 

■  Ledger  Building  Ass'n  v.  Cook,  12  Corpe  v.  Overton,  10  Bing.  252  ;  Skin- 

Phila.  (Pa.)  434.  ner  v.  Maxwell,  66  N.  C.  45. 

'  Shrock  V.  Crowl,  83  Ind.  244.  "  Goode  v.  Harrison,  5  Barn.  &  Aid. 

■'Miller  v.  Smith,  26  Minn.  24S  ;   S.  157.  SeeDunton  v.Brown.  31  Mich.182. 


692  ACTS    OF    AVOIDANCE.  §§  498,  499 

§  498.  General  requisites  of  acts  of  avoidance  as  compared 
with  acts  of  confirmation. — The  reason  is  apparent  for  the 
distinction  in  quality  and  character  between  acts  of  avoid- 
ance and  acts  of  confirmation.  The  infant's  deed  vests  the 
title  to  the  land  in  his  grantee ;  hence,  if  the  deed  is  avoid- 
ed, the  ownership  of  the  land  is  re-transferred.  The  seizin 
is  chansred.  There  is  fitness  in  the  rule  that  the  title  to 
land  shall  not  pass  by  acts  less  solemn  than  a  deed ;  that 
its  ownership  shall  not  be  divested  by  anything  inferior  to 
that  which  conferred  it.  On  the  other  hand,  a  confirma- 
tion passes  no  title ;  it  effects  no  change  of  property  ;  it 
disturbs  no  seizin.  It  is  therefore  itself  an  act  of  a  charac- 
ter less  solemn  than  the  act  of  avoiding  a  deed,  and  it  may 
well  be  effected  in  a  less  formal  manner.^ 

§  499.  Avoidance  by  infant  of  voidable  acts. — A  leading 
case  embodying  the  law  as  to  the  avoidance  of  his  deed  or 
other  contract  by  an  infant,  is  Tucker  v.  Moreland.^  Mr. 
Justice  Story,  in  delivering  the  opinion  of  the  court,  said  : 
"  There  is  no  doubt  that  an  infant  may  avoid  his  act,  deed, 
or  contract,  by  different  means,  according  to  the  nature  of 
the  act  and  the  circumstances  of  the  case.  He  may  some- 
times avoid  it  by  matter  in  pais,  as  in  case  of  a  feoffment 
by  an  entry,  if  his  entry  is  not  tolled ;  sometimes  by  plea, 
as  when  he  is  sued  upon  his  bond  or  other  contract ;  some- 
times by  suit,  as  when  he  disaffirms  a  contract  made  for 
the  sale  of  his  chattels,  and  sues  for  the  chattels  ;  sometimes 
by  a  writ  of  error,  as  when  he  has  levied  a  fine  during  his 

nonage The  general  result  seems  to  be  that  where 

the  act  of  the  infant  is  by  matter  of  record,  he  must  avoid 
it  by  some  act  of  record  (as,  for  instance,  by  a  writ  of  error, 
or  an  audita  querela)  during  his  minority.  But  if  the  act 
of  the  infant  is  a  matter  in  pais  it  may  be  avoided  by  an 
act  in  pais  of  equal  solemnity  or  notoriety ;  and  this,  ac- 
cording to  some  authorities,  either  during  his  nonage  or 

'  Irvine  v.  Irvine,  9  Wall.  628.  -  10  Peters  59. 


§§   500,  50I    AVOIDANCE  OF  DEED  OF  LAND.  693 

afterwards ;  and  according  to  others,  at  all  events,  after  his 
arrival  of  age."^ 

§  500.  Avoidance  of  infant's  deed  of  land. — Whatever  may 
be  the  true  principle  of  law  applicable  to  the  right  of  dis- 
affirmance of  an  infant's  personal  contracts,  it  seems  to  be 
established  that  the  infant's  conveyance  of  land  cannot  be 
conclusively  avoided  until  after  the  infant  has  attained  his 
majority.^ 

§  501.  A  sufficient  avoidance  of  an  infant's  deed. — A  con- 
veyance of  land  may  be  avoided  by  an  infant  by  actual 
entry,  ejectment,  writ,  dum  fuit  infra  aetatem,  by  anoth- 
er absolute  conveyance  after  attaining  majority,  or  by  any 
act  manifesting  unequivocally  his  intention  to  avoid  it."* 
In  Green  v.  Green  ^  it  was  held  that  a  re-entry  made  by 
the  infant,  with  the  purpose  of  disaffirming  the  deed,  and 
with  notice  of  his  intention,  was  sufficient  to  avoid  it,  and 
that  the  grantee  could  not  maintain  trespass  for  such  a  re- 
entry.^ In  Arkansas  an  infant  has  seven  years  after  com- 
ingf  of  ao^e  in  which  to  disaffirm  his  deed.''     In  New  York 


'  See  S.  C.  I  Am.  Lead.  Cases,  230,  Lead.  Cases  257  ;  Roberts  v.  Wiggin, 

especially  the  learned  note  beginning-  i    N.   H.  73 :    S.  C.  8  Am.  Dec.   38 ; 

at  page  243.  Bingham  v.  Barley,  55  Texas  281  ;  S.  C. 

^  See  Philips  v.  Green,  3  A.  K.  40  Am.  Rep.  801  ;  Irvine  v.  Irvine,  9 
Marsh.  (Ky.)  7;  S.  C.  13  Am.  Dec.  Wall.  617  ;  Dixon  v.  Merritt,  21  Minn. 
124,  and  note  at  p.  132.  See  also  note  196;  Hastings  v.  Dollarhide,  24  Gal. 
to  Tucker  v.  Moreland,  i  Am.  Lead-  195;  Mustard  v.  Wohlford,  15  Gratt. 
ing  Cases  257;  Roof  v.  Stafford,  7  (Va.)  329;  Bool  v.  Mix.  17  Wend.  (N. 
Covven  (N.  Y.)  183;  Bool  v.  Mix,  17  Y.)  120;  Green  v.  Green.  6g  N.  Y. 
Wend.  (N.  Y.)  119;  Matthewson  v.  553;  Scott  v.  Buchanan,  11  Humph. 
Johnson,  i  Hoff.  Ch.  (N.  Y.)  560;  (Tenn.)  469;  Drake  v.  Ramsay,  5  Ohio 
Hastings  v.  Dollarhide,  24  Cal.  195;  251;  Cresinger  v.  Welch,  15  Ohio 
Dunton  v.  Brown,  31  Mich.  182;  Dixon  196  ;  Norcum  v.  Sheahan,  21  Mo.  25  ; 
V.  Merritt,  21  Minn.  196;  Bozeman  v.  Nathans  v.  Arkwright,  66  Ga.  179; 
Browning,  31  Ark.  364;  Wallace  v.  Scranton  v.  Stewart,  52  lnd.69;  Ill- 
Latham,  52  Miss.  291  ;  Cummings  v.  inois  Land  Co.  v.  Bonner.  75  III.  515  ; 
Powell,  8  Texas  80  :  Sims  v.  Everhardt,  Allen  v.  Poole,  54  .Miss.  323. 
102  U.  S.  300.  "  69  N.  Y.  553. 

2  See    Philips    v.    Green,    3   A.    K.  ^  See  Bool  v.  Mix.  17  Wend.  (N.  Y.) 

Marsh.  (Ky.)  7  ;  S.  C.  13  Am.  Dec.  124,  120. 

132,  note  ;  Tucker  v.  Moreland,  i  Am.  ''  Kountz  v.  Davis,  34  Ark.  590. 


694  FRAUDULENT    ACTS    BY    INFANT.  §  5O2 

it  is  said  that  the  contract  may  be  avoided  within  a  reason- 
able time  after  the  infant  reaches  his  majority.^  This  case 
relates  to  personalty.  What  is  a  reasonable  time  within 
which  the  infant  may  make  the  election  as  to  disaffirmance 
is  nowhere  determined  in  such  a  manner  as  to  furnish  a 
rule  applicable  to  all  cases.^  The  question  must  always  be 
answered  in  view  of  the  peculiar  circumstances  of  each 
case.^  "  It  must  be  admitted,"  said  Strong,  J.,  in  Sims  v. 
Everhardt,"*  "  that  generally  the  disafifirmance  must  be 
w^ithin  the  period  limited  by  the  statute  of  limitations  for 
bringing  an  action  of  ejectment.  A  much  less  time  has  in 
some  cases  been  held  unreasonable.  It  is  obvious  that 
delay  in  some  cases  could  have  no  justification,  while  in 
others  it  would  be  quite  reasonable."  In  Nathans  v.  Ark- 
wrig-ht  ^  the  court  held  that  an  infant  remainderman  would 
not  be  excused  from  disaffirming  his  deed  within  a  reason- 
able time  after  attaining  his  majority  merely  because  his 
right  to  bring  ejectment  for  the  land  had  not  accrued.  In 
this  case  it  was  said  that  a  reasonable  time  would  not  ex- 
ceed seven  years  after  the  disability  was  removed,  and 
that  ignorance  of  the  true  status  of  the  transaction  was  no 
protection  against  the  lapse  of  time.  This  is  upon  the 
theory  that  a  suit  is  not  necessary  to  effect  a  disaffirmance  ; 
the  right  of  disaffirmance  might  have  been  exercised  be- 
fore the  right  to  bring  ejectment  and  entirely  independent 
of  it. 

§  502.  Fraudulent  acts  or  suppression  by  infant. — Fon- 
blanque  says:^  "When  a  man  has  a  title,  and  knows  of  it, 
stands  by  and  either  encourages  or  does  not  forbid  the  pur- 
chase, he  shall  be  bound,  and  all  claiming  under  him  ;  nei- 
ther shall  infancy  or  coverture  be  an  excuse  in  such  case." 
This  principle  is  recognized  in   Spencer  v.  Carr,^  though 

'  Chapin  v.  Shafer,  49  N.  Y.  407.  ^  102  U.  S.  309. 

*  Sims  V.  Everhardt,  102  U.  S.  309.  '  66  Ga.  179, 

'State   V.  Plaisted,   43  N.  H.  413;  '  Fonbl.  Eq.  163. 

Jenkins  v.  Jenkins,  12  Iowa  195.  ^  45  N.  Y.  408. 


§  5^3  INERTNESS    OR    SILENCE.  695 

the  infant  in  that  case  was  held  not  to  be  estopped,  as 
there  was  an  absence  of  proof  of  intentional  fraud  on  her 
part.  In  the  opinion  a  case  is  referred  to  where  an  infant 
over  seventeen  years  of  age  had  received  the  full  consider- 
ation for  a  lease  assigned  by  his  guardian,  and  afterward 
sought  to  avoid  it,  and  demised  the  lands  to  another,  yet 
it  was  held  that  equity  would  compel  him  to  execute  the 
lease  or  pay  back  the  money.^  King,  Chancellor,  said : 
"  Infants  have  no  privilege  to  cheat  men."  In  another 
case^  an  infant,  then  twenty  years  of  age,  was  emjiloyed 
by  his  father  to  raise  money  upon  land  which  the  father 
claimed  to  own  in  fee.  The  money  was  obtained,  the  in- 
fant being  very  active  in  procuring  it  and  witnessing  the 
mortgage.  After  the  father's  death  the  infant  set  up,  as 
the  fact  was,  that  he  had  a  remainder  in  the  land  after  his 
father's  death,  and  insisted  that  the  mortgage  was  not  valid 
as  against  him.  It  was  shown  that  the  infant  knew  of  his 
title  at  the  time  the  loan  was  consummated.  The  Lord 
Chancellor  overruled  the  defense,  holding  that  if  the  infant 
was  old  and  cunning  enough  to  contrive  and  carry  on  a 
fraud,  he  ought  in  equity  to  make  satisfaction  for  it.^ 

§  503.  Effect  of  inertness  or  silence. — The  {irinciple  of 
these  cases  must  be  carefully  distinguished  from  cases 
where  there  has  been  nothing  more  than  mere  silence  on 
the  part  of  the  infant.  In  such  cases,  as  we  have  said,  his 
right  to  avoid  his  conveyance  of  land  after  coming  of  age 
is  not  barred  until  the  statute  of  limitations  destroys  his 
remedy.*  Such  is  in  effect  the  ruling  in  cases  like  Irvine 
V.  Irvine,^  Prout  v.  Wiley, ^  and  Lessee  of  Drake  v.  Ram- 
say.''    It  is  held  in  Sims  v.  Everhardt,®  that  the  cases  hold- 

'  Evroy  v.  Nicholas,  2  Eq.  Cas.  Ab.  2  Kent's  Com.  241  ;  also  note  to  Nor- 

488.  ris  V.  Wait,  44  Am.  Dec.  283. 

-  Watts  V.  Creswell,  2  Eq.  Cas.  Ab.         ■•  Sims  v.  Everhardt,  102  U.  S.  312. 
515.  ^9  Wall.  617. 

=*  See  Savage  v.  Foster,  9  Mod.  35  ;        "28  Mich.  164. 
Beckett  v.  Cordley,  i  Bro.  C.  C.  353;        '  5  Ohio  251. 

"  102  U.  S.  312. 


696  NO    ESTOPPEL    AGAINST    INFANTS.  §   504 

ing  that  silence  during  a  much  less  period  of  time  will  be 
held  to  be  a  confirmation  of  the  voidable  deed,  either  rely 
upon  Holmes  v.  Blogg/  which  was  not  a  case  of  an  in- 
fant's deed,  or  subsequent  cases  decided  on  its  authority, 
or  they  rest  in  part  upon  other  circumstances  than  mere 
silent  acquiescence,  such  as  standing  by  without  speaking 
while  the  grantee  made  improvements,  or  making  use  of 
the  consideration.  Strong,  J.,  said  :  "  We  think  the  pre- 
ponderance of  authority  is  that,  in  deeds  executed  by  in- 
fants, mere  inertness  or  silence  continued  for  a  period  less 
than  that  prescribed  by  the  statute  of  limitations,  unless 
accompanied  by  affirmative  acts,  manifesting  an  intention 
to  assent  to  the  conveyance,  will  not  bar  the  infant's  right 
to  avoid  the  deed."^ 

§  504,  No  estoppel  against  infants. — The  books  are  re- 
plete with  cases  in  which  it  has  been  sought  to  establish 
an  estoppel  against  an  infant.  The  question  came  up  in 
Sims  V.  Everhardt,^  but  the  court  said  that  there  could  not 
be  any  doubt  as  to  its  solution,  founded  either  upon  reason 
or  authority.  Strong,  J.,  said:  "An  estoppel  in  pais  is 
not  applicable  to  infants,  and  a  fraudulent  representation 
of  capacity  cannot  be  an  equivalent  for  actual  capacity.^ 
A  conveyance  by  an  infant  is  an  assertion  of  his  right  to 
convey.  A  contemporaneous  declaration  of  his  right,  or 
of  his  age,  adds  nothing  to  what  is  implied  in  his  deed. 
An  assertion  of  an  estoppel  against  him  is  but  a  claim  that 
he  has  assented  or  contracted.  But  he  can  no  more  do  that 
effectively  than  he  can  make  the  contract  alleged  to  be 
confirmed."^    So,  an  infant  cannot  be  estopped  from  assert- 


'  8  Taunt.  35.  ^  See  Upshaw  v.  Gibson,  53  Miss. 

'^  Sims  V.  Everhardt,  102  U.  S.  312.  341 ;  McBeth  v.  Trabue,  69  Mo.  642  ; 

See  Wallace  v.  Latham,  52  Miss.  291  ;  Montgomery  v.  Gordon,  51   Ala.  yjl ; 

Prout  V.  Wiley,  28  Mich.  164.  Ackley  v.    Dygert,  33    Barb.    (N.  Y.) 

^  102  U.  S.  313.  176,  193;  Lackman  v.  Wood,  25  Gal. 

■•  Citing  Brown  v.  McCune,  5  Sandf.  147 ;  Conrad  v.  Lane,  26  Minn.   389. 

(N.  Y.)  224;  Keen  v.  Coleman,  39  Pa.  But  compare  Goodman  v.  Winter,  64 

St.  299.  Ala.  410 ;  Commonwealth  v.  Shuman, 


§§  505'   5^6  LACHES    OF    INFANT.  697 

ing  a  title  to  real  estate.^  The  doctrine  of  estoppel  is  some- 
times, however,  applied  in  courts.of  equity  in  cases  such  as 
have  been  already  noticed.'^  Air.  Bigelow,^  in  speaking  of 
the  rule  as  applicable  to  infants,  says  :  '*  We  do  not  say 
that  the  test  of  the  existence  of  an  estoppel  bv  conduct 
depends  upon  the  existence  of  a  right  of  action  for  deceit ; 
but  we  apprehend  that  while  there  may  be  an  estoppel 
without  this  right  of  action  in  some  cases,  the  estoppel 
always  arises  where  the  action  of  deceit  would  be  maintain- 
able." It  may  here  be  observed  that  minors,  whose  prop- 
erty has  been  illegally  sold,  are  not  estopped  from  recov- 
ering it  because,  upon  attaining  their  majority,  thev  received 
its  price  without  having  been  informed  of  the  facts  con- 
nected with  the  sale.* 

§  505.  Laches  of  infant  affecting  avoidance. — The  recent 
case  of  Newton  v.  Hammond^  reaffirms  the  j)rinciple  that 
mere  delay  by  a  ward  on  attaining  his  majoritv  in  com- 
pelling his  guardian  to  settle  his  accounts  in  the  probate 
court,  did  not  discharge  the  guardian's  sureties,  notwith- 
standing the  fact  that  the  guardian  may  in  the  meantime 
have  become  insolvent.  The  decision  is  based  upon  the 
theory  that  the  guardian  might  have  been  compelled  to  ac- 
count after  it  became  his  duty  so  to  do,  at  the  instance  of 
the  sureties  on  the  bond  as  well  as  by  the  ward,  and  hence 
the  failure  to  compel  the  accounting  was  as  much  the  neg- 
ligence of  the  one  as  of  the  other.^ 

§506.  Avoidance  of  infant's  personal  contracts. — With  re- 
gard to  the  personal  contracts  of  an  infant,  generally  speak- 
ing, these  may  be  avoided  either  before  or  after  his  arrival 
at  age.''    It  is  difficult  to  state  the  exact  basis  upon  which  a 


18  Pa.  St.  346  ;  Overton  v.  Banister,  3  ^  Bi<3^elow  on  Estoppel,  3d  ed..  p.  516. 

Hare  503.  '  Self  v.  Taylor,  33  La.  An.  769. 

'  Brumfield  v.  Boutall,  24  Hun  (N.  Y.)  '  38  Ohio  St.  430. 

456  ;  Sherman  v.  Wright,  49  N.  Y.  227.  «  See  §  495. 

■  See  note  to  Norris  v.  Wait,  44  Am.  '  See  Philips  v.  Green,  3  A.  K.  Mar. 

Dec.  285;  Drury  v.  Drury,  2  Eden  39.  (Ky.)  7 ;  s.  C.    13  Am.  Dec.  124.  note 


698  infant's  personal  contracts.  §  506 

right  of  disaffirmance  by  an  infant  before  attaining  his 
majority  is  founded.  In  Sims  v.  Everhardt  (decided  in 
1880),^  the  court  said  :  "  Confirmatory  acts  must  be  volun- 
tary. As  we  have  said,  one  who  is  under  a  disability  to 
make  a  contract  cannot  confirm  one  that  is  voidable,  or, 
what  is  the  same  thing,  cannot  disaffirm  it.  An  affirmance 
or  a  disaffirmance  is  in  its  nature  a  mental  assent,  and 
necessarily  implies  the  action  of  a  free  mind,  exempt  from 
all  constraint  or  disability."^  It  is  said  by  a  writer^  that 
"  this  distinction  appears  to  be  recognized  out  of  regard  to 
the  infant's  benefit ;  since  land  might  be  recovered  after 
long  lapse  of  time  upon  disturbing  the  possessor's  title, 
while  personal  property  would  often  be  utterly  lost  if  one 
could  not  trace  out  and  recover  it  until  he  became  of  age." 
In  Towle  v.  Dresser  "*  the  court  say  that  they  can  find  no 
good  reason,  either  upon  principle  or  authority,  to  deny 
the  power  of  a  minor  to  rescind  an  executed  sale  of  per- 
sonal property  upon  returning  the  consideration  received. 
Barrows,  J.,  said  :  "  It  is  the  legitimate  use  of  the  shield 
with  which  the  law  covers  their  supposed  want  of  judgment 
and  experience,  and  places  both  parties  in  statu  quo  ante, 
a  condition  of  things  of  which  it  would  seem  neither  ought 


132  ;  Tucker  v.  Moreland,  i  Am.  Lea.  the  mortgage  is  voidable  only,  then  the 

Cases,  258 ;  Stafford  v.  Roof,  9  Cow.  mortgagor  had  a  right  to  avoid  it  at 

(N.  Y.)  626;  Shipman  v.   Horton,    17  any  time  before  he  arrived  at  age,  and 

Conn.  481  ;  Carr  v.  Clough,  26  N.  H.  within  a  reasonable  time  thereafter,  by 

280;  Willis  V.  Twambly,  13  Mass.  204  ;  any  act  which  evinced   that   purpose 

Briggs  v.  McCabe,  27  Ind.  327;  Riley  (Bool  v.  Mix,  17  Wend.  [N.  Y.]  119; 

V.  Mallory,  33  Conn.  201  ;  Monumental  Stafford  v.   Roof,  9  Cow.  [N.  Y.]  626  ; 

Building    Association  v.  Herman,  33  State  v.   Plaisted,  43   N.  H.  413),  and 

Md.   128;    Indianapolis   Chair   Co.   v.  an  unconditional  sale  of  the  property  is 

Wilcox,  59  Ind.  429;  Bailey  v.  Barn-  such  an  act.     State  v.  Plaisted,  43  N. 

berger,  11  B.  Mon.  (Ky.)   113;  Towle  H.  413." 

V.    Dresser,  73   Me.   257  ;  Gaffney  v.  '  102  U.  S.  312. 

Hayden,  no  Mass.  137;  S.  C.  14  Am.  °  See  Dunton   v.   Brown,  31   Mich. 

Rep.  580.    But  see  Farr  v.  Sumner,  12  182. 

Vt.   28 ;  Dunton  v.   Brown,   31   Mich.  ^  Schouler's      Domestic     Relations, 

182  ;  Boody  v.  McKenney,  23  Me.  517  ;  §  409. 

In   Chapin   v.    Shafer,   49  N.  Y.  412,  ^  73  Me.  256. 

Peckham,   J.,  said  :    "  Assuming  that 


§  507  RESTITUTION    BY    INFANT.  699 

to  complain.  By  reason  of  the  transitory  nature  of  per- 
sonal property,  to  withhold  this  right  from  the  infant,  per- 
haps for  a  term  of  years,  until  he  became  of  age,  would,  in 
many  cases,  be  to  make  it  utterly  valueless."  The  actioii 
of  the  infant  in  this  case  was  undoubtedly  praiseworthy  as 
regards  the  restoration  of  the  consideration,  but  we  fail  to 
see  how  this  element  can  affect  or  overcome  the  logical 
objection  to  the  exercise  of  mental  assent  sufficient  to  re- 
scind the  contract  by  a  person  under  disability.  \Vliy  is 
not  the  rescission  as  voidable  as  the  contract  itself  ? 

The  avoidance  may  be  effected  by  any  act  clearly  dem- 
onstrating a  renunciation  of  the  contract.^  A  parol  prom- 
ise and  ratification  made  by  an  infant  after  reaching  his 
majority,  to  pay  a  debt  not  for  necessaries,  has  been  held 
in  New  York  to  be  valid. ^ 

§  507.  Restitution  by  infant. — The  election  to  avoid  an  in- 
fant's acts,  frequently  brings  up  the  question  of  the  right 
of  the  party  sui  juris  to  claim  a  restoration  of  the  con- 
sideration which  the  infant  may  have  received  from  him. 
An  immense  amount  of  confusion  has  been  introduced  into 
this  branch  of  our  law,  and  numerous  cases  on  both  sides 
of  the  controversy  as  to  the  right  to  restitution  might  be 
cited.  The  New  York  Court  of  Appeals  in  1877,^  said 
that  they  did  not  deem  it  profitable  to  review  the  authori- 
ties upon  the  question,  but  declared  that  the  weight  of  au- 
thority was  against  the  right  to  exact  restitution  as  a  con- 
dition precedent  to  a  disaffirmance.-'  The  right  to  rei)udi- 
ate,  as  we  have  seen,  is  based  upon  tiie  incapacity  of  the 
infant  to  act  or  contract,  and  that  incapacity  must  be  iield 


'  Tucker  v.   Moreland,  i  Am.  Lead.  97  Mass.  508  ;  Gibson  v.  Sopcr.  6  Gmy 

Cases  25S,  and  cases  cited;  State  v.  (Mass.)  279;  Price  v.  Furman.  27  Vt. 

Plaisted,  43  N.  H.  413.  268;  Bartlelt  v.  Drake.  100  Mass.  174. 

•' Halseyv.  Reid.  4  Hun  (N.Y.)  778.  See    Mustard    v.   Wohlford.    15  Gratt. 

5  Green  v.  Green,  69  N.  Y.  556.  (Va.)  329;  Walsh  v.  Young.  1 10  Mass. 

"  Citing    Tucker    v.    Moreland,    10  399. 
Peters   58-74;   Chandler  v.  Simmons. 


700  lunatic's  deed.  §  508 

to  relate  as  well  to  the  avails  of  the  property  as  to  the 
property  itself,  and  when  the  avails  of  the  property  have 
been  improvidently  spent  or  squandered  in  speculation,  or 
otherwise  lost  during  minority,  the  infant  should  not  be 
held  responsible  for  an  inability  to  restore  them.  To  so 
hold  would  operate  as  a  very  serious  restriction  upon  the 
right  of  an  infant  to  avoid  his  contract,  and  in  many  cases 
would  destroy  that  right  altogether.  The  right  to  rescind 
is  established  for  the  protection  of  the  infant,  and  to  make 
it  dependent  upon  performing  an  impossibility  resulting 
from  acts  which  the  law  presumes  the  infant  incapable  of 
performing,  would  tend  to  impair  the  right  and  withdraw 
the  protection.^  In  Tucker  v.  Moreland,^  Judge  Story,  in 
speaking  of  an  avoidance  of  an  infant's  act,  said  :  "To  give 
effect  to  such  disaffirmance  it  is  not  necessary  that  the  in- 
fant should  first  place  the  other  party  in  statu  qtio."  In 
Hangen  v.  Hachmeister^  it  is  said  that  it  is  only  where  it 
affirmatively  appears  that  the  infant  has  squandered  or  lost 
the  money  or  property  during  infancy,  and  is  unable  to  re- 
fund, that  the  court  will  not  compel  him  to  make  restitution, 
§  508.  Disaffirmance  of  lunatic's  deed. — It  may  be  stated, 
as  a  general  rule,  that  the  grantor  in  a  deed  may  avoid  his 
conveyance  by  proof  that  he  was  no7i  compos  mentis  at  the 
time  of  its  execution.'*  An  insane  person  is  incapable  of 
making  a  valid  deed,  for  he  wants  the  consenting  mind. 
"The  law  makes  this  very  incapacity  of  parties  their  shield. 
In  their  weakness  they  find  protection.  It  will  not  suffer 
those  of  mature  age  and  sound  mind  to  profit  by  that  weak- 
ness. It  binds  the  strong  while  it  protects  the  weak.  It 
holds  the  adult  to  the  bargain  which  the  infant  may  avoid  ; 
the  sane  to  the  obligation  from  which  the  insane  may  be 
loosed.    It  does  not  mean  to  put  them  on  an  equality.    On 

'  Green  V.  Green,  69  N.  Y.  556.  S.   C.    39   Am.   Rep.   766;   Bensell   v. 

'  10  Peters  74,  Chancellor,  5  Whart.  (Pa.)  371  ;  Gib- 

3  16  Weekly  Dig.  (N.  Y.)  553.  son  v.  Soper,  6  Gray  (Mass.)  279. 
*  Crawford  v.  Scovell,  94  Pa.  St.  48 ; 


§  509  AVOIDANCE    OF    LUXATIc's    ACTS.  701 

the  other  hand,  it  intends  that  he  who  deals  with  an  infant 
or  insane  person  shall  do  it  at  his  peril.  Nor  is  there  practi- 
cally any  hardship  in  this,  for  men  of  sound  minds  seldom 
unwittingly  enter  into  contracts  with  infants  or  insane  per- 
sons "  ^  Some  act  of  avoidance  of  the  deed  must  be  shown. 
Thus,  in  an  action  by  heirs  to  set  aside  a  conveyance  made 
by  their  ancestor  who  was  insane,  though  he  had  not  been 
judicially  declared  so,  it  was  held  that  the  deed  being  void- 
able only,  some  act  of  disaffirmance  must  have  been  done 
either  by  the  ancestor  or  heirs  before  suit  brought. '^  It 
may  be  here  observed  that  ordinarily  an  administrator  has 
no  commission  to  interfere,  and  by  his  election  unsettle  the 
landed  possessions  held  by  the  intestate's  heirs  through  in- 
heritance, on  the  ground  that  the  ancestor,  when  he  acquired 
the  property,  was  not  of  sound  mind."' 

§  509.  Avoidance  in  equity  of  lunatic's  acts. — A  court  of 
equity,  when  its  jurisdiction  is  invoked  to  set  aside  deeds 
and  contracts  upon  the  ground  of  insanity,  acts  upon  ecjuit- 
able  principles.  It  is  not  a  matter  of  course  for  a  court  of 
equity  to  set  aside  and  declare  void  the  act  of  a  lunatic  exe- 
cuted during  his  lunacy.  It  will  enforce  the  universal 
maxim  of  that  court,  that  he  who  seeks  equity  must  do 
equity.  "The  Court  of  Chancery,"  says  Shelford,  "will 
not,  as  a  matter  of  course,  interfere  to  set  aside  contracts 
entered  into  and  completed  by  a  lunatic,  even  though  they 
be  void  at  law,  but  the  interference  of  the  court  will  de- 
pend very  much  upon  the  circumstances  of  each  particular 
case;  and  where  it  is  impossible  to  exercise  the  jurisdiction 
in  favor  of  the  lunatic  so  as  to  do  justice  tt)  the  other  party, 
the  court  will  refuse  relief,  and  leave  tiic  lunatic  to  his 
remedy  (if  any)  at  law."** 

'Gibson  v.  Soper,  6  Gray  (Mass.)        ^  Shelford  on  Lunacy,  418.     See  also 

282.  I    Story's    Eq.    Jur.    §  22S ;    Niell    v. 

■^  Schuffv.  Ransom,  79  Ind.  458.  Morlcy,   9  Yes.   Jr.   47S  ;    Loomis   v. 

'  Campbell  v.  Kuhn,  45  Mich.  514;  Spencer,  2  Paige  (N.  V.)  153;  Sprague 

S.  C.  40  Am.  Rep.  479-  ^-  ^"^>'  ' '  ^'^'S^  ^^'-  ^''^  '^^°- 


702  RESTITUTION    BY    LUNATIC.  §  5^0 

§  510.  Restitution  by  lunatic. — The  rule  of  law  with  ref- 
erence to  the  restitution  of  the  consideration  upon  the 
avoidance  of  a  lunatic's  contract,  is  somewhat  different 
from  that  which  governs  where  infancy  exists.  Thus  in 
Molton  V.  Camroux,^  which  was  an  action  to  recover 
money  paid  for  annuities,  it  was  held  that  when  a  person 
apparently  of  sound  mind,  and  not  known  to  be  otherwise, 
entered  into  a  fair  and  bo7ia  fide  contract  for  the  purchase 
of  property,  which  was  executed  and  completed,  and  the 
property  had  been  paid  for  and  enjoyed,  and  could  not  be 
restored  so  as  to  put  the  parties  in  statu  quo,  the  contract 
could  not  afterward  be  set  aside  either  by  the  alleged 
lunatic  or  those  who  represent  him.  And  in  Beals  v.  See* 
the  court  decided  that  an  executed  contract  by  a  merchant 
for  the  purchase  of  goods  prior  to  inquisition  could  not  be 
avoided  by  proof  of  insanity  at  the  time  of  the  purchase, 
unless  fraud  was  shown  or  knowledge  of  the  alleged 
lunatic's  condition.  The  same  principle  is  asserted  in 
Lancaster  County  National  Bank  v.  Moore.^  In  Craw- 
ford V.  Scovell*  the  court  say  that  "the  consideration 
need  not  be  restored  before  commencement  of  the  action, 
nor  after,  in  all  cases.  To  say  that  an  insane  man,  before 
he  can  avoid  a  voidable  deed,  must  put  the  grantee  in 
statu  quo,  would  oftentimes  be  to  say  his  deed  shall  not 
be  avoided  at  all.  The  more  insane  the  grantor  was  when 
the  deed  was  made,  the  less  likely  will  he  be  to  retain  the 
fruits  of  his  bargain  so  as  to  be  able  to  make  restitution. 
One  of  the  obvious  grounds  on  which  the  deed  of  an  in- 
sane man  is  held  voidable  is  not  merely  the  incapacity  to 
make  a  valid  sale,  but  the  incapacity  prudently  to  manage 
and  dispose  of  the  proceeds  of  the  sale.  And  the  same 
incapacity  which  made  the   deed   void    may  have  wasted 


•  2  Exch.  487.  ^  94  Pa.  St.  52  ;  S.  C.  39  Am.  Rep. 

2  10  Pa.  St.  56.  769. 

^  78  Pa.  St.  407  ;  s.  C.  21  Am.  Rep.  24. 


§   SlOa  RULES    AS    TO    RESTITUTION.  7O3 

the  price  and  made  the  restoration  of  the  consideration  im- 
possible."^ 

§  5iOrt.  General  rules  as  to  restitution. — In  an  article  in  the 
Central  Law  Journal,  by  Mr.  Crosby  Johnson,''  it  is  said: 
"  When  one  of  the  parties  to  a  contract  is  an  infant  or  in- 
sane person,  and  such  contract  does  not  relate  to  the  pro- 
curing of  necessaries ;  or  where  one  of  the  parties  is  of  age 
and  of  sound  mind,  but  entered  into  the  contract  in  conse- 
quence of  a  mistake  of  fact,  or  through  the  fraud  of  the 
other  party,  such  contract  may  be  rescinded,  provided 
equity  can  be  done  between  the  parties."  Alluding  to  the 
return  of  consideration  by  infants,  the  learned  writer  con- 
tinues :  "  The  infant  is  not  bound  to  place  the  other  party 
z'n  statu  quo  as  a  condition  precedent  to  the  right  to  rescind. 
Unless  he  has  the  consideration  by  him  received,  he  is  not 
bound  to  make  any  return  whatever  to  the  other  party.^ 
The  fact  that  the  infant  has  so  mismanaged  or  mistreated 
the  property  as  to  depreciate  its  value  and  render  it  worth 
a  o-reat  deal  less  than  when  it  was  received  bv  him,  will  not 
defeat  the  right  of  the  infant  to  rescind  the  contract.' 
Some  of  the  cases  seem  to  intimate  that,  although  the  in- 
fant should  have  the  consideration  in  his  hantis,  he  will  not 
be  required  to  make  return  thereof  previous  to  exercising 
his  privilege  of  rescinding,  but  would  leave  the  other  party 
to  recover  the  same  as  best  he  could,^    But  that  view  seems 


'  Citing  Gibson   v.  Soper,   6    Gray  &    R.    (Pa.)    309 ;    Ruchizky    v.    De 

(Mass.)  279.  Haven,  97  Pa.  St.   202 ;    Manning  v. 

M 8  Cent.  L.  J.  482.  Johnson,  26   Ala.   446;   Carpenter  v. 

"  Citing  Boody  V.  McKenney,  23  Me.  Carpenter,  45  Ind.   142;  Cresinger  v. 

517;  Hovey  v.   Hobson,   53  Me.  453;  Welch,  15  Ohio  156 ;  Wallace  v.  Lewis, 

Robinson    v.    Weeks,    56    Me.     102;  4  Harr.  (Del.)  75  ;  Miller  v.  Smith,  26 

Tucker  v.  Moreland,  10  Pet.  65  ;  Sims  Minn.  248;  s.  c.  37  Am.  Rep.  407. 

V.  Everhardt,   102  U.  S.  300 ;    Fitts  v.  "Citing  White   v.   Branch.   51    Ind. 

Hall,  9  N.  H.  441  ;  Price  v.  Furman.  27  210;  Whitcomb  v.  Joslyn,  51   V't.  79; 

Vt.  268;  Richardson  v.  Boright,  9  Vt.  S.  C.  31  Am.  Rep.  678,     See  Betts  v. 

368;    Dana  v.   Steams,    3  Cush.  (57  Carroll,  6  Mo.  App.  51S. 

Mass.)    372;     Walsh   v.    Young,    no  'Citing  Chandler   v.   Simmons.   97 

Mass.  396;  Gibson  v.  Soper.  6  Gray  Mass.  508  ;  Badger  v.  Phinney,  15  Mass. 

(72  Mass.)  279;   Shaw  v.  Boyd.  5  S.  359;  Skinner  v.  Maxwell.  66  N.  C.  45. 


704  RULES    AS    TO    RESTITUTION.  §  5IO^ 

to  convert  the  shield  into  a  sword.  If  it  is  admissible  at 
all,  it  is  only  when  the  infant  undertakes  to  exercise  the 
privilege  during  the  continuance  of  his  infancy.  But  where 
he  undertakes  to  exercise  the  right  after  attaining  his  ma- 
jority, he  should  be  required,  as  a  condition  precedent,  to 
return  the  consideration,  or  any  specific  fruits  of  the  con- 
sideration, which  he  may  then  have  in  his  hands  or  under 
his  control  in  as  good  condition  as  they  were  when  he  be- 
came of  age.^  In  this  way  we  should  escape  the  presump- 
tion that  an  infant  has  greater  capacity  to  take  care  of 
property  and  keep  it  in  good  condition  than  he  has  to  pur- 
chase such  property ;  and  at  the  same  time  secure  to  the 
other  party  whatever  of  judgment  or  discretion  the  infant 
may  have  actually  displayed  in  his  management  of  the  con- 
sideration or  of  its  proceeds.  Thus  the  privilege  would 
be  preserved  free  from  restriction  without  converting  the 
shield  into  a  sword." 

Referring  to  restitution  by  lunatics  or  their  representa- 
tives, the  same  writer  observes  that  if  the  party  having 
transactions  with  the  lunatic  "  knew  that  he  was  dealing 
with  an  insane  person,  or  if  the  nature  of  the  contract  is 
such  as  only  an  imbecile  or  crazy  man  would  have  made, 
or  if  an  unfair  advantage  was  taken  of  the  lunatic,  a  return 
of  the  consideration  will  not  be  exacted.^  But  if  the  luna- 
tic in  fact  applied  the  consideration  or  any  part  of  it  so 
that  it  enured  to  his  benefit,  he  must  make  restitution  to 
the  extent  of  benefits  actually  obtained  ;  or  if  the  consider- 
ation, or  specific  fruits  of  such  consideration,  be  in  his  hands 
at  the  time  of  rescinding,  they  should  be  restored  to  the 


'  Citing  Bartlett  v.  Cowles,  15  Gray  Tolson  v.  Garner,  15  Mo.  494;  Craw- 

(81  Mass.)  445  ;  Walsii  v.  Young,  no  ford  v.  Scovell,  94  Pa.  St.  48  ;  s.  C.  39 

Mass.  396  ;  Dill  v.  Bowen,  54  Ind.  204 ;  Am.  Rep.  766  ;  Henry  v.  Fine,  23  Ark. 

Bedinger  v.  Wharton,  27  Gratt.  (Va.)  417;  Van  Deusen  v.  Sweet,  51  N.  Y. 

857.  '  378 ;   Canfield  v.  Fairbanks,  63  Barb. 

^  Citing  Nichol  v.  Thomas,  53  Ind.  (N.  Y.)  461  ;  Riggs  v.  American  Tract 

42  ;  Gibson  v.  Soper,  6  Gray  (72  Mass.)  Soc,  84  N.  Y.  330. 
279 ;    Halley  v.  Troester,  72   Mo.  73 ; 


§   5^0^  RULES    AS    TO    RESTITUTION.  705 

Other  party."  ^  The  same  writer,  alkiding  to  the  subject  of 
the  return  of  consideration  required  of  a  defrauded  person, 
says  :  "  All  the  cases  are  agreed  that  one  who  was  induced 
to  enter  into  a  contract  through  the  fraudulent  contrivances 
or  fraudulent  representations  of  the  opposite  party,  may  re- 
scind the  contract  provided  he  can,  by  a  return  of  the  prop- 
erty received  under  the  contract,  place  the  other  party  in 
statu  quo?  An  offer  to  rescind  should  be  accompanied  by 
a  tender  of  the  return  of  the  property.  Nothing  else  will 
absolve  the  buyer  from  payment."^  Unless  the  considera- 
tion is  utterly  worthless  it  should  be  returned."  ^  Professor 
Schouler,  referring  to  the  authorities  governing  the  return 
required  in  cases  of  mistake,  said  :^  "The  rule  is  as  to  two 
innocent  parties  who  have  performed  acts  under  a  mutual 
misunderstanding,  that  the  court  will  allow  either  to  turn 
back,  if  he  can  take  the  other  back  with  him  ;  in  other 
words,  the  one  party  may  unravel  the  contract  if  he  can 
put  the  other  iii  statu  quo.  Therefore  the  buyer  of  a 
chattel  who  would  rescind  the  sale  on  this  ground,  and  get 

'  Citing  Lagay  v.  Marston,  32   La.  ■•  Citing  Morrow  v.  Rees,  69  Pa.  St. 

Ann.   170;  Lincoln  v.  Buckmaster,  32  368;    Wolf  v.    Dietzsch,    75    111.  205; 

Vt.  652  ;  Matthiessen  &  W.  Refining  Jopling    v.    Dooley,    i    Yerg.    (Tenn.) 

Co.  V.  McMahon,  38  N.  J.  L.  536.  289;  S.  C.  24  Am.  Dec.  450;  Barr  t. 

^  Citing  Lyon  v.  Bertram,  20  How.  Baker,   9    Mo.  840.     See   Sanborn  v. 

155;  Thurston  v.  Blanchard,  22  Pick.  Batchelder,  51   N.  H.  426;  Houghton 

(Mass.)   18;   S.  C.  33  Am.  Dec.  700;  v.   Nash,  64  .Me.  477;  Spencer  v.  St. 

Urquhart  v.  Macphcrson,  L.  R.  3  App.  Clair,  57  N.  H.  9;  Haase  v.  Mitchell, 

Cases  831  ;  S.  C.  24  Moak  545  ;  Vance  58    Ind.   213;    Bishop   v.   Stewart,    13 

V.   Schroyer,  79   Ind.    380;  Thayer  v.  Nov.  25  ;  Howe  Machine  Co.  v.  Rosine, 

Turner,  8  Mete.  (49  Mass.)  550;  Right-  87   III.   105;    Blake  v.  Nelson.  29  La. 

er  V.  Roller,  31    Ark.   170;    Freeman  Ann.   245;    Whitcomb    v.    Denio,    52 

V.  Reagan,  26  Ark.   373;  Ketchum  v.  Vt.    382;    Conner   v.    Hendt-rson,    15 

Brennan,    53    Miss.    596;    Van    Trott  Mass.    319;   S.   C.    8    Am.    Dec.    103; 

V.  Wiese,   36  Wis.  439;    Manahan  v.  Bassctt    v.    Brown,    105    Mass.    558; 

Noyes,  52  N.  H.  232;    Doll  v.   Kath-  Bartlett    v.    Drake,    ico    Mass.    174; 

man,    23   La.    Ann.   486;    Latham    v.  Vance  v.  Schroyer,  79  Ind.  380;  \'an 

Ricky,    21     La.    Ann.    425;    Lane   v.  Liew    v.    Johnson,    4    Hun     (N.    Y.) 

Latimer,  41   Ga.  171;   Estes   v.  Rey-  415;  Merman  v.   HafTcneggcr,  54  Cal. 

nolds,  75  Mo.  563.  161. 

'  Citing  Jaggers  v.  Griffin,  43  Miss.  '  2  Schouler's  Personal  Prop.  627. 

134- 

45 


7o6  PERSONAL'  REPRESENTATIVE.     ^§  5 1  I,  512 

back  his  price,  must  restore  the  chattel  to  the  seller,  unless 
he  can  show  that  it  is  of  no  intrinsic  value,  and  its  loss  no 
injury  to  that  party."  ^ 

§  511.  Personal  representative  cannot  avoid  his  own  voida- 
ble act. — Generally  speaking,  an  administrator  who  sells, 
mortgages  or  pledges  any  of  the  personal  property  of  the 
estate  in  payment  of,  or  as  security  for,  his  own  individual 
debt,  is  guilty  of  a  breach  of  trust,  but  the  administrator 
cannot  avoid  his  own  sale  or  pledge,  though  he  was  guilty 
of  a  breach  of  trust  in  making  it.  It  has  been  even  held 
that  if  he  dies  or  is  removed  and  an  administrator  de  bonis 
noil  is  appointed,  the  latter  cannot  avoid  the  wrongful  sale 
or  pledge  by  the  first  administrator.''^  Creditors,  legatees, 
and  distributees  are  the  persons  injuriously  affected,  and 
are  the  proper  parties  to  bring  suit  to  have  the  transactions 
avoided. 

§  512.  Avoidance  or  cancellation  of  void  or  voidable  instru- 
ments.— We  have  already  seen  that  judgments  may  be  pro- 
cured cancelling  instruments  and  papers  that  are  absolute 
nullities,  the  courts  proceeding  in  such  cases  upon  the  prin- 
ciple quia  timet.  "  The  cases  in  which  a  court  of  equity 
exercises  its  jurisdiction  to  decree  the  surrender  and  can- 
cellation of  written  instruments  are,  in  general,  where  the 
instrument  has  been  obtained  by  fraud,  where  a  defense 
exists  which  would  be  cognizable  only  in  a  court  of  equity, 
where  the  instrument  is  negotiable,  and  by  a  transfer  the 
transferee  may  acquire  rights  which  the  present  holder  does 
not  possess,  and  where  the  instrument  is  a  cloud  upon  the 
title  of  the  plaintiff  to  real  estate."  ^     The  distinction  in 


'  Citing  Clarke  V.  Dickson,  E.  B.  &  E.  Rand.  (Va.)  51;  Johnston  v.  Lewis, 
148;  Blackburn  v.  Smith,  2  Ex.  783;  Rice's  Eq.  (S.  C.)  40;  Young  v.  Kim- 
Dorr  V.  Fisher,  i  Cush.  (Mass.)  271  ;  ball,  8  Blackf.  (Ind.)  167;  Slaughter  v. 
Smith  V.  Smith,  30  Vt.  139;  Lyon  v.  Froman,  5  Monroe  (Ky.)  19;  Hagthorp 
Bertram,  20  How.  149.  v.  Neale,  7  G.  &  J.  (Md.)  13. 

"  Stronach  v.  Stronach,  20  Wis.  133.         '  Rapallo,  J.,  in  Town  of  Venice  v. 

See   Herron   v.    Marshall,   5   Humph.  Woodruff,  62  N.  Y.  466. 
(Tenn.)  443  ;  Coleman  v.  McMurdo,  5 


§5^3  REALTY    AND    PERSONALTY.  707 

this  regard  between  instruments  affecting  realty  and  those 
relating  only  to  personalty  is  worthy  of  notice.* 

§  513.  Distinction  between  instruments  affecting  realty  and 
personalty. — Bills  have  been  filed  for  the  purpose  of  cancel- 
ling promissory  notes,  bills  of  exchange,  policies  of  insur- 
ance, bonds,  etc.,  as  well  as  deeds,  mortgages,  and  other 
instruments  affecting  real  estate,  and  all  these  have  been 
repeatedly  entertained  by  the  courts.  There  is,  however, 
an  obvious  distinction  between  those  instruments  wiiich 
merely  create  a  personal  claim  against  a  complainant,  and 
those  which  affect  his  property,  and  especially  his  real  es- 
tate. The  first  can  rarely  do  him  any  injury  so  long  as 
they  remain  dormant,  while  the  latter  may  create  such  a 
cloud  upon  his  title  as  seriously  to  impair  its  value. '-^  In 
the  first  of  these  two  classes  of  cases,  the  question  is  in- 
volved in  some  doubt  whether  courts  of  equity  will  inter- 
fere to  set  aside  the  instrument  where  there  is  a  complete 
defense  at  law.  Lord  Thurlow  was  inclined  not  to  enter- 
tain jurisdiction  in  such  cases,'^  but  afterward  Lord  Lough- 
borough in  Newman  v.  Milner,*  and  Lord  Eldon  in  Brom- 
ley V.  Holland,^  and  in  Jervis  v.  White,^  took  the  opposite 
ground.  Chief-Baron  I^ichards  also,  in  Duncan  v.  Wor- 
rall,'''  admitted  with  apparent  reluctance  that  relief  might 
be  given  in  equity  against  a  policy  of  insurance,  notwith- 
standing it  was  entirely  void  at  law.  In  cases,  however, 
where  the  title  to  real  estate  is  or  may  be  affected,  it  seems 
never  to  have  been  regarded  as  a  sufficient  objection  to  a 
bill  seeking  relief  in  equity  that  the  complainant  has  a  per- 
fect lepfal  defense.  The  distinction  seems  to  have  been 
practically  taken  in  the  case  of  Byne  v.  Vivian.**     This  was 


'  Compare  Holden  v.  Hoyt,  134  Mass.  *  2  Vcs.  483. 

181,186.     See  §418.  '7Ves.  3. 

■-"  Ward  V.  Dewey,  16  N.  Y.  525.  *  7  Vcs.  413. 

'  Ryan  v.  Mackmath,  3  Bro.  C.  C.  '  10  Price  31. 

15;  Colman  v.  Sarrel,  i  Ves.  50;  Hil-  '  5  Vcs.  604. 
in  V.  Barrow,  i  Ves.  284. 


708  REALTY  AND  PERSONALTY.  §  513 

a  bill  to  cancel  an  annuity  bond,  and  came  before  Lord 
Chancellor  Loughborough  in  1800.  Three  years  before, 
the  same  learned  chancellor  had  refused  in  Franco  v.  Bol- 
ton,^ to  set  aside  a  similar  bond,  although  void,  on  the 
ofround  that  since  the  case  of  Collins  v.  Blantern^  the  de- 
fense  was  available  at  law.  An  examination  of  the  facts 
in  Byne  v.  Vivian,^  reveals  a  plain  reason  for  this  apparent 
inconsistency.  The  annuity  in  Franco  v.  Bolton  ^  was  se- 
cured by  a  personal  bond,  while  in  Byne  v.  Vivian^  the 
bond  was  accompanied  by  a  mortgage  on  real  estate.  In 
the  latter  case,  Mansfield,  counsel  for  the  defendant,  urged 
that  the  court  ought  not  to  entertain  jurisdiction,  for  the 
reason  not  only  that  there  was  a  good  defense  at  law,  but 
that  the  defense  appeared  upon  the  face  of  the  proceedings 
under  which  the  defendant  must  claim.  Sir  John  Mitford, 
on  the  other  hand,  pressed  the  consideration  that  the  secu- 
rity affected  the  title  to  real  estate.  He  said  :  "  This  is  an 
incumbrance  upon  the  estate  which  cannot  be  disposed  of 
till  this  term  is  disposed  of.  A  court  of  equity  has  taken 
jurisdiction  in  cases  where  the  security  has  been  void  at 
law.  The  party  has  a  right  to  come  to  have  the  property 
cleared,  and  that  the  other  shall  not  retain  the  security 
merely  to  keep  a  cloud  upon  the  title." 

The  distinction  between  cases  where  the  invalidity  of  the 
instrument  appears  upon  its  face  and  where  it  does  not  is 
now  universally  recognized.*^  But  Chancellor  Kent,  in 
Hamilton  v.  Cummings,''  came  to  the  conclusion,  after  an 
elaborate  review  of  the  cases,  that  it  was  unsound.  In  Cox 
V.  Clift,^  Gardiner,  J.,  said:  "Whatever  opinions  may  have 
formerly  obtained,   it   now  seems  to   be   established   that 


'  3  Ves.  371.  Meserole,  26  Wend.  (N.  Y.)  136  ;  Van 

-  2  Wils.  341.  Doren  v.  Mayor,  etc.,  9  Paige  (N.  Y.) 

^  5  Ves.  604.  388  ;  Cox  v.  Clift,  2  N.  Y.  118  ;  Peir- 

^  3  Ves.  371,  soil  V.  Elliott,  6  Peters  95. 

»  5  Ves.  604.  'I  Johns.  Ch.  (N.  Y.)  517. 

*  See  Simpson  v.  Lord  Howden,  3         '  2  N.  Y.  122, 
Myl.  &  Cr.  99 ;  Mayor  of  Brooklyn  v. 


§  513  REALTY  AND  PERSONALTY.  /OQ 

whenever  it  is  apparent  from  the  writing  or  deed  itself  that 
no  danger  to  the  title  or  interest  of  the  complainant  is  to 
be  apprehended,  a  court  of  equity  will  not  entertain  a  bill 
for  the  cancellation  or  delivery  of  the  instrument.  Nor  is 
there  any  reason  why  a  party  should  be  allowed  to  resort 
to  the  expensive  remedy  of  a  suit  in  chancery  to  procure 
the  relinquishment  of  a  right  which  it  is  obvious  the  de- 
fendant never  possessed,  and  against  which,  if  asserted,  the 
complainant  had  a  perfect  legal  defense  written  down  in 
the  title  deeds  of  his  adversary." 


INDEX. 

^References  are  to  sectz'onsj] 


ABANDONED  exemptions,  50. 

creditors  may  seize,  50. 

rule  applies  to  homestead,  50. 
ABOLITION  of  imprisonment,  2. 

cause  of  fraudulent  transfers,  2. 

effect  upon  remedies,  2. 

restricts  creditors'  rights,  2,  40 7^;. 
ABSCONDING  and  non-resident  debtors,  84. 

remedies  against,  84. 

policy  of  the  different  States,  84. 
ABSENCE,  of  jurisdiction  as  distinguished  from  excess  of  jurisdiction,  42  r, 

of  means  in  vendee,  241,  274. 
effect  of  proof  of,  241,  274. 
general  reputation  as  to  means,  admissible,  274. 

of  presumptions  of  fraud,  5,  6,  224. 
ACCOUNTING,  by  fraudulent  vendee  to  debtor,  176. 

effect  of,  176. 

vendee  need  not  account  second  time,  176. 

for  rents,  26,  176. 

for  improvements,  26. 

judgment  on,  51,  176. 
ACCUSED  person,  may  testify  as  to  intent,  205  n. 
ACQUIESCENCE,  482-495.     See  Ratification. 

by  laches,  148,  287. 

facts  insufficient  to  constitute,  491. 
ACTION,  alienation  pending,  157. 
ACTION  AT  LAW.     See  Creditors'  Remedies. 

creditors  may  proceed  by  execution,  59. 

treat  transfer  as  nullity,  59. 

does  not  interfere  with  remedy  in  equity,  60. 

advantages  of  suit  in  equity  over,  60. 


^12  Re/ere}ices'\         INDEX.         \  are  to  sections. 

ACTS,  void  and  voidable,  408-481. 

See  Void  and  Voidable  Acts. 

speak  louder  than  words,  8,  196. 

void  and  voidable,  408-446. 

void  by  statute  of  frauds,  436,  437. 

of  corporations  void,  438. 

four  classes  of,  ineffectual,  428. 

which  are  voidable,  426,  447. 

of  infants  and  of  lunatics  compared,  449. 
ACTUAL  motive  or  intent,  when  unimportant,  9,  10,  197,  322,  382. 
ACTUAL  AND  CONSTRUCTIVE  FRAUD,  60,  192. 

distinction  between,  as  regards  reimbursement,  192. 

fraud  in  fact  defeats  reimbursement,  192. 

the  principle  discussed,  192. 

change  of  possession  required,  253. 

intent  not  decisive,  10,  197,  322,  382. 
ACTUAL  NOTICE,  372-389.     See  Notice. 
ACTUAL  VIOLENCE,  not  essential  to  constitute  duress,  478. 
ADJUDICATIONS  to  avoid  nullities,  418,  512,  513. 

See  Judgments. 
ADMEASUREMENT,  dower  before,  available  to  creditors,  t,^. 

reached  in  supplementary  proceedings,  61. 
ADMINISTRATORS,  as  complainants,  112,  113. 

as  defendants,  136,  136  n. 

conveyance  binding  upon,  112,  113,  398. 

cannot  avoid  their  own  act,  511. 

may  sue  for  cancelled  debt,  42. 
ADMITTED  facts  in  pleading,  285. 

cannot  be  contradicted,  285. 
ADVERSE  POSSESSION,  as  defense  to  suit,  292. 
AFFIRMANCE,  of  voidable  acts,  482-495. 

of  common  law,  statute  of  Elizabeth,  16. 

knowledge  essential  to  ratification,  483. 

of  executor's  voidable  acts,  484. 

of  infants'  acts,  482^  488. 

effected  by  laches,  495. 

of  corporate  acts,  494. 

by  receipt  of  proceeds,  485. 

of  bill  of  lading,  490. 

by  acquiescence,  491. 

of  voidable  corporate  acts,  494. 
AFFIRMATIVE,  relief,  rule  as  to,  166. 


Re/erences^         INDEX.  [are  to  sections.  7^3 

AFFI  RMATlVE—contwtted. 

statute  does  not  repeal  common  law,  i6. 

proof  of  deceit,  5. 
AGENT,  husband  as,  for  wife,  303. 

fraud  of,  affects  principal,  198. 

voidable  purchase  by,  470,  472. 

affirmance  of  acts  of,  483. 
AGREEMENT  to  prefer,  validity  of,  390,  394. 
AID,  when  extended  to  grantors,  399,  400. 

See  Existing  Creditors,  Subsequent  Creditors. 
AIDING  DESCRIPTION,  by  evidence,  157. 
ALABAMA,  creditor  without  judgment  may  file  bill,  73  «. 

personal  representative  may  file  bill,  113  n. 
ALIENATION,  restraints  upon,  14,  361,  362. 

property  susceptible  of  fraudulent,  23. 

aversion  to  restraints  upon,  360. 

English  and  American  cases  concerning,  361  n. 

claims  prior  and  subsequent  to,  105. 

pending  suit,  157. 

doctrine  of  lis  pendens,  157. 
ALIMONY,  conveyance  to  defeat,  no  n. 

may  be  avoided,  no  n. 

receiver  for  collection  of,  188. 
ALIUNDE  evidence  of  fraud,  236. 
ALLEGING  insolvency,  143. 

fraud,  141. 

conspiracy  generally,  insufficient,  141. 

consideration,  144. 
See  Complaint. 
ALLOWANCE,  for  improvements,  192  ;/,  193  n. 

for  wife  may  be  reached  by  her  creditors,  «2. 
ALTERNATIVE  RELIEF,  when  extended,  153. 

cumulative  remedies,  65. 
AMENDMENT,  OF  COMPLAINT,  83,  156. 

as  to  description,  156. 

as  to  statement  of  value,  156. 

rule  as  to  permitting,  156. 

of  pleading,  discretionary,  156. 
ANCIENT  PRACTICE  as  to  necessity  of  judgment,  85. 
ANCILLARY  RELIEF,  by  equity,  60. 

collateral  to  maintain  action,  6^^. 

discovery  as,  147. 


714  Jie/erences'j        INDEX.         [ 


are  to  sections. 


"AND  OTHERS,"  meaning  of,  no. 

who  embraced  in,  no. 

claimant  of  alimony,  no  «. 
ANNUITIES  may  be  reached,  24,  45. 
ANOTHER  ACTION,  pending,  286^. 
ANSWER  OR  PLEA,  158-167. 
(i.)    Generally^  158. 

accepted  as  true,  when,  158,  159,  160. 

fraud  not  presumed,  5,  6,  158. 

denying  fraud  or  notice,  163. 

overcoming  denial  in,  159. 

as  evidence,  160. 

admission  and  avoidance,  164. 

evidence  of  witness  against,  160. 

receiver  before,  184. 
(2.)  Pleading  to  discovery  and  relief ,  161. 

rules  as  to,  161. 

particularity  of  denial  in,  162. 

avoiding  discovery,  165. 
(3.)  Affirmative  relief,  166. 

must  be  claimed  in  answer,  166. 

what  accomplished  by,  166. 
(4.)    Verification^  167. 

pleadings  usually  verified,  167. 

waiver  of  verification,  167. 

sworn  answer  taken  as  true,  160. 
ANTECEDENT  agreement  to  prefer,  394. 

creditors,  sharing  with  subsequent,  104. 
ANTEDATING  instrument,  badge  of  fraud,  229. 
ANTE-NUPTIAL    SETTLEMENT,   marriage    as   consideration,   212, 

306. 
ANTICIPATING  income  by  assignment,  367. 
APPARENT  FAIRNESS,  will  not  save  transaction,  241. 
APPARENT  LACHES,  excusing,  148. 
APPARENT  OWNERSHIP,  rights  acquired,  287. 
APPOINTMENT  of  receiver,  in  judgment,  170. 

in  supplementary  proceedings,  61,  116. 

of  corporation,  117. 

contests  over  realty,  187. 

to  collect  alimony,  188. 

of  various  interests,  188. 

when  matter  of  course,  184. 


Ee/et-encfsl         INDEX.  ^are  to  sections.  7^5 

APPO I NTM  ENT—contuiue^. 

in  foreclosure,  187  n. 
See  Receiver. 
ARREST  OF  DEFENDANT,  191. 

rule  in  New  York,  191. 

actual  intent  to  defraud  must  be  shown,  191. 

constructive  fraud  insufficient,  191. 

of  partner,  191. 

lex  fori  governs  right  to,  64,  191. 
ARTICLES  OF  SEPARATION,  310. 

become  voluntary  settlement  upon  reconciliation,  310. 
ASSAUET,  claims  for,  cannot  be  reached,  34. 

claims  do  not  pass  to  assignee,  316a. 

alienations  to  avoid  demands  for,  22. 
ASSERTIONS  OF  GOOD  FAITH,  inconclusive,  8. 

See  Bona  Fide  Purchasers. 
ASSETS,  available  to  creditors,  23^42. 

membership  of  stock  exchange  constitutes,  35. 

tangible  property  may  be  reached,  24. 

improvements,  rents,  and  profits  are,  26. 

crops  constitute,  27. 

exceeding  liabilities  in  assignments,  340. 

property  substituted  or  mingled,  28. 

estates  in  remainder  or  reversion,  29. 

equitable  interests,  30. 

equity  of  redemption,  31. 

reservations,  32,  272. 

of  corporation,  trust  fund,  117,  119,  139. 

choses  in  action,  2)Z- 

trade-marks,  36. 

book  royalties,  37. 

patent  rights,  38. 

powers,  39,  40. 

promises  of  third  parties,  43. 

income  of  trust  estate,  45,  360,  364,  366. 

intentional  omission  of,  345. 
What  are  not  assets. 

exempt  property,  46-50,  365. 

gifts  of  small  value,  41. 

powers,  in  New  York,  40. 

claims  for  torts,  34. 

income  of  trust  estate,  360-368. 

talents  or  industry,  50^. 


7l6  Jie/erences^         INDEX.  iare  to  sec/icns. 

ASSIGNED  PROPERTY,  value  as  affecting,  23. 
ASSIGNEE.     See  Fraudulent  General  Assignments. 

gets  title  to  trade-marks,  36. 

property  transferred  to,  316a. 

may  sue  in  replevin,  316a. 

not  an  officer  of  the  court,  316. 

control  of  courts  over,  316. 

general,  rights  of,  as  complainant,  115. 

attacks  fraudulent  conveyances  in  New  York,  115. 

in  bankruptcy,  114. 

title  of,  35,  ^6,  114,  irs,  364. 

may  sue  carrier,  316^/. 

exempting  from  liability,  334, 

authority  of,  to  compromise,  ^;^6. 

fraud  of,  337. 

innocent,  rights  of,  319. 

ignorance  or  incompetence  of,  as  badge  of  fraud,  338. 

as  defendant,  133. 

assignor  cannot  substitute  successor  for  assignee,  316. 

in  bankruptcy,  as  complainant,  1 14. 
represents  creditors,  114,  115. 
property  reverts  after  discharge,  114. 
discharge  of,  114. 
ASSIGNMENT,  316-346.     See  Fraudulent  General  Assignments. 

what  constitutes,  316. 

creditors  may  overturn,  108. 

assailing  and  claiming  under,  316  ;;. 

takes  effect  from  delivery,  316a;. 
ASSUMPSIT,  remedy  by,  62. 

will  not  lie  against  fraudulent  vendee,  62, 

damages  in,  62. 
ATTACHMENT,  against  property  in  name  of  third  party,  57. 

specific  lien  by,  81. 

not  sufficient  to  support  creditors'  bill,  81. 

judgment  in  suit  by,  77. 

simple  contract  creditors  may  have,  73  n. 
ATTACKING  CREDITORS,  status  of,  73-88. 

See  Status  of  Attacking  Creditors. 
ATTACKING  different  conveyances,  154. 

title  on  ground  of  fraud,  158. 
ATTORNEY,  authorized  to  take  supplementary  proceedings,  61  n. 

purchase  by,  of  client's  property,  474. 


Re/erences\         INDEX.         \  are /o  sections.  7^7 

ATTORNEY— con/inued. 

provision  for  fees  of,  335. 

renders  assignment  fraudulent,  335. 

as  fraudulent  vendee,  62. 

conspiring  with  debtor,  62. 

power  of,  by  infant,  454,  489. 
AUTHORITY  to  compromise  debts,  336. 

effect  of,  in  assignment,  ^^6. 
AVAILABLE  assets  for  creditors,  23-50,  50^'. 

what  interests  may  be  reached,  23-45. 

not  exempt  property,  46-50,  365. 

what  cannot  be  reached,  c,oa. 
AVERMENTS  of  complaint,  140-157. 

of  delivery  of  deed,  140  //. 

of  answer,  158-167. 

of  fraud,  141. 
AVERSION  to  exemptions  not  statutory,  360. 
AVOIDANCE  of  voidable  acts,  496-513. 

by  infant  a  personal  privilege,  496. 

acts  avoided,  497. 

acts  of  avoidance  as  compared  with  acts  of  affirmance,  498. 

by  infant,  499. 

of  infant's  deed,  500,  501. 

laches  of  infant  atfecting,  505. 

of  infant's  personal  contracts,  506. 

of  lunatic's  deed,  509. 

restitution  by  infant,  507. 

restitution  by  lunatic,  510. 

by  personal  representative,  511. 

of  void  or  voidable  instrument,  512. 
AVOIDING,  denial  in  answer,  159. 

voidable  acts,  496-513. 

must  be  overcome  by  competent  proof,  159. 

discovery,  165. 

nullities,  418. 
AWAKENING  SUSPICION,  is  notice,  379. 

BAD  FAITH,  in  selling  public  securities,  446^. 

See  Bona  P'ide  Purchasers. 
BADGES  OF  FRAUD,  224-244. 

(i.)  Indicia  or  badges  of  fraud,  6,  224,  225. 
what  constitute,  224, 


7l8  Re/erences\         INDEX.         ^nre  to  sections. 

BADGES  OF  YKh-UT)— indicia— continued. 

in  Tvvyne's  case,  22. 

theory  of  the  law,  224. 

"  a  fact  calculated  to  throw  suspicion  on  the  transaction,"  225. 

not  conclusive  evidence,  225. 

strong  and  slight  badges,  225. 

burden  of  proof  changed  by,  225. 

must  be  passed  upon  by  jury,  226. 
(2.)  Recital  of  fictitious  consideration,  228. 

how  considered,  228. 

important  badge  of  fraud,  228. 

must  be  intentional,  not  accidental,  228. 
(3.)  Antedating  instnimefit,  229. 

is  an  indicium  of  fraud,  229. 

date  not  essential  part  of  instrument,  229. 
(4.)  Vague  description  as  badge  of  fraud,  230. 

submitted  to  jury  as  a  circumstance,  230. 

how  explained,  230. 
(5.)  Generality  of  the  conveyaiice,  22,  231. 

raises  presumption  of  fraud,  231. 

different  views  of  the  courts,  231. 

regarded  as  unusual,  231. 

was  one  of  the  badges  in  Tvvyne's  case,  22,  231. 

various  illustrations,  231. 
(6.)   Inadequacy  of  purchase  price,  232. 

effect  of,  as  evidence,  232, 

does  not  prove  fraud,  232. 

unless  extremely  gross,  6,  232. 
( 7 . )   Transfer  pending  suit,  22,  157,  233. 

how  regarded,  233. 

scanned  with  much  suspicion,  233. 
(8.)   Secrecy,  evidence  of,  234,  272. 

is  fact  from  which  fraud  may  be  inferred,  234. 
(9.)   Suppression  or  conceabnent,  235,  236. 

subsequent  acts  of  fraud  avoiding  transfer,  235. 

failure  to  record  instrument,  235. 
(10.)   Concealment  in  fraud  of  bankrupt  act,  237. 

the  test  applied,  237. 
(it.)  Absolute  conveyance  by  way  of  security,  238. 

proving  absolute  conveyance  a  mortgage,  238. 

valid  if  no  fraud  intended,  238. 

effect  of  secret  resi  '•vation,  238. 

convenient  cover  f l  .-  fraud,  238. 


Re/erences^         INDEX,         \are  to  sections.  /IQ 


BADGES  OF  FRAUD— co7i/inued. 
(i2.)  Sa/es  upon  credit,  240,  332,  333. 

not  necessarily  fraudulent,  240. 

is  a  circumstance,  240. 

when  considered  fraudulent,  240. 
(13.)  Umtsual  acts  and  transactions,  241. 

many  illustrations,  241. 

unusual  particularity,  241. 

absence  of  memoranda,  241. 

false  receipt,  241. 

exceptional  and  peculiar  conduct,  241. 

absence  of  means  in  the  vendee,  241,  274. 
(14.)  Effect  of  relationship,  242. 

calculated  to  awaken  suspicion,  242. 

transaction  will  be  closely  scrutinized,  242. 

not  necessarily  evidence  of  fraud,  242. 

when  coupled  with  other  badge,  242. 
(15.)  Prima  facie  cases  of  fraud,  243. 

comments,  244. 
BAILEE,  cannot  set  up  fraudulent  title,  107  //. 
BANKRUPT  ACT,  concealment  in  fraud  of,  237. 

purpose  of,  to  defeat  preference,  390  n. 

''  void  "  in,  means  voidable,  445. 

assignee  under,  114. 
BANKRUPTCY,  bond  payable  on,  when  void,  364  n. 

assignee  in,  as  complainant,  114. 

discharges  as  a  defense,  294. 

property  reverts  after,  114. 

dower  not  barred  by,  315. 
BEGIN  AND  REPLY,  right  to,  271  n. 
BILL  IN  EQUITY,  68.     See  Creditor's  Bills. 

merits  of  relief  by,  discussed,  51,  60,  68. 

forms  of  relief,  4,  51-72. 
BILL  OF  LADING,  ratification  of,  void,  490. 
BILL  OF  PARTICULARS,  discretionary,  162^'. 

when  granted  or  refused,  162^'.  • 
BISPHAM,  definition  of  creditor's  bills  by,  68. 
BLACK,  J.,  views  as  to  presumptions,  7. 
BLATCHFORD,  J.,  views  of,  291. 

as  to  ignorance  of  fraud,  291. 

limitations  in  equity,  291. 
BLINDNESS  of  assignee,  badge  of  fraud,  338. 


720  Re/erences]         INDEX.  ^^are  io  sctriians. 

BONA  FIDE  purchasers,  21,  369-384.     See  Notice. 

rights  of,  superior  to  creditors,  369. 

theory  of  the  law,  369. 

payment  of  consideration  constitutes  substitution  of  property,  369. 

statute  27  EUz.,  21. 

plea  of,  163. 
(i.)  Title  of  purchaser,  hoiu  protected,  369. 

three  things  must  concur,  369, 

must  buy  without  notice,  369. 

must  be  purchaser  for  value,  369. 

burden  of  proof,  158. 
(2.)  Generality  of  the  rule,  370. 

when  equities  are  equal  the  law  prevails,  370. 
(3.)   Mortgagee  as  bona  fide  purchaser,  371. 

rule  in  New  York,  371. 

pre-existing  indebtedness  as  consideration,  371. 
(4).    Without  notice,  372. 

kinds  of  notice,  373. 

constructive  notice  of  fraud,  374-382. 

rule  in  Stearns  v.  Gage,  375,  376. 

Parker  v.  Connor,  378. 

facts  sufficient  to  excite  inquiry,  378,  380,  381. 

actual  belief,  382. 

purchaser  with  notice,  383,  384. 
BONA,  sed  impossibilia  non  cogit  lex,  83, 
BOOK  ROYALTIES,  may  be  recovered,  24,  37, 

remedy  to  recover,  37. 
BOTH  PARTIES,  must  be  implicated  in  fraud,  183. 
BRANDING  CATTLE,  sufficient  delivery,  262. 
BRETT  V.  CARTER,  rule  embraced  in,  353. 
BROADWAY  BANK  v.  ADAMS,  367- 

the  case  criticised,  367. 
BROTHER,  conveyance  by  sister  to,  not  fraudulent,  5. 
BURDEN  OF  PROOF,  158. 

conveyances  by  husband  to  wife,  301. 

rests  on  party  asserting  affirmative  of  the  issue,  271. 

generally  rests  on  creditor,  271. 

shifting,  by  showing  fraudulent  intent,  271. 

as  to  explanations,  271. 

as  to  consideration,  201. 

to  repel  presumption,  225. 

right  to  begin  and  reply,  271  n. 


J?e/erences\        INDEX.         lare  io  seciions.  721 

BUSINESS,  authorizing  trustee  to  continue,  330. 
continuance  by  insolvent,  143  71. 

CAMPBELL  V.  FOSTER,  relied  on  in  Nichols  v.  Eaton,  365. 

discarded  in  Williams  v.  Thorn,  45,  365. 

not  the  law  of  New  York,  45,  365. 
CANCELING  worthless  debt,  not  a  fraudulent  alienation,  23. 

debts,  when  fraudulent,  42. 

by  testator,  not  good  against  creditors,  42. 
CAPITAL  STOCK,  a  trust  fund,  117,  119,  68  «. 

See  Corporation. 
CARELESSNESS,  not  proof  of  fraud,  5. 
CASE,  action  on  the,  62. 

not  appropriate  against  vendee,  62. 

damages  too  remote,  62. 
CASE  V.  BEAUREGARD,  discussed,'  83. 
CATTLE  roaming  over  plains,  delivery  of,  262. 

requisites  of  the  change  of  possession,  262. 

branding  cattle,  sufficient  delivery,  262. 
CAUSE,  of  fraudulent  transfers,  2. 
CAUSES  OF  ACTION,  misjoinder  of,  135. 

uniting,  55,  154. 
CERTIFICATE  of  division,  407^:. 
CESTUI  QUE  TRUST  and  trustee,  137. 

suits  in  furtherance  of,  and  opposition  to  trust,  137. 

voidable  titles,  470,  471. 
CHAIN  of  evidence,  224. 

CHANGE  IN  ASSIGNMENT,  parties  cannot  make,  316. 
CHANGE  OF  POSSESSION,  delivery,  245,  246-267. 

concerning  possession,  245. 

defined,  245,  253,  257,  259. 

feature  of  Twyne's  case,  22,  245. 

changes  in  the  law,  245. 

undue  prominence  of  the  subject,  245. 

cases  of  bailments,  245. 

excusing  want  of  change  of  possession,  263. 

on  judicial  sale,  265. 

of  grooving  crops,  266, 
(i.)  Possession  as  proof  of  fraud,  247. 

pritna  facie  evidence,  247,  248. 

criticisms  of  the  doctrine,  247. 

statutory  policy,  247. 
46 


72  2  Re/erencesj         INDEX.  [are  io  sections. 

CHANGE  OF  POSSESSION— proof  of  fraud— contt;wed. 

New  England  cases,  249. 

rule  in  New  York  and  various  other  States,  250. 
(2.)   Conclusive  evidence,  when.,  251. 

theory  of  the  cases,  251. 

results  of  the  conflicting  policies,  252. 

the  principle  discussed,  252. 
(3.)  Actual  change  of  possession  required,  253. 

change  cannot  be  effected  by  words,  253. 

must  be  by  outward  and  visible  signs,  253. 

assumption  of  ownership  by  vendee,  253. 

questions  for  the  jury,  254. 

overcoming  the  presumption,  255. 
{4.)  Requisites  of  the  change,  253,  256,  257,  258,  259. 

possession  within  a  reasonable  time,  256. 

change  must  be  continuous,  257. 

temporary  resumption  of  possession,  258. 

concurrent  possession  insufficient,  259. 

possession  of  bailee,  260. 

no  delivery  where  purchaser  has  possession,  261. 
(5.)    When  technical  delive7'y  is  not  essential,  262. 

cattle  roaming  over  plains,  262. 

delivery  of  logs,  262. 

vessel  at  sea,  262. 

squared  timber,  262. 
(6.)   Change  of  possession  of  realty,  264. 

rules  as  to,  stated,  264. 
CHANGE  OF  VENUE,  territorial  jurisdiction,  157a. 
CHARACTERISTICS  of  fraudulent  conveyances,  15. 

made  to  avoid  a  debt  or  duty,  15. 

mutual  fraud  and  injury,  15. 
CHATTEL  MORTGAGES,  questions  affecting,  347. 

rights  of  purchaser  of,  168. 

when  fraudulent,  347-359- 

fraud  in  vitiate?,  357  n. 

of  perishable  property,  359. 
(i.)   Questions  affecting,  regulated  by  statute,  347- 

effect  of  record  of,  347. 

repels  presumption  of  fraud,  347. 
(2.)     Mortgage  ivith power  of  sale,  267,  348-355. 
,   rule  in  Rebinson  v.  Elliott,  348-351,  354. 

the  case  stated,  348. 


Re/erences}         INDEX.  [are  fo  sections.  7^"^ 

CHATTEL  MORTGAGES— z^'/V/^/^A'^r  of  sale— continued. 

similar  cases,  349. 

proof  extrinsic  to  the  instrument,  350. 

comments  in  the  cases,  351. 
(3.)  Rule  opposed  to  Robinson  v.  Elliott.,  352, 

Brett  V.  Carter,  and  similar  cases,  353. 

discussion  of  the  principle  involved,  354. 
(4.)   Sales  for  mortgagee' s  benefit,  355. 

considered  legal,  355. 

New  York  cases,  355. 

mortgagor  acts  as  agent,  355. 
(5.)  Sales  upon  credit,  240,  332,  t^^t,,  356. 

not  tolerated,  356. 

tend  to  hinder  and  delay  creditors,  356. 
(6.)  Possession,  independent  valid  transaction.,  357. 

void  mortgage  cannot  be  transmuted  into  valid  pledge,  357. 

pledge,  independent  of  fraudulent  mortgage,  sustained,  357. 
{1.)  Right  of  revocation  ;  reservations,  358. 

when  inconsistent  with  transfer  may  be  avoided,  358. 
(8.)  Rule  as  to  consumable  property,  359. 

mortgage  upon,  fraudulent,  359. 

when  valid,  359. 

intent  in  such  cases,  359. 
CHOSES  IN  ACTION,  convinous  transfers  of,  voidable,  17,  22,  TiZ- 

conflict  in  the  cases,  2>Z- 

true  rule  applicable  to,  ^^. 

what  included  in,  2,S  n. 
CIRCUMSTANCES,  proof  of  fraud  from,  5,  13,  224,  225,  281. 

evidence  of,  281. 

intent  inferred  from,  8. 

great  latitude  in  admission  of  evidence  of,  281. 

evidence  of,  wide  range  given,  281. 

proof  of  fraud  from,  must  be  strong,  281. 

test  as  to  admission  of,  281. 

direct  proof  of  fraud  not  attainable,  13. 
GIRCUMSTANTIAE  and  direct  evidence,  227. 
CLAIMS,  for  pure  torts  not  assignable,  34,  3i6rtr. 

injury  to  property  may  be  reached,  34. 

joinder  of,  54,  55. 

prior  and  subsequent  to  alienation.  105. 
CLASSES  of  fraudulent  conveyances,  15. 

three  elements  must  concur,  15. 


724  Re/erences\         INDEX.  \a.rs  to  sections. 

CLASSES — continued. 

of  infant's  acts,  451. 

of  defective  or  ineffectual  acts,  428 

of  creditors,  existing  and  subsequent,  89. 

of  creditors'  suits,  68,  68  }i. 
CLOUDS  ON  TITLE,  418  n. 

defined,  418  n. 

when  action  to  cancel  will  lie,  418  «.,  512   513. 

rule  as  to  real  estate,  418  ;z.,  513. 

owner  must  usually  wait  until  assailed,  418  n 

exceptions  to  the  rule,  418  fi. 

actions  will  not  lie  when  cloud  is  void  on  its  face,  418  n. 

test  as  to  a  cloud  on  title,  418  fi. 
CO-CONSPIRATORS,  declarations  of,  280. 

when  admissible,  280. 

must  relate  to  transaction  under  investigation,  280, 

purpose  of  the  rule,  280. 
COLLATERAL  ATTACK  of  transfers,,  rule  as  to,  69 

exceptional  practice  in  Louisiana,  69. 

of  void  act,  425. 
COLLATERAL,  reUef  to  main  action,  63. 

facts  as  evidence  of  fraud,  281,  282. 
COMITY,  between  States,  64,  346 

the  principle  applied,  64,  346. 

yields  in  favor  of  residents,  64,  46. 

recognition  of  receivers  by,  118. 
COMMERCIAL  PAPER,  void  and  voidable,  446a. 
COMMON  FUND,  when  liable  for  expenses,  109. 
COMMON  LAW,  suspension  of  alienation  void  at,  362 

statute  of  Ehzabeth  declaratory  of,  16, 

enjoins  integrity,  16. 

rule  as  to  presumption  of  its  existence,  64  n 

rule  as  to  competency  of  party,  269. 

statutory  proceedings  in  derogation  of,  469 

statutes  strictly  construed,  469. 

fraudulent  conveyances  at,  16. 

affirmative  statute  does  not  repeal,  16. 
COMPETENCY,  of  party  as  witness,  269. 

defendant  may  be  compelled  to  testify,  269. 

rule  of  the  common  law,  269. 

of  wife  as  witness,  313. 
COMPIJVINANTS,  who  may  be,  107-127,  89-106. 


Re/erences  \         INDEX.  \  are  to  seciions.         •  7 2*5 

COMPLAINANTS— continued. 

(i.)    Who  may  assail  fraudulent  conveyances,  73,  107. 

status  of  complainants,  73-88,  107, 

conveyances  voidable  only  as  to  creditors,  107,  395-404. 

question  of  parties  difficult,  107. 

sequestrator  as,  116. 
(2.)  Joinder  of  complainants^  108. 

creditors  by  several  judgments,  xo8. 

judgment-creditors  cannot  unite  at  law,  108  n. 

creditors  by  judgment  and  decree,  108. 

theory  as  to  joinder,  108. 

hostile  claimants  cannot  join,  108, 
(3.)  Sui?ig  for  others,  109,  no. 

rules  regulating,  109. 

"and  others"  interpreted,  no. 

equity  of  a  creditor,  no. 
(4-)   Surety,  subrogation  of,  in. 

entitled  to  stand  in  place  of  principal,  in. 
(5O  Executors  and  administrators,  112. 

ordinarily  bound  by  decedent's  act,  112,  398. 

statutory  changes,  112. 

may  now  impeach  fraudulent  transfers,  112,  113. 

importance  of  the  change,  113. 
(6.)  Assignees,  114,  115. 

assignee  in  bankruptcy,  114. 

title  of  general  assignee,  115. 
(7.)  Receivers,  116. 

rights  of,  as  complainants,  116. 

of  corporations,  117. 

who  are  represented  by,  1 1  7. 

foreign  receivers,  118. 

creditors  of  corporations,  119. 
(8.)  Rights  of  various  complainants,  120-127. 

sheriff,  81,  120. 

heirs,  121. 

when  heirs  cannot  sue,  121. 

husband  and  wife,  122,  298-315. 

widow,  when  not  proper  complainant,  121. 

tort  creditor,  123. 

overseer  of  the  poor,  124. 

creditors  having  liens,  125. 

purchasers  removing  incumbrances,  126. 


726  •        •'         Re/erences\         INDEX.  \are  to  sections. 

COMPLAINANTS — rights  of  various — continued. 

creditors  opposing  will,  127. 

wife,  when  creditor,  122. 
COMPLAINT,  requisites  of,  140-157^. 
(i.)  Recitals  of  the  complai7it,  140. 

complainants  must  be  creditors,  140. 

indebtedness  must  be  shown,  140. 

alternative  relief,  153. 

remedy  at  law  exhausted,  140. 

alleging  insolvency,  143. 

concerning  consideration,  144. 
(2.)  Pleading  fraud,  141. 

fraud  defined,  13,  141. 

alleging  fraud,  141. 

word  "fraud"  need  not  be  used,  141. 
(3.)  Evidence  not  to  he  pleaded,  142. 

general  certainty  sufficient,  142, 

circumstances  not  to  be  minutely  charged,  142. 

circumstances  implied  in  law,  142. 
(4.)  Pleading  in  equity,  60,  146. 

more  liberal  than  at  law,  146. 

seeking  discovery,  147. 

excusing  laches,  148. 

explaining  delay ;  discovery  of  fraud,  T49. 
(5.)  Multifariousness,  150,  151,  152, 

complaints  bad  for,  150. 

pleadings  held  not  to  be,  151,  152. 
(6. )  Details  of  complaint.,  1 5  5- 1 5  7 • 

prayer  and  verification,  155. 

amendment  of,  156. 

description  in,  157. 
COMPOSITION  WITH  CREDITORS,  must  be  fair,  393. 

contract  securing  secret  advantage,  432. 
COMPROMISE,  power  in  assignee  to,  336. 

how  construed,  2^T^(i. 

with  creditors,  must  be  honest,  393. 

effect  of  secret  preferential  agreement,  393. 

when  a  fraud  upon  other  creditors,  393. 

antecedent  agreement  to  prefer,  394. 
CONCEALMENT  OF  FRAUD,  148,  234,  235. 

pleading  concerning,  148. 

in  fraud  of  bankrupt  act,  237. 


References^         INDEX.         \are  to  sections.  7 '^7 

CONCLUSIVENESS  of  judgments,  74,  168,  270. 

of  transfers  between  parties,  395-401. 
CONCURRENT  remedies,  legal  and  equitable,  51,  60. 

cumulative  remedies,  65. 

possession  insufficient,  259. 
CONDITIONS  treated  as  void,  361. 

repugnant,  are  void,  362. 

what  are,  363  n. 
CONDONATION  of  fraud,  perfects  title,  370. 
CONDUCT  that  is  fraudulent,  13. 
CONFESSIONS  of  different  judgments,  54. 

may  be  attacked  in  one  suit,  54. 

collusive  confessions  avoided,  74  «.,  174. 

by  administrator,  74  n. 

sufficient  to  uphold  creditor's  bill,  76. 

transfer  by  confessed  judgment,  174. 
CONFORMING  testimony  to  pleadings,  285. 
CONSIDERATION,  inadequacy  of  as  evidence  of  fraud,  6. 

disparity  must  be  great,  6,  232. 

allegations  of  complaint  concerning,  144. 

general  subject,  207-223. 

paid  by  debtor  for  third  party,  57,  57  «. 
( I . )  Concerning  consideration  and  good  faith,  207-223. 

defined,  207,  209. 

moral  obligations,  215, 

when  important  as  affecting  alienations,  207. 

what  is  valuable  consideration,  209. 

services  by  member  of  family,  218, 

sufficient  consideration,  222. 

insufficient  consideration,  223. 

alleging,  144. 
(2.)  Voluntary  conveyance,  208. 

implies  total  want  of  substantial  consideration,  208. 
(3.)  Good  and  valuable  consideration,  210  n. 

Judge  Story's  views,  210  «. 
(4.)  Marriage  as  consideration,  212,  306. 

the  cases  reviewed,  212. 

when  part  of  fraudulent  scheme,  306. 

no  other  consideration  so  highly  respected,  212. 
(5.)  Illegal  consideration,  214. 

illicit  intercourse,  213. 
(6.)   Proofs  of  consideration.,  219. 


720  /ie/erencesl         INDEX.         \  are  io  sccizotis. 

CONSI DERATION— /r^^/y  of— continued, 

recitals  as  evidence,  220. 

explaining  recitals,  221. 

may  be  varied  by  parol,  221. 
CONSPIRACY,  remedy  by  action  of,  62. 

damages  in  action  for,  62. 
CONSPIRATORS,  declarations  of,  280. 

why  admitted,  280. 

statement  of  one  witness,  280. 
CONSTRUCTION,  of  instrument,  intent  gathered  from,  10,  322. 

rules  of,  same  in  equity  as  at  law,  51. 

of  assignments,  343. 

of  bill,  54,  146. 

statutes  as  to  frauds,  liberal,  19,  20. 

in  derogation  of  common  law,  469. 

strictly  construed,  469. 

rule  in  Twyne's  case,  20,  22. 

principle  applying  to  construction,  20. 
CONSTRUCTIVE  FRAUD,  does  not  justify  arrest,  191. 

reimbursement  allowed  in  cases  of,  192. 

defined  by  Story,  323. 

is  a  conclusion  of  law,  163. 
CONSTRUCTIVE  NOTICE  OF  FRAUD,  374,  382. 

See  Notice. 
CONSUMMATED  illegal  acts,  439. 
CONTEMPLATION,  of  future  indebtedness,  96,  97,  100. 

subsequent  creditors  must  show,  96. 

of  marriage,  fraud  in,  314. 
CONTEMPT,  depends  upon  act  done,  196  ;/. 
CONTINGENT  CREDITORS,  entitled  to  protection,  90. 
CONTINGENT  REVERSIONARY  INTEREST,  recoverable,  29. 

remainder  not  liable  to  execution,  29  ;/. 
CONTINUOUS,  change  of  possession  must  be,  257. 
CONTRACT  CREDITORS,  rights  of,  73,  73  n. 
CONTRACTS,  of  infants  voidable,  452. 

of  lunatics,  460. 

what  incapacity  must  be  shown,  461. 

and  devices,  fraudulent,  447^. 
CONTRAVENING  STATUTES,  assignments,  324. 
CONTRIVANCE,  to  cover  up  fraud,  149. 

evidence  of,  335. 
CONTROVERSY,  all  parties  interested  should  be  joined,  128. 


References^         INDEX.         ^are  to  sections.  729 

CONVERSION,  claim  passes  to  assignee,  T,i6a. 
CONVEYANCE,  hindering  creditors  by  its  terms,  voidable,  9. 

fraudulent  at  common  law,  16. 

of  whole  estate,  presumption  of  fraud,  22,  231. 

valid  between  parties,  395-399. 

the  theory,  396. 

fraudulent,  defined,  15. 

meaning  of  word,  14  n. 

of  choses  in  action,  fraudulent,  17,  2,2>- 

avoided  by  subsequent  creditors,  101. 

avoided  in  ejectment,  69,  69  n. 
COPARTNERS,  and  fraudulent  alienees  as  defendants,  54. 

may  sue  copartner  and  fraudulent  alienee,  54. 

special,  cannot  be  preferred,  329. 

arrest  of,  191. 

debts  of,  216. 

preferring  claims,  329. 

rights  of,  limited,  329. 

corporators,  when  liable  as,  139. 

limited  partnership  assets,  trust  fund,  329. 
CORPORATE  ACTS,  affirmance  of,  voidable,  494. 

void,  438. 
CORPORATION,  creditors  of,  may  file  bill,  t,2,,  119. 

may  be  joined  in  bill  as  defendant,  128. 

receiver  of,  rights  to  bring  suit,  117. 

and  individuals  on  same  footing,'ii9. 

acts  of,  ultra  vires,  411. 

organized  for  fraudulent  design,  15. 

assets  of  trust  fund,  117,  119,  139. 

continuing  business  when  insolvent,  143  n. 

stockholders  of,  suit  against,  139. 

when  corporators  liable  as  partners,  139. 

may  kdopt  voidable  act,  494. 

rules  relating  to  subsequent  creditors,  applied  to,  100. 

when  insolvency  not  ground  for  receiver,  239  ji. 

no  discharge  granted  to  in  bankruptc)',  294  n. 

rules  as  to  fraudulent  conveyances  apply  to,  199  //. 

assignments  by,  346^7. 
COSTS,  judgment  for,  rights  of  creditors,  90  n. 
COUNSEL  FEES,  providing  for  in  assignment,  335. 
COUNTERFEIT  MONEY,  payment  in,  447a. 
COUNTY,  creditor's  bill  against,  139  n. 


7^0  Re/erences\         INDEX.         \are  to  sections. 

COVNTY—cofitinued. 

jurisdiction  outside  of,  406, 

execution  issued  to,  68. 
COUPONS,  suit  for  judgment  on  and  mandamus  united,  85  n. 
COVINOUS  alienations  of  exemptions,  48. 
COVINOUS  TRANSFERS,  16-17. 

of  choses  in  action,  17,  t,;^. 

valid  between  the  parties,  395-400. 
CREDIT,  sales  upon,  240,  332,  2,2>3- 

effect  of,  332,  333. 
CREDITORS,  status  of.     See  Status  of  Attacking  Creditors. 

of  attacking  creditors,  73-88. 

who  are  not,  91. 

right  of,  to  oppose  probate  of  will,  127. 

when  they  may  sue  stockiiolders,  119. 

when  wife  is  creditor,  122. 

policy  of  the  law  to  protect  assets  available  to,  23-50. 

existing  and  subsequent,  89-106. 

must  invoke  process  against  debtor,  52. 

recitals  not  binding  on,  221. 

See  Existing  Creditors  ;  Subsequent  Creditors. 
CREDITORS'  ACTIONS,  purpose  of,  4. 

bill  to  reach  surplus  income,  360 

of  corporations,  relief  to,  119. 

who  may  be  complainants,  107-127. 
CREDITORS  AT  LARGE,  rights  of,  52,  73. 

cannot  assail  debtor's  transfers,  73. 

not  entitled  to  injunction,  52,  73. 

rights  of,  not  favored  in  equity    73. 

of  a  decedent,  79. 
CREDITORS'    BILLS,  68.     See  Creditors'  Remedies;  Supplemen 
tary  Proceedings. 

why  preferable,  60. 

merits  of  relief  in  equity  discussed,  60. 

object  of,  in  New  York,  68. 

to  reach  equitable  assets,  68. 

execution  must  precede,  6i. 

filing  of,  creates  hen,  61,  68,  392. 

fraudulent  conveyances  annulled  by,  68. 

usually  regulated  by  statute,  68. 

distinguished  from  bill  in  equity,  68. 

is  in  nature  of  a  discovery,  68. 


Xe/erences'j         INDEX.         ^are  to  secdotu.  73 1 

CREDITORS'  BILLS— conf I fmed. 

two  kinds  of,  68,  68  //. 

complainants  in,  107-127 

defendants  in,  128-139. 

of  fraudulent  grantee,  387. 
CREDITORS'  REMEDIES,  51-72.     See  Remedies  of  Creditors. 

legal  and  equitable,  51. 

injunction  against  debtor  before  judgment  disallowed,  52. 

exceptions  to  the  rule,  53. 

joinder  of  claims,  54,  55. 

land  in  name  of  third  party,  57. 

relief  before  and  after  sale,  58. 

at  law  and  in  equity,  59,  60. 

supplementary  proceedings,  61. 

assumpsit,  case,  conspiracy,  62. 

relief  collateral  to  main  action,  6;^. 

remedy  governed  by  /ex  fori,  64. 

cumulative  remedies,  65. 

various  illustrations,  65. 

election  of  remedies,  67.  ; 

creditors'  bills,  68. 

direct  and  collateral  attack,  69. 

in  federal  courts,  71. 

recapitulation  of,  72. 
CRIME,  fraud  in  light  of,  not  considered,  3. 

indictment  changing  fraud,  65  n. 
CRIMINATING  disclosure,  party  need  not  make,  165. 
CROPS,  rule  as  to,  27. 

liable  to  creditors'  remedies,  27. 

delivery  of,  266. 
CROSS-BILL,  affirmative  relief,  166. 

homestead  protected  by,  166. 
CROSS-EXAMINATION  OF  PA]R.TY,  281. 

great  latitude  allowed,  281. 
CROSS-PETITION,  relief  by,  166. 
CUMULATIVE  REMEDIES,  allowed  and  disallowed,  65. 

civil  and  criminal  jurisdiction,  65. 

election  of  remedies,  67. 
CURTESY,  right  of,  available  to  creditors,  30. 

reached  by  creditors'  bill,  30. 

DAMAGES,  judgment  for,  not  allowed  in  equity,  51. 
decree  must  be  for  an  accounting,  51. 


y  "12  Re/erettcesl         INDEX.         ^nre  to  sectians. 

DAMAGES — continued. 

too  remote  in  action  of  case,  62. 

exceptional  cases,  62. 

in  action  for  conspiracy,  allowed,  62. 

in  assumpsit,  62. 
DATE  OF  AGREEMENT,  governs  creditors'  rights,  90. 

antedating  instrument,  229. 
DAUGHTER,  claim  for  services,  218. 

no  promise  to  pay  implied,  218. 
DE  MINIMUS  NON  CURAT  LEX,  281. 
DEATH,  of  receiver,  title  on,  189. 

punishment  of  insolvent  under  Roman  law,  i. 

rule  as  to  in  England,  i  n. 

of  debtor,  effect  on  lien  in  supplementary  proceedings,  61  «. 
DEBT,  worthless,  cancellation  of,  not  fraudulent,  23. 

foundation  of  the  principle,  23. 

forgiven  or  cancelled,  when  fraudulent,  42. 

administrator  may  sue  for,  42. 

must  be  in  judgment  before  fiUng  bill,  73. 

equity  not  forum  to  collect,  73. 

property  of  debtor  must  be  devoted  to  payment  of,  14. 

judgment  conclusive  as  to,  74,  270. 
DEBTOR,  reservation  by,  avoids  conveyance,  10,  32,  272. 

as  defendant  in  creditors'  suit,  128,  129. 

rule  as  to,  128. 

insolvency  of,  273. 

injunction  against,  before  judgment,  disallowed,  52. 

theory  of  the  law,  52. 

exceptions  to  the  rule,  53. 

secret  trust  for  benefit  of,  272. 

punishment  of,  in  early  times,  i  n.    ^ 

cannot  secure  delay,  1 1. 
DECEDENT,  creditors  of,  79. 

when  must  have  judgment,  79. 

confusion  in  the  cases,  79. 

theory  of  the  law,  79. 

judgment  necessary  in  New  York,  79. 

personal  transactions  with,  121. 
DECEIT,  action  for,  innocence  presumed,  5. 
DECLARATIONS  before  and  after  sale,  277. 

as  to  realty  and  personalty,  277. 

declarations  after  sale,  278 


J?e/erences\         INDEX.  I  are  io  sections.  "7 

DECLARATIONS— conit'nued. 

of  co-conspirators,  280. 

of  past  transactions,  276. 

as  to  acts  sui  generis  with  those  committed,  280. 

not  received  to  prove  the  conspiracy,  280. 

admitted  to  show  its  scope  and  extent,  280. 

of  one  witness  as  to  the  conspiracy,  280. 
DECLARATORY,  of  common  law,  statutes  are,  16. 
"  DECLARE,"  word  commented  upon,  t6. 
DECREE,  168-183.     See  Judgment. 

when  conclusive,  168. 

afifecting  foreign  land,  1 5  y^r 

must  accord  with  relief  demanded,  181. 

conform  to  complaint,  182. 

personal,  against  vendee,  177,  178. 
DEDUCTION  OF  FRAUD  from  facts  and  incidents,  224,  281,  282. 
DEED,  avoidance  of,  by  infant,  500,  501. 

fraudulent,  mistake  in  not  corrected,  3q6. 

when  sufficient,  501. 

disaffirmance  of  lunatic's  deed,  508. 

avoidance  of  void  or  voidable  instruments,  418  «.,  512,  513. 

evidence  sufficient  to  overturn,  6. 

not  avoided  by  loose  evidence,  6. 

delivery  of  should  be  averred,  140. 
DEFECTIVE,  or  ineffectual  acts,  classes  of,  428 

complaint,  140. 
DEFENDANT,  parties,  128-139. 

(i.)  Debtor  as  defendant  in  creditors'  actions,  128,  i2g. 

general  rule  stated,  128. 

conflict  in  tl>e  cases,  128,  129. 

when  debtor  not  necessary  defendant,  129.  ] 

result  of  the  cases,  129. 

defendants  need  not  be  equally  guilty,  130. 
(2.)  Fraudulent  grantee  must  be  Joined,  131 

the  reason,  131. 

parties  to  intermediate  conveyances,  131. 
(3.)  Assignee  and  receiver,  133. 

assignee  of  a  firm  a  defendant,  133. 

raising  objection  to  non-joinder,  133,  134. 
(4.)  Executors,  administrators,  heirs,  and  legatees,  136 

rule  as  to  joinder  of,  as  defendants,  136. 

Cornell  v.  Radway,  136  n. 

result  of  the  cases,  136. 


yiA  Re/erences\         INDEX.  \are  to  sections. 

D  EFEN  D  A  'i^T— continued. 

(5.)   Trustee  and  cestui  que  trust,  137- 

distinction  in  the  cases,  137. 

affirmance  and  disaffirmance  of  the  trust,  137. 
(6.)   Generally,  132,  136,  138,  139. 

stockholders,  139. 

parties  having  liens,  138. 

arrest  of,  191. 
DEFENSES,  as  to,  286-297. 

"forms"  no  protection,  286. 

transaction  judged  by  real  character,  286. 

principal  defenses,  286,  369-371. 

rebutting  fraud,  158. 

of  discharge  in  bankruptcy,  294  n. 

imprisonment  of  debtor,  66 

against  attachment,  81. 
(i.)  Laches  as  a  defense,  287. 

excusing  apparent,  148,  149. 

equity  will  not  aid  party  guilty  of,  287. 

stale  demands  disallowed,  287,  289. 
(2.)  Lapse  of  time,  109,  288,  289. 

constitutes  a  defense,  288. 

various  illustrations,  288,  289. 
(3.)  Discovery  of  the  fraud,  290. 

statute  does  not  begin  to  run  until,  290. 

effect  of  a  different  rule,  290. 

Judge  Blatchford's  views,  291. 
(4.)  Statute  of  limitations,  292,  293. 

runs  from  notice  of  fraud,  292. 

must  be  pleaded  as  defense,  292. 

limitations  in  equity,  293. 
(5.)  Lfisolvency  or  bankruptcy  discharges,  294. 

have  no  extra-territorial  force,  294. 

not  conclusive  on  non-residents,  294. 

the  reasons  stated,  294. 

pleading  discharge,  294  n. 
(6.)   Generally,  295. 

existing  and  subsequent  creditors,  96-101,  295. 

fraud  upon  subsequent  creditors,  100,  295. 

what  sheriff,  must  show  against  stranger,  297. 

by  bailee,  107  n. 
DEFINITION  of  fraud,  none  possible,  13. 


Re/erences\         INDP2X.         \  are /o  sections. 

DEFINITION— coniin7/eii. 

judgment  of  law  on  facts  and  intents,  13. 

undue  influence,  13  /;. 

void  act,  415,  425. 

voidable  act,  420,  426. 

void  and  voidable  acts,  412,  415,  425,  426. 

of  fraudulent  conveyances,  15. 

of  creditors'  bill,  68. 
DEGREES  of  guilt,  399,  400. 

of  void  acts,  413,  419. 
DELAY,  sales  upon  credit,  240,  332,  ;^;^;^. 

and  hindrance,  11,  318. 

applied  to  general  assignments,  318,  ;^;i^. 

defraud,  and  hinder,  11. 

refers  to  time,  3x8. 

hindrance  to  obstacles,  318. 

debtor  cannot  secure,  318. 
DELAY  OF  CREDITORS,  n. 

and  hinder,  11. 

explaining,  in  pleading,  149. 

refers  to  time,  318. 

hindrance  to  obstacles,  31 8. 

debtor  cannot  secure,  11. 
DELIVERY,  245-267. 

See  Change  of  Possession. 

essential  to  validity  of  sale  as  against  creditors,  245-267 

failure  to  effect,  presumption  of  fraud,  248, 

conflicting  policies  as  to,  252 

must  be  actual,  253. 

must  be  continuous,  257,  258. 

of  growing  crops,  266. 

of  possession  of  realty,  264. 

when  not  essential,  261,  262. 

symbolical,  262. 

of  deed  should  be  averred,  140  n. 

assignment  takes  effect  from,  ^i6a. 
DENIAL  IN  ANSWER,  158-162. 

particularity  of,  163. 

of  fraud  or  notice,  163. 
DENYING  FRAUD  or  notice,  163. 
DESCRIPTION  in  complaint,  157. 

assets  need  not  be  specifically  disclosed,  157 


J -id  Re/eyences~^         INDEX.  ^arc  to  scctious. 

D  ESC  R I PT 1  ON—cojiiinued. 

sufficient  to  operate  as  lis  pendens,  i57- 

discovery  may  be  called  for,  157. 

in  marriage  settlement,  157  n. 

vague,  as  badge  of  fraud,  230, 

amendment  of  complaint,  156. 
DEVISE  OF  PROFITS  is  devise  of  land,  362. 
DEVICES,  ineffectual  against  creditors,  15. 
DIRECTORS,  cannot  make  personal  profits,  470. 
DIRECT  AND  COLLATERAL  ATTACK,  69. 

necessity  for,  69. 

exceptional  doctrine  in  Louisiana,  69. 

merits  of  rule,  discussed,  69. 
DISAFFIRMANCE  OF  VOIDABLE  ACTS,  496-513- 

a  personal  privilege,  496 

general  requisites  of,  498. 

by  infant,  499,  500,  501,  506. 

laches  affecting,  505. 

by  lunatic,  508,  509. 

personal  representative,  511. 

restitution,  507,  510,  510^:. 
DISCHARGE,  in  insolvency  or  bankruptcy,  294. 
DISCOVERY,  seeking,  147. 

of  fraud,  statute  begins  to  run,  290,  291. 

creditors'  bill  is  in  nature  of,  68,  68  n. 

advantages  of,  68  n. 

pleading  to  the  discovery,  and  the  relief,  x6i. 

avoiding  discovery,  165. 

of  lands,  inherited  or  devised,  157.  . 
DISHONEST  PURPOSE  not  presumed,  5. 

not  necessary  to  defeat  conveyance,  8,  9,  10,  382. 

secret  removal  of  property,  234. 
DISJUNCITVE,  words  hinder,  delay  or  defraud  used  in,  11. 
DISMISSAL  of  receiver,  190. 

of  assignee,  337. 
DISPARITY,  as  to  consideration,  6,  232. 

must  be  glaring,  6,  232. 
DISPOSED,  word  construed,  12. 
DISSOLUTE  man,  conveyance  by,  213  n. 
DISSOLUTION,  appointment  of  receiver  does  not  effect,  134. 
DISTINCT  claims  united,  54. 
DISTINCTION  between  void  and  voidable  acts,  408,  420. 


Re/erences\         INDEX.         ^nre  fo  sdious.  y  2)7 

DISTINCTION— co;i//nued. 

existing  and  subsequent  creditors,  89. 

acts  of  infants  and  of  lunatics,  449. 

titles  voidable  for  infancy  and  for  fraud,  448. 

fraud  in  fact  and  fraud  in  law,  9,  10,  322,  382. 
DISTRIBUTEES,  reaching  money  of,  3^. 
DIVISION,  certificate  of,  review,  407a. 
DIVORCE,  after,  when  wife  cannot  overturn  conveyance,  395  ;/. 

conveyance  to  defeat  alimony,  110  //, 
DOCTRINE  of  degrees  of  void  acts,  413. 

o{  ultra  vires,  411,  411  n. 
DOWER  RIGHT,  creditors  may  reach,  30. 

before  admeasurement,  t^t^. 

in  supplementary  proceedings,  6t. 

relief  in  cases  of  fraud  on,  70. 

relinquishment  as  consideration  for  settlement,  299. 
DRUNKARD,  not  always  incompetent,  476. 
DRUNKENNESS,  legal  effect  of,  476. 
DURESS,  its  nature  and  class,  478. 

of  goods,  479. 

involuntary  payments,  480. 

theory  of  recovery,  479,  480. 

insisting  upon  legal  rights  is  not,  478. 

as  10  married  women,  478. 

by  i)awnbroker,  479. 

must  be  threatened  exercise  of  power,  480. 

when  payment  compulsory,  4S0. 

EARLY  STATUTES  avoiding  fraudulent  conveyances,  18. 

declaratory  of  common  law,  16. 

object  of  statutes,  18. 

13  Eliz.,  c.  5,  and  its  object,  19. 

its  interpretation  and  construction,  20. 

27  Eliz.,  c.  4,  and  its  object,  21. 
EARNINGS,  not  liable  in  supplementary  proceedings,  61  ;/. 

exempt  for  sixty  days,  61  //. 

of  daughter,  218. 

of  wife,  218. 

of  members  of  family,  218. 
EFFECT  of  avoidance,  427. 
EJECTMENT  and  equitable  relief  united,  54. 

conflict  in  the  cases,  54. 
47 


7 'iS  References^         INDEX.  \are  to  sections. 

EJECTMENT— ^^«//V«/^//. 

no  receiver  in,  187. 

theory  of  the  law,  187. 

rule  as  to  receiver  in  New  York,  187. 

conveyance  avoided  in,  51. 

by  execution  purchaser,  57. 

when  purchaser  may  defend  in,  69. 

what  may  be  shown,  69  n. 

question  of  fraud  tested  by  jury  in,  123. 

lunatic's  deed  void  in,  423, 
ELDON,  LORD,  views  of,  as  to  restrictions  on  life-estate,  364. 
ELECTION  OF  REMEDIES,  67,  316  «. 

debtor  or  alienee  cannot  compel,  67. 
ELIZABETH,  statutes  of,  19-21,  408. 

object  of,  II,  19. 

interpretation  and  construction  of,  20,  408. 

interpretation  refers  to  legal  intent,  8. 

bottomed  on  immoral  intention,  9  n. 

merely  declaratory  of  common  law,  16. 

universally  adopted,  19,  22. 

Mr.  Reeves'  comments  upon,  19. 

preamble  to,  25. 
EMBARRASSED  DEBTOR,  conveyance  by,  99. 

when  considered  valid,  99. 

the  cases  criticised,  99. 

the  conclusion  drawn  from  them,  99. 
EMOTION,  intent  is,  8,  196,  196  Ji. 

not  conclusive,  197,  322,  382. 

fraud  without  evil  emotion,  8,  382. 
EMPLOYMENT,  of  husband  by  wife,  303. 

of  assignors,  345,  390  n. 
ENFORCING  promises  of  third  parties,  43. 
ENGLISH  STATUTES  as  to  property  recoverable,  25. 

concerning  fraudulent  conveyances,  16,  18,  19-22. 
EQUALLY  GUILTY,  defendants  need  not  be,  130. 
EQUILIBRIUM,  of  evidence,  does  not  prove  fraud,  5. 
EQUITABLE  fraud,  meaning  of,  51. 

subrogation,  when  not  applied,  195  n. 

estoppel,  287. 
EQUITABLE,  INTERESTS,  30. 

frequent  subject-matter  of  creditors's  suits,  30. 

action,  judgment  in,  80. 


He/erencesl         INDEX.         \  are  to  sec/zons.  7^Q 

EQUITABLE,  INTERFSrS—con/inued. 

suit,  60. 

jurisdiction,  4,  51,  56,  60, 

levy,  68,  392. 

in  real  property,  sifus  governs,  24. 
EQUITIES  are  equal,  law  prevails,  370. 

applied  to  bona  fide  purchasers,  370. 
EQUITY,  invoked  in  two  cases,  51. 

See  Creditors'  Remedies. 

in  furtherance  of  remedy  at  law,  51. 

to  reach  equitable  rights,  51,  60. 

reasons  for  resort  to,  51,  60,  176  ;?. 

purchase  at  law  either  valid  or  void,  51. 

different  rule  in  equity,  51. 

when  jurisdiction  exclusive,  56. 

relief  before  and  after  sale,  58. 

the  jurisdiction  explained,  58,  60. 

jurisdiction,  its  great  importance,  60. 

proceeds  without  regard  to  forms,  60,  60  n. 

jurisdiction  once  acquired  holds  throughout,  Gt,. 

power  of,  to  protect  right  of  dower,  70. 

not  remedy  to  collect  debts,  73. 

of  a  creditor,  no. 

pleadings  in,  rules  of,  146. 

limitations  in,  293. 

procedure  in  federal  courts,  71. 

cannot  create  a  title,  60  n. 
EQUITY  OF  REDEMPTION,  available  to  creditors,  31. 

transaction  to  conceal,  31. 
ERRONEOUS,  and  irregular,  words  discussed,  444. 

judgment,  correction  ot",  172. 
ESTATES,  in  remainder  and  reversion,  29,  30. 

vested  remainder  liable  for  debts,  29. 

attempted  exemption  of,  29,  360-368. 

contingent  reversionary  interest,  29. 

creditors'  bills  against,  68. 

no  preference  to  vigilant  creditors,  392. 
ESTOPPEL,  does  not  operate  against  infants,  504. 

theory  of  the  law,  504. 

equitable,  287. 

against  cestui  que  trust,  485. 
receipt  of  proceeds  of  sale,  485. 


y  AO  lie/erences  \        INDEX.         \  are  to  sectiotts. 

^^HO^Vm.— continued. 

element  of,  introduced,  484. 

to  attack,  316  //. 

when  not  operative,  413  n. 

judgment  is,  168. 
EVIDENCE,  268-285. 

See  Badges  of  Fraud. 

to  prove  fraud,  5,  6. 

creating  equilibrium  insufficient,  5. 

to  annul  instrument  in  writing,  6. 

not  to  be  pleaded,  142. 

to  vary  recital  of  consideration,  221. 
(1.)   Concerning  evidence,  268. 

burden  of  proof,  268,  271. 

how  changed,  271. 

answer  as,  160. 

personal  transactions  with  decedent,  121, 

omnia  prcesiwiunter  contra  spoliatoreni,  281. 
(2.)  Proof  a?id  conclusiveness  of  judgment,  270. 

judgment  essential  to  creditor's  proceeding,  l^-TT,  270. 

evidence  until  impeached,  270. 

attacking  for  collusion,  270,  74  n. 
(3.)  Ifisolvency  of  debtor,  273. 

application  of  the  term,  273. 

who  considered  solvent,  273. 

evidence  of  insolvency,  87,  87  ;;,  273. 

illustrations,  273. 

general  repute  as  to,  273. 

opinion  as  to,  273,  273  71. 
(4.)  Insolvency  of  vendee,  274. 

effect  of  proof  of,  274. 

shown  by  general  repute,  274. 
(5).    General  reputation,  275. 

evidence  of,  admitted,  275. 

tendency  and  effect  of  proof  of,  275. 
(6.)   Concerning  res  gestcc,  276. 

declarations  admissible,  276. 

duty  of  jury  to  weigh,  276. 

importance  of  the  doctrine,  276. 
(7.)  Declarations,  rule  as  to,  277.  278. 

before  sale,  admissible,  277. 

theory  governing  their  admission,  277. 


References  ^        INDEX.         [are  io  sections.  74-^ 

EVIDENCE — Dec/arafions,  ride  as  to — continued. 

concerning  personalty,  excluded,  277, 

declarations  after  sale,  277. 

excluded  as  mere  hearsay,  278. 

illustrations,  278. 
(8.)  Possession  after  conveyance,  279. 

effect  of  proof  of,  2  79. 

declarations  characterizing,  279. 

constitute  part  ol  res  gestee,  279. 
(9.)  Declarations  of  co-conspirators,  280. 

in  execution  of  common  purpose,  280. 

proposed  acts  must  be  sui  juris  with  those  committed,  280. 

foundation  for,  280. 

prima  facie  case  must  be  shown,  280. 

admissions  of  declarations,  280. 

as  to  past  transactions,  incompetent,  280. 

not  admissible  to  prove  the  conspiracy,  280, 

received  to  show  its  scope,  280. 
(10.)  Proof  of  circumstances,  281. 

great  latitude  permitted,  281. 

objections  for  irrelevancy,  not  favored.  281, 

wide  range  of  inquiry,  281. 

must  be  strong  and  cogent,  281. 

the  test  given,  281. 

latitude  of  the  inquiry,  281  n- 

collateral  facts,  proof  of,  281. 
(11.)   Other  frauds,  282. 

proof  of  commission  of,  282. 

intent  the  object  of  inquiry,  282. 

other  similar  acts  show  it,  282. 

independent  acts  and  declarations,  282. 

scope  of  the  inquiry,  282. 

exception  to  the  rule,  282. 
(12.)   Suspicions  insufficient,  3,  5,  6,  283. 

tangible  facts  must  be  shown,  283. 

of  fraud,  not  notice  of  it,  283. 
(13.)  Generally,  284,  285. 

proving  value  by  experts,  284, 

testimony  must  conform  to  pleading,  285. 
EVIDENCE  OF  FRAUD,  generally  circumstantial,  13. 

proof  of  circumstances  as,  281. 

great  latitude  allowed,  281. 


n  A1  Re/erences\         INDEX.         \  are  to  sections. 

EVIDExMCE  OF  FRAUD— ^^////««^^/. 

direct  proof  not  attainable,  13. 

the  test,  281. 

proof  of  collateral  facts,  281. 

other  frauds,  282. 

declarations,  280. 
EVIDENCE,   OF  INTENTION,  when  cannot  change  presumption,  9, 
322,  382. 

when  not  necessary  to  establish  frauds,  8-10,  382. 

of  solvency,  95. 

not  to  be  pleaded,  142. 

answer  as,  160. 

of  secrecy,  234. 

of  wife,  313. 

See  Intention. 
EXCEPTIONS  to  rule  concerning  injunction  against  debtor,  53 

receivership,  when  allowed  before  judgment,  53. 
EXCLUSIVE  jurisdiction  in  equity,  56. 

property  not  subject  to  legal  process,  56. 

as  to  choses  in  action,  22,  t^t,^  56. 

supplementary  proceedings  not,  61. 

suits  by  personal  representatives  not,  112, 
EXCUSING  want  of  change  of  possession,  263. 

rebutting  presumptions  of  fraud,  263. 

laches,  148. 
EX  DOLO  MALO  NON  ORITUR  ACTIO,  429. 
EXECUTION,  contingent  remainder  not  liable  to,  29  n. 

seat  in  stock  exchange  not  liable  to,  35  n. 

property  purchased  in  name  of  third  party,  57. 

remedy  by,  59. 

to  county  of  debtor's  residence,  68. 

must  precede  creditor's  bill,  68. 

return  of  unsatisfied,  74,  68. 

return  of  officer  conclusive,  74. 

conflict  in  new  York,  86. 

distinction  between  realty  and  personalty  as  to,  87. 

raising  the  objection,  88. 

what  bill  should  allege  as  to,  88, 

where  jurisdiction  is  concurrent,  51. 

selling  land  under,  72. 

in  State  where  land  lies,  83, 

what  bill  should  show  as  to,  88. 


Jieyerefices  I         INDEX.  rare  io  seciioKS.  74-^ 

EXECUTORS  AND  ADMINISTRATORS,  as  complainants,  112,  113. 

as  defendants,  136. 

as  fraudulent  grantees,  77. 

conveyance  binding  upon,  112,  113,  398. 

may  sue  for  cancelled  debt,  42. 

cannot  avoid  voidable  sale,  511. 

affirmance  of  voidable  acts  of,  484. 

judgment  against,  77. 
EXEMPTING  assignee  from  liability,  334. 

renders  assignment  void,  334. 

theory  of  the  law,  334. 
EXEMPTIONS,  rule  as  to,  46-50,  50a. 

policy  of  the  law,  365. 

reservation  of,  in  assignments,  326. 

does  not  render  assignment  void,  326. 

do  not  pass  by  assignment,  316a. 

receiver  gets  no  title  to,  46. 

endure  for  life-time,  46, 

aversion  to  exemptions  not  statutory,  360. 

fraudulent  purchase  of,  47. 

covinous  alienations  of,  48. 

conflicting  cases,  49. 

forfeited  by  fraud,  49. 

what  cannot  be  reached,  50a. 
EXHAUSTING  LEGAL  REMEDY,  73,  86. 

object  of,  73. 

establishes  claim,  73. 

saves  debtor  from  interference,  52,  73. 
EXISTING  CREDITORS,  89-95. 

(i.)   Classes  of  creditors,  existmg  and  subsequent,  8^. 

who  are  existing  creditors,  89. 

subsequent  creditors,  89,  96,  97. 

their  respective  rights,  89,  96. 

decree  when  not  binding,  on,  168. 
(2.)    Cofitingetit  creditors,  90. 

wife  and  surety  as  creditors,  90. 

indorser  and  warrantor,  90. 

municipal  corporation,  90. 

date  of  agreement  governs,  90. 

tort  claimant,  90. 

who  are  not  creditors,  91. 

transfer  of  right  to  sue,  92. 


'lAA  Re/erences\  '      INDEX.  are  to  sections. 

EXISTING  Q^YA^YYOK^— continued. 
(3.)  Voluntary  alienations  as  to,  93,  94. 

presumptively  fraudulent,  94. 

early  conflict  as  to,  93. 

recent  cases,  94. 
EXPENSES,  when  chargeable  to  common  fund,  109. 
EXPERTS,  proving  value  by,  284. 

illustrations,  284. 
EXPLAINING  delay,  discovery  of  fraud,  149. 

judgment,  270. 

recitals  of  consideration,  221. 

contradicting  allegations  of  deed,  221. 

substituting  valuable  for  good  consideration,  221. 
EXTENDING  UNUSUAL  CREDIT,  as  evidence  of  fraud,  241. 

FACTS  sufficient  to  excite  inquiry,  379,  380,  381. 

as  notice  of  fraud,  379-381. 

may  be  implied,  142. 

means  of  knowledge,  381. 

the  test,  380,  381. 

admitted  in  pleading,  285. 

equity  deals  with,  60. 
FAIR  PREPONDERANCE,  fraud  must  be  shown  by,  271. 
FALSE  REPRESENTATIONS,  to  avoid  sale,  447^. 
FAMILY,  services  by  members  of,  218. 

by  daughter  to  debtor,  218. 

no  promise  to  pay  implied,  218. 

wife  to  husband,  218. 

when  claim  of  cannot  be  collected,  218. 

insurance  for,  23. 
FATHER,  gift  by,  improvements,  296. 

to  son,  sale  by,  242. 
FEDERAL  COURTS,  rules  of  procedure  in,  61  n.,  71. 

supplementary  proceedings  in,  61  n.- 

not  allowed  in  State  court  on  federal  judgment,  61  n. 

rules  of  property  in,  71. 

State  decisions  followed,  71. 

as  to  fraudulent  and  voluntary  assignments,  71. 

pauper  litigants  in,  71. 

chancery  practice  prevails,  51,  71. 

suit  against  stockholder  in,  139. 

judgment  in,  78,  78  n. 


Re/ercnces\         INDEX.         \are  to  sections.  745 

FEDERAL  TRIBUNALS,  procedure  in,  71. 

heirs  and  devisees  as  parties,  136. 
FICTITIOUS  CONSIDERATION,  recital  of,  badge  of  fraud,  228. 

either  in  mortgage  or  conveyance,  228. 

to  be  considered  by  jury,  228. 

not  fraud /t'r  sc,  228. 

immaterial  mis-recital,  228. 

to  be  fraudulent  must  be  intentional,  228. 
FICTITIOUS,  grantee,  setting  aside  deed,  131. 

debt,  avoids  assignment,  345. 
FILING  chattel  mortgage,  347  n. 
FIRM,  judgment  creditor  of,  suit  by,  108. 

assets  of,  how  distributed,  216. 
FLEXIBLE  JURISDICTION  OF  EQUITY,  60,  193  ;/. 
FORECLOSURE,  proceedings  attacking  fraudulent  conveyance,  d^. 

in  surplus-money  proceedings,  63. 

receiver  in  foreclosure,  187  71. 
FOREIGN  JUDGMENT,  does  not  have   the  force  of  domestic  judg- 
ment, 78. 

government,  claims  against,  pass  to  assignee,  114. 

assignments,  346. 

statutes,  no  force  ex  propria  vigore,  405  n. 

receiver  as  complainant,  118. 
FOREIGN  RECEIVERS,  recognized  by  comity,  118. 
FORMS,  equity  looks  beyond,  60. 
FORMS  OF  RELIEF,  4,  51-72. 

See  Creditors'  Remedies, 

not  regarded  in  equity,  60. 

in  cases  of  fraud  on  wife,  70. 
FOUR  CLASSES  OF  DEFECTIVE  or  ineffectual  acts,  428. 
FRAUD,  divisions  of,  10. 

equitable,  51. 

rule  as  to  pleading,  141. 

fraud  in  law  and  fraud  in  fact,  10. 

no  definition  of,  13. 
FRAUD  INFERRED  FROM  TRUST,  an  inference  of  law,  10  //. 
FRAUD  IN  LAW  and  fraud  in  fact,  9,  10,  382. 

distinction  discussed,  9,  10,  382. 

different  intent  cannot  be  shown,  9. 

cases  explained,  9,  10. 
FRAUD,  MUST  BE  PROVED,  5,  283. 

one  of  recognized  heads  of  equity  jurisdiction,  60. 


746  Ke/erencc-s^         INDEX.  [are  io  seciions. 

FRAUD,  MUST  BE  VROVED—conhnued. 

is  intention  carried  out  by  hurtful  acts,  13,  196. 

as  a  legal  deduction,  10. 

to  annul  written  instrument,  6. 

possession  as  proof  of,  247. 

character  of,  6. 

perpetrated  in  secret,  6. 

may  be  unintentionally  committed,  8. 

pleading  fraud,  141. 

word  need  not  be  used,  141. 

cannot  be  defined,  13. 

nature  and  effect  of,  considered,  13. 

constructive,  323. 

suspicions  as  to,  insufficient,  5,  283. 

shown  from  circumstances,  281, 

the  test,  281. 

equilibrium  will  not  establish,  5. 

disconnected  acts  as  evidence,  280,  282. 

in  conveyances,  characteristics,  15. 

badges  of,  224-244. 

in  fact  and  in  law,  8,  9,  10,  322,  382. 

as  to  existing  creditors,  82-95. 

as  to  subsequent  creditors,  96-106. 

irregularities  and  carelessness,  5, 
FRAUDS,  statute  of,  agreement  out  of,  296. 
FRAUDULENT  CONTRACTS  and  devices,  447^. 
FRAUDULENT,  conveyance  of  equity  of  redemption,  31. 

purpose,  when  harmless,  107. 
FRAUDULENT  CONVEYANCES,  defined,  15. 

classes  of,  15. 

necessary  elements  of,  15. 

at  common  law,  16. 

statutes  declaratory,  16. 

early  statutes  avoiding,  18. 

property  that  may  be  reached,  23-50. 

grantee,  creditors  of,  387. 

liability  between,  388. 

grantees  sharing  in  recovery,  389. 

valid  between  the  parties,  395-400. 
FRAUDULENT  GENERAL  ASSIGNMENTS,  316-346. 
(i.)    Voluntary  assignments,  316. 

general  comments,  316.  , 


References'}         INDEX.  \are  to  sections.  7  A7 

FRAUDULENT  GENERAL  hS^.lG'i^M'El^iTS— voluntary— continued. 

property  not  in  custodia  legis,  316. 

assignee  not  officer  of  court,  316. 

must  obey  provisions  of  assignment,  316. 

control  of  court  over,  316. 

parties  cannot  change  character  of,  316. 

assignor  cannot  substitute  successor  to  assignee,  316. 
(2.)  Delay  and  Jnndrance,  318. 

meaning  of  delay,  318, 

of  hindrance,  318. 

instances,  318. 
(3.)  Intent  affecting  assigni?ient,  T,i(). 

actual  intent  not  exclusive  test,  319. 

of  assignor  generally  governs,  319. 

conflict  in  the  cases,  319. 
(4.)  Fraud  must  relate  to  instrument  itself^  320. 

subsequent  illegal  acts  immaterial,  320. 

independent  acts  not  considered,  320. 

effect  of  omission  from  schedules,  320. 
(5.)  Good  faith,  321. 

means  "  sincerity  or  honesty  of  purpose,"  321. 

presumption  of,  appertains  to  assignments,  321. 
(6.)  Void  on  its  face,  9,  10,  322. 

instances  given,  322. 

actual  motive  or  belief  immaterial,  322. 
(7.)   Contravening  statutes,  324. 

may  be  avoided,  324. 

an  illustration,  324. 
(8.)   Transfers  to  prevent  sacrifice,  325. 

will  be  set  aside,  325. 
(9.)   Reservations,  326. 

when  fatal  to  instrument,  272,  326. 

for  debtor's  benefit,  326. 

of  exempt  property  not  fraudulent,  326. 

reserving  surplus,  327. 

apparent  conflict  in  the  cases,  327. 

preferring  claims  in  which  assignor  is  partner,  329. 
(10.)  Releases  exacted  in  assignments,  328. 

looked  upon  with  disfavor,  328. 

render  assignments  fraudulent,  when,  328. 

different  cases  considered,  328. 
(11.)  Authorizing  trustee  to  continue  business,  330,  331. 

when  such  provisions  permissible,  331. 


7a8  Refercnces\        INDEX.         \are  to  sections. 

FRAUDULENT  GENERAL  ASSIGNMENTS— r^//////«/^^. 
(i2.)   Delay,  sales  upon  credit,  332,  333. 

creditors'  right  of  immediate  payment,  332. 

the  cases  reviewed,  332,  2tZZ- 
(13.)  Exempting  assignee  from  liability.,  334. 

renders  assignment  void,  334. 
(i4.)   Other  features,  335^  337- 

authority  to  compromise,  2>Z^- 

fraud  of  assignee,  337. 

providing  for  counsel  fees,  335. 

assets  exceeding  Uabilities,  340. 

assignments  to  prevent  preference,  341. 

threatening  to  make  assignment,  342. 
(15.)  Incompetency  of  assignee,  2>'h^- 

badge  of  fraud,  338. 

word  "  incompetency  "  construed,  338. 

selection  of  blind  assignee,  338. 
(16.)  Construction  of  assignment,  343. 

rules  applicable  to,  343. 

explaining  obnoxious  provisions,  344. 

assignments  held  void,  345. 
(i7-)  Foreign  assignments,  346. 

operate  as  matter  of  comity,  346. 
FRAUDULENT  GRANTEES,  valid  title  from,  386,  448  7U 

as  defendants,  131. 

proceedings  futile,  if  omitted,  131. 

intermediate  grantees,  131. 

as  trustees,  385. 

creditors  of,  387. 

liability  between,  388. 

sharing  in  recovery,  389. 
FRAUDULENT  INTENT,  fact  for  jury,  9,  204. 

allegations  concerning,  145. 

when  res  adjudicata,  203. 

where  consideration  is  adequate,  201. 

proving  intent,  206. 

of  agent  binding  on  principal,  198. 

actual,  not  decisive,  197,  382. 

mutuality,  199,  302,  319. 
See  Intention. 
FRAUDULENT  PURCHASES  OF  EXEMPTIONS,  47. 

legality  of,  47. 

conflicting  cases  as  to,  49,  50. 


J?e/erences\         INDEX.  \  are  io  secii'ans.  74-Q 

FRAUDULENT  TRANSFERS,  prevalence  of,  2. 

cause  of,  2. 

of  choses  in  action,  17,  ;^;^. 

of  exemptions,  47. 

early  statutes  avoiding,  18. 

characteristics  and  classes  of,  15. 
FRAUDULENT  vendee,  liability  of,  176,  178,  195. 
FUND  may  be  traced  by  creditors,  44. 

followed,  in  new  investment,  44. 

the  rule  illustrated,  44. 
FUTURE  ADVANCES,  rule  as  to,  217. 

judgment  or  mortgage  for,  217. 

should  be  shown  on  face  of  lien,  217. 
GENERAL  ALLEGATIONS  of  fraud  of  no  value,  141. 
GENERAL   ASSIGNMENT,   316-346.      See    Fraudulent   General 
Assignment. 

will  supplant  suit,  when,  2^. 

character  of,  316. 

property  transferred  by,  316^;. 

surviving  partner  may  make,  329. 

when  void,  345. 

by  corporation,  346a. 

specific  assignment  is  not,  339. 

threatening  to  make,  342,  342  n. 

construction  of,  343. 

assignee  under,  as  complainant,  115. 
GENERAL  DENIAL,  evidence  under,  158. 
GENERAL  REPUTATION,  evidence  of,  allowed,  275. 

as  to  absence  of  means  in  vendee,  274. 

as  to  want  of  credit,  275. 

is  competent,  275. 
GENERAL  RULES,  as  to  restitution,  510^. 
GENERALITY  of  gift  or  conveyance,  22,  231. 

evidence  or  badge  of  fraud,  231. 

commented  on  in  Twyne's  case,  22. 

views  of  Lowell,  J.,  231. 

creating  violent  presumption  of  fraud,  231. 

considered  unusual  and  extraordinary,  231. 

various  comments,  231. 
GENEROSITY,  when  not  evidence  of  fraud,  5. 
GIFT,  condition  repugnant  to,  void,  362. 

oral,  title  by,  296. 


yCQ  ReferencePi         INDEX.  ^re  to  sections. 

G I  FT — continued. 

of  small  value  not  fraudulent,  41. 

from  husband  to  wife,  309, 

as  badge  of  fraud,  309. 

generality  of,  as  evidence  of  fraud,  22,  231. 
GOOD  and  valuable  consideration,  210. 

defined  by  Story,  210  n. 

See  Bona  Fide  Purchaser. 
GOOD  CHARACTER,  evidence  of,  275. 
GOOD  FAITH,  settled  presumption  of  law,  6. 

and  consideration,  207. 

defined,  321. 

relating  to  fraudulent  assignments,  321, 

protecting  purchasers,  369,  372. 
GRANT,  conditions  repugnant  to  void,  362,  363,  367. 

of  entire  estate,  evidence  of  fraud,  231. 
GRANTEE,  fraudulent,  as  trustee,  385. 

creditors  of,  387. 

when  they  may  seize  the  property,  387. 

doctrine  of  apparent  ownership,  387. 

liability  between,  388. 

sharing  in  recovery,  389. 

enforcing  fraudulent  deed,  402, 
GRANTING  AMENDMENTS,  discretionary,  156. 
GRANTOR'S  BENEFIT,  transfer  invalid,  211. 

secret  trust  for,  272. 

conveyances  fraudulent,  272. 
GRANTORS,  defrauded  of  property,  399,  400. 

aid  extended  to,  399,  400, 

degrees  of  guilt,  399. 
GRATUITY,  cannot  be  transformed  into  a  debt,  209. 
GRAY,  PROFESSOR,  views  as  to  spendthrift  trusts,  364  «.,  366. 
GROSSLY  inadequate  consideration,  207,  232. 

will  overturn  transfer,  6,  232. 
GROWING  CROPS,  change  of  possession  of,  266. 

impossible  to  deliver,  266. 

conflicting  views,  266. 

available  to  creditors,  27. 

when  subject  to  execution,  27. 
GUILTY  KNOWLEDGE,  431. 

renders  contract  illegal,  431. 

of  debtor's  fraud,  380. 


Re/ercnces}         INDEX.  [are  to  scciions.  7^1 

HEARSAY,  declarations  after  sale  excluded  as,  278. 
HEIRS,  as  complainants,  121. 

when  not  proper  parties,  121. 

cannot  impeach  ancestor's  deed,  121,  398. 

statutes  construed  as  to,  121. 

testimony  by,  121. 

reaching  money  due  to,  ^;^. 

suit  by  one  of  several,  121. 
HINDER,  delay  or  defraud,  words  construed,  11,  11  n. 

not  synonymous,  11. 

intent  to  do  either,  sufficient,  11. 

object  of  the  statute,  ir. 

legal  hindrance,  1 1,  390. 

sales  upon  credit,  240,  332,  ss3,  3.S6. 

delay  refers  to  time,  318. 

hindrance  relates  to  obstacles,  318. 
HINDRANCE  AND  DELAY,  instances  of,  ti. 

no  distinction  between,  1 1  n. 

meaning  of  terms,  318. 

sales  upon  credit,  240,  332,  ^^^,  356. 
HOMESTEAD,  abandoned,  50. 

liable  to  creditors,  50. 

protected  by  cross-bill,  166. 
HONESTY,  presumption  of,  prevails,  6. 

the  law  loves,  20. 

good  motives  to  be  imputed,  6. 

api)earance  of,  preserved  by  debtor,  224. 
HOSTILE  claimants  cannot  join,  108. 

demurrer  for  joinder  of,  108. 

the  test,  108. 
HUSBAND  AND  WIFE,  122,  298-315. 

prominence  of  the  subject,  122. 

when  husband  not  proper  party,  132  //. 

articles  of  separation,  310. 

husband  as  creditor  of  wife,  122. 

wife  as  complainant,  122,  314. 

separate  property  of  wife,  304. 
(i.)    T/ie  marriage  rclalioiiship,  298. 

confidence  reposed  in,  298. 

frauds  in  the  relationship,  298. 
(2.)  Wife  as' husband'' s  crcJifor,  299, 

husband  may  pay  her  honest  debt,  299. 


7C2  /ie/erencs  \         INDEX.         \  are  io  secii'ons. 

HUSPjAND  and  wife — 7cii/e  as  husband's  creditor — continued. 

not  bound  to  plead  defenses,  299. 

common  law  rule  abrogated,  299. 
(3.)   Transactions  between,  how  regarded,  300. 

closely  scanned,  300. 

facilities  for  fraud,  300. 

onus  in  transactions  between,  300. 

improvements  by  husband  on  wife's  land,  26. 
(4.)  Burden  of  proof ,  301. 

burden  rests  upon  wife,  301. 

must  show  value,  301. 

presumptions  in  favor  of  creditors,  301. 

presumption  of  ownership  by  wife,  301. 
(5.)  Mutuality  of  fraudulent  design,  199,  200,  302. 

to  render  settlement  fraudulent,  302. 

fraud,  how  proved,  302. 
(6.)  Husband  as  luifes  agent,  303. 

husband  may  act  as,  303, 

injustice  of  denying  such  right,  303. 
(7.)  Mingling  property  of  husband  and  wife,  305. 

wite  may  lose  title  thereby,  305. 

not  where  agreement  to  pay  exists,  305. 
(8.)  Marriage  settlements,  306,  307. 

amount  of  settlement,  306. 

when  avoided,  306. 

post-nuptial  settlements,  307. 

purchase  after  marriage,  30S. 

gift  from  husband  to  wife,  309. 
(9.)  Fraudulent  conveyances  in  contemplation  of  marriage,  314. 

illustrations  of  the  enforcenient  of  the  rule,  314. 

applies  to  both  husband  and  wife,  314. 

fraudulent  transfers  affecting  dower,  315. 
ILLEGAL  ACTS  discussed,  429,  432. 

afford  no  cause  of  action,  429. 

policy  of  the  law,  430. 
ILLEGAL  consideration  is  no  consideration,  214. 

acts,  432. 

instances  of  illegal  acts  given,  432. 

consummated  acts  not  disturbed,  439. 
ILLICIT  INTERCOURSE,  illegal  consideration,  213,  432. 
ILLUSTRATIONS  of  void  acts,  416. 
IMPOUNDING  proceeds  of  fraudulent  sale,  175. 


l\c/erences\         INDEX.  \  are  to  sections.  7S^ 

IMPRISONMENT  of  debtor,  effect  of,  66. 

constitutes  satisfaction  of  claim  during  its  continuanc.\  66. 
IMPROVEMENTS,  recovering,  26,  192  «.,  193  //. 

on  another's  land,  26. 

the  law  follows  them,  26. 

temporary  or  perishable,  26. 

by  husband  on  wife's  land,  26. 

to  support  gift,  296. 
INADEQUACY  of  purchase  price,  232. 

as  evidence  of  fraud,  6,  232. 

x\o\.  per  se  fraudulent,  232. 

illustrations,  232. 

does  wo\. per  se  prove  fraud,  232. 

unless  extremely  gross,  6,  232. 

the  test,  232. 

is  fact  calling  for  explanation,  232. 
INCEPTION  OF  TRANSACTION,  fraud  must  be  in,  227. 
INCHOATE  INTEREST  may  be  reached,  30. 

curtesy  and  dower,  30. 

unassigned  dower,  61. 
INCOME,  surplus  may  be  reached,  45,  360. 

the  rule  applied,  45,  360. 

exempt  earnings  for  sixty  days,  61  «. 
INCOMPETENCY  of  assignee,  338. 

badge  of  fraud,  338. 

ground  of  removal,  337. 
INCORPOREAL  RIGHT,  membership  of  stock  exchange  is,  35. 
INCUMBRANCES,  purchaser  removing,  126. 
INDEFINITE  TRUST,  fraudulent,  11^ 
INDIANA,  creditor's  bill  against  absconding  debtor,  84. 

excej)tional  practice  in,  as  to  joinder  of  claims,  8c;. 

its  features  considered,  85. 
INDICIA  OF  FRAUD,  224-244.     See  Badges  of  Fraud. 

are  circumstances  or  elements  of  fraud,  224. 

defined,  225,  225  «. 
INDICTMENT,  alleging  fraudulent  conveyance,  when  sufficient,  65  //. 
INDIVIDUAL  and  copartnership  debts,  216. 

consideration  as  affecting,  216. 
INDORSER  as  creditor,  90. 

liable  on  void  paper,  446^-. 
INDUSTRY  AND  TALENTS,  cannot  be  reached,  50./. 
INFANT,  fraudulent  intent  ap[)lied  to,  199  //. 
48 


yKA  Re/erences'^         INDEX.  ^are  io  sections. 

INFANTS'  ACTS  AND  CONTRACTS,  448,  449-59- 

usually  voidable,  411. 

are  under  the  protection  of  the  law,  411. 

acts  of  infants  and  of  lunatics  compared,  449. 

test  of  infants'  acts,  450. 

classes  of  infants'  acts,  451. 

judgments  against  infants,  453. 

infant's  power  of  attorney,  454. 

void  acts  of,  455. 

voluntary  assignments  by,  456. 

liability  for  torts,  457. 

acts  binding  upon,  459. 

restitution  by,  510^. 

no  participation  by,  in  fraudulent  intent,  199  n. 
INFERENCE,  of  fraud  from  circumstances,  7. 
INJUNCTION  against  debtor  before  judgment,  not  allowed,  52,  185. 

theory  of  the  rule,  52. 

exceptions  to  the  rule,  53,  185. 

vexation  and  hardship  incident  to  any  other  rule,  52. 

creditor  must  have  certain  claim,  52. 

against  debtor,  185,  186. 

when  allowed,  185. 

when  disallowed,  186. 
INNOCENCE,  presumed  in  actions  for  deceit,  5. 

of  assignee,  does  not  save  assignment,  319. 
INQUIRY,  facts  sufficient  to  excite,  379,  380. 

constitute  notice  of  fraud,  380. 

scope  of,  3. 
INSOLVENCY,  evidence  of,  239. 

importance  of  proof  of,  239. 

as  proof  of  fraud,  239. 

considered  a  circumstance,  239. 

meaning  of  the  term,  273. 

opinions  as  to,  273. 

of  vendee,  274. 

proof  of,  271. 

continuing  business  after,  143  n. 

of  debtor,  evidence  of,  273. 

discharges  as  defense,  294. 

rule  as  to,  294. 

alleging  in  pleading,  143. 

defined,  143. 


Ke_/erences  \         INDEX.  \  are  ia  sections.  7  S  "i 

INSOLVENT  CORPORATION,  capital  stock  of,  117,  68  «. 

See  Corporation. 
INSUFFICIENT  CONSIDERATION,  223. 

illustrations,  223,  232. 

judgments,  77. 

statement  of  confession,  174. 
INSURANCE,  when  not  assignable,  23. 

policies,  rights  of  creditors,  312. 

by  married  man,  23. 

when  not  in  fraud  of  creditors,  23  ;/. 
IN  PERSONAM,  judgment  to  sustain  supplementary  proceedings,  61. 

to  uphold  creditor's  suit,  77. 
INTANGIBLE  interests  may  be  reached,  17,  27. 

choses  in  action  recoverable,  17,  24,  33. 

stocks,  patent  rights,  legacies,  24,  37,  ^S. 
INTEGRITY,  paramount  to  generosity,  16. 
INTENT,  is  an  emotion,  8. 

essential  element,  196. 

inferred  from  circumstances,  8. 

fraudulent,  145. 

as  a  conclusion  of  law,  9,  10,  197,  322. 

cases  considered,  10. 

evil,  not  evidenced  by  gifts  of  small  value,  41. 

not  conclusive,  197,  382. 
INTENTION,  may  oppose  legal  conclusion,  8,  382. 

when  cannot  change  presumption,  9. 

reached  by  construction  of  instrument,  10,  322. 

as  affecting  subsequent  creditors,  98,  202. 

generally,  8,  9,  10,  41,  196-206. 
(i.)  Defined  or  outlined,  196. 

is  an  emotion  or  operation  of  the  mind,  196. 

shown  by  acts  or  declarations,  196. 

fraud  as  affected  by,  8,  9,  10,  196. 

debtor's  statements  not  conclusive,  196. 

insolvent's  standard  of  morality  not  the  test,  196. 

hinder,  delay  or  defraud,  sufficient,  11,  196. 

when  question  of  res  adjiidicata,  203. 

question  for  the  jury,  204. 

testifying  to,  205. 

proving  it,  206. 
(2.)  Actual  intent  not  decisive,  197. 

fraudulent  purpose  may  be  implied,  8,  9,  10,  197. 

debtor's  belief  immaterial,  8,  9,  10,  196,  197,  322,  382. 


7C(5  References^         INDEX.  yare  to  tections. 

INTYMTlO'ti— continued. 

(3.)  F/-aud  of  agent  binding  on  principal,  198, 

intent  established  by  implication  or  substitution,  198. 
(4.)   Mutuality  of  participation  in  fraudulent  intent,  199,  207. 

the  general  rule,  199. 

vendor's  intent  insufficient,  199. 

fraudulent  intent  as  applied  to  infant,  199  n. 
(5.)  As  affecting  voluntary  alienations,  200,  319. 

the  cases  reviewed,  200  //. 

differs  from  cases  where  consideration  is  present,  200. 

not  essential  to  show  mutual  evil  intent,  200. 

relating  to  general  assignments,  319. 
(6.)    Where  consideration  is  adequate,  201. 

the  rule  considered,  201. 
(7.)    To  defraud  subsequent  creditors,  96,  97,  98,  100,  202. 

applications  of  the  rule,  96,  97.  98,  too,  202. 

creditor  must  show,  98, 
(8.)  Intention  not  to  pay,  447b- 

fraud  arising  from,  44Jb. 
INTENTIONAL  OMISSION  of  assets,  avoids  assignment,  345. 
INTERESTS  that  may  be  reached,  23-50. 

tangible  interests,  24. 

intangible  rights,  17,  24,  ss,  37,  38. 

rule  in  England,  25. 

profits  and  improvements,  26. 

crops,  27. 

choses  in  action,  2;^. 

powers,  39,  40. 

trust  income,  45,  360. 
INTRODUCTORY  observations,  1-22. 
INVOLUxNTARY  PAYMENTS,  480. 

may  be  recovered  back,  478,  480. 
IRREGULARITIES,  and  nullities  distinguished,  442. 

not  proof  of  fraud,  5. 
IRRESISTIBLE,  evidence  to  establish  fraud  need  not  be,  7. 
ISSUE  OF  FACT,  referred  to  jury  in  equity,  51. 
See  Jury. 

JOINDER  OF  CLAIMS,  54,  108. 
rule  in  Ohio,  54. 

uniting  causes  of  action,  55,  108, 
several  grantees  may  be  joined,  54. 


Jie/erences\        INDEX.         [<i>e  io  scciions.  7S7 

JOIiNDER  OF  CLAIMS— continued. 

although  separate  defenses  exist,  54. 

ejectment  and  equitable  relief  in  one  bill,  54. 

conflict  in  the  cases,  54. 

exceptional  practice  in  Indiana  and  North  Carolina,  85. 

for  judgment  on  coupons  and  mandamus,  85  n. 
JOINDER  OF  COMPLAINANTS,   108. 

creditors  by  distinct  judgments,  108. 

various  illustrations,  108. 

by  judgment  and  decree,  108. 

general  theory,  108. 

of  hostile  claimants,  108. 
JOINING  DEFENDANTS,  the  rule,  128,  132,  150,  151,  152. 

the  theory,  132. 

objections'to  non-joinder,  134, 

debtors,  128,  129. 

stockholders,  128. 
JUDGMENT  CREDITORS,    may  follow  corporate  assets,  119. 

may  attack  fraudulent  conveyance,  73-88. 
JUDGMENT  OR  DECREE,  rules  as  to,  168-183. 

status  of  attacking  creditors,  73-88. 

when  judgment  unnecessary,  83. 

receiver  before,  184. 
(i.)  Judgment  conclusive,  168,  169. 

attributes  of  the  judgment,  168. 

operates  as  an  estoppel,  168. 

conclusive,  though  form  of  action  be  changed,  169. 

judgment  transferring  title,  172. 

when  not  conclusive,  168. 
(2.)  Judgment  appointing  receiver,  170. 

the  practice  explained,  1 70. 

effect  of,  1 70. 
(3.)  Judg7nent  avoids  sale  only  as  to  creditor,  171,  395-402. 

the  principle,  171,  395. 

effect  of  action  of  chancery,  171, 
(4.)  Impounding  proceeds  of  fraudulent  sale,  175. 

accounting  by  fraudulent  vendee  to  debtor,  176. 
(5.)  Relief  at  laiv  and  in  equity,  i  76  //. 

equity  more  flexible,  176  ;/. 
(6.)  Personal  judgment  against  fraudulent  vendee,  i77,  178- 

the  subject  discussed,  177. 

rule  in  various  States,  177,  178,  178  ;/. 


yc^  Re/erences\         INDEX.         \  are  to  sections. 

JUDGMENT    OR   DECREE— /^r^<?««/  Jiedg?nent  against  fraudulent 
vendee — continued. . 

money  judgment,  when  disallowed,  179. 

personal  judgment  against  wife,  180. 
(7.)   Must  conform  to  relief  sought,  181,  182. 

illustrations,  181,  182. 

form  in  Louisiana,  171, 
(8.)   Generally. 

no  judgment  in  favor  of  unrepresented  parties,  173. 

confession  of  judgment,  1 74. 

contradictory  verdicts,  183. 

against  infants,  453. 

status  of  attacking  creditors,  73-88. 
JUDGMENT  FOR  DAMAGES,  improper  in  equity,  51. 

must  be  for  accounting  by  fraudulent  vendee,  51. 

fraudulent  confessions  of,  attacked  in  one  suit,  54. 

creditor  must  have,  before  filing  bill,  71-88. 

conclusive  as  to  indebtedness,  74,  270. 

proof  of,  270. 

attacking  for  collusion,  74  n. 

sufficient  to  sustain  a  bill,  76,  80. 

insufficient  for  that  purpose,  77. 

foreign,  effect  of,  78. 

object  of,  73. 

establishes  debt,  73. 

exhausts  legal  remedy,  73. 

lien  by  statute,  87. 
JUDICIAL  SALE,  change  of  possession  on,  265. 

not  necessary  in  Pennsylvania,  265. 

considered  essential  in  New  York,  265. 
JURISDICTION  IN  EQUITY,  when  exclusive,  56. 

when  property  not  subject  to  execution,  36. 

limited  in  Massachusetts  to  property  not  subject  to  execution  or 
attachment,  59  n. 

and  the  exercise  of  jurisdiction,  422. 

absence  as  distinguished  from  excess  of,  421. 

distinctions  in,  considered,  423. 

united  jurisdictions,  effect  of,  51. 
JURISDICTIONAL  QUESTIONS,  405-407. 

beyond  State  boundaries,  405. 

outside  county,  406. 

appeal  to  Supreme  Court,  407. 


Jie/erencesj         INDEX.         Yare  io  sec/ions.  7  S9 

JURY,  issues  of  fact  referred  to  in  equity,  51. 
to  weigh  declarations,  276. 
consider  badges  of  fraud,  228. 
intent,  questions  for,  9,  204. 
court  cannot  interfere,  204. 
rule  in  New  York  as  to,  204. 
effect  of  badges  of  fraud  submitted  to,  226. 
continued  possession  as  evidence  of  fraud,  question  for,  254. 
error  by,  how  corrected,  254. 
•  JUSTIFICATION  under  irregular  and  erroneous  process,  443. 

KENTUCKY,  rule  as  to  absconding  debtors,  84. 
KNOWLEDGE  of  facts  sufficient  to  excite  inquiry,  379,  380,  381. 
See  Notice. 

essential  to  ratification,  483. 

of  facts,  as  notice  of  fraud,  379-381. 

buying  with  guilty  knowledge,  380. 

LACHES,  excusing  apparent,  148. 

not  imputed  by  iron  rule,  287. 

circumstances  govern  each  case,  287. 

pleading  as  to,  148,  149. 

as  a  defense,  287. 

stale  demands  discouraged,  287. 

lapse  of  time,  288,  289. 

effect  of,  287-289. 

affirmance  effected  by,  495. 
LAND,  change  of  possession  of,  264. 

as  distinguished  from  personalty,  264,  264  ;/. 

possession  evidence  of  ownership,  264. 

purchased  in  name  of  third  party,  57. 
LAPSE  OF  TIME,  as  a  defense,  288,  289. 

rests  not  alone  on  laches,  288. 

peace  of  society,  28^. 

loss  of  witnesses,  288,  289. 
LATITUDE  ALLOWED,  in  proving  circumstances,  281. 

in  cross-examination,  281. 
LAW,  purchase  either  valid  or  void  at,  51. 

no  reimbursement  at  law,  193. 

remedy  at,  59. 

creditor  may  proceed  by  execution  at,  59. 

attempted  transfer  treated  as  nullity,  59. 

and  equity,  distinction  observed  between,  51. 


^5  3  JR<-/erences\         INDEX,  ^are  to  sections. 

I>AWRF.\CE  V.  FOX,  rule  in,  applied,  43. 

LEGACIES,  recovered  by  creditors,  24. 

LEGAL  AND  EQUITABLE  JURISDICTION,  4,  51,  59,  60. 

changes  in  modern  procedure,  51. 

who  responsible  for  decision  in  equity,  51. 

judgment  for  damages  not  allowed  in  equity,  51. 

reimbursement  in  equity,  192. 

equity  more  flexible  than  law,  60. 
LEGAL  FRAUD,  meaning  of,  51. 
LEGAL  PRESUMPTIONS,  7. 

Judge  Black's  views,  7. 
LEGATEE  cannot  avoid  testator's  transfer,  121  «. 
LEGISLATION  or  acts  in  aid  of  rebellion,  424. 

tendency  of,  to  protect  honest  debtors  from  punishment,  i  n. 

to  enlarge  remedies  against  property,  3. 

retrospective,  affecting  remedies,  417. 

conferring  jurisdiction  on  pending  suits,  417. 
LEVY,  when  excused,  83. 

cannot  be  made  against  receiver,  83. 
LEX  FORI,  governs  remedy,  64. 

cases  and  illustrations,  64. 

governs  right  to  arrest,  64,  191. 

matters  of  procedure,  regulated  by,  64. 
LEX    NEMINEM    COGIT    AD    VANA    SEU    INUTILIA    PERA- 
GENDA,   73. 

struggle  for  application  of  maxim,  73, 
LIBEL,  claimant  for  damages  from,  is  creditor,  90. 
LIEN,  in  supplementary  proceedings,  61. 

See  Status  of  Attacking  Creditors. 

creditors  must  have,  to  file  bill,  73,  75-88. 

created  by  creditor's  bill,  68,  75,  392. 

by  attachment,  not  sufficient  to  support  bill,  81. 

creditors  having  rights  of,  125.       , 

parties  having,  as  defendants,  138. 

judgment  sufficient,  76,  80. 

judgment  insufficient,  77,  78,  81. 

when  unnecessary,  83. 

upon  rents  and  profits,  26. 

judgment  by  statute,  87. 
LIFE  INSURANCE,  policies,  may  be  reached,  24. 
when  non-assignable,  23. 
by  married  man,  23. 


J!e/frefiees  \         INDEX.  \  are  U  sections.  7^1 


LiMITA  riONS  upon  ownership  not  favored,  360-368. 

inconsistent,  are  void,  362. 

statute  of,  292. 

in  equity,  293. 

effects  of  discovery  of  fraud,  290,  291. 

must  be  pleaded  or  raised,  202. 

acknowledgment  of  debt,  215. 

judgment  barred  by,  77. 
LIS  PENDENS,  rule  as  to,  157. 

to  create,  must  describe  property,  157. 

doctrine  as  to  very  ancient,  157. 

not  applicable  to  bonds,  157. 

or  to  negotiable  securities,  157. 
LITIGATION  engendered  by  fraudulent  transfers,  2. 

not  creditable,  407. 
LOBBYING  SERVICES,  contract  void,  432. 
LOCAL,  penal  statutes  are,  139. 

territorial  jurisdiction,  i57rtr. 
LOGS,  delivery  of,  262. 

symbolical  delivery  sufficient,  262. 

illustrations,  262. 
LOUISIANA,  doctrine  as  to  collateral  attacks,  69. 

its  features  discussed,  69. 

derived  from  civil  law,  69. 

not  generally  acknowledged,  69. 

objections  to  rule,  69. 

form  of  judgment,  171. 
LOVE  AND  AFFECTION  as  consideration,  210. 

good  between  brother  and  sister,  216, 

not  good  against  existing  creditors,  210. 

explaining  recitals  in  deed  as  to,  221.J 
LUNATICS,  restitution  to,  510^!. 
LUNATICS  AND  INFANTS,  acts  of,  compared,  449. 

contract  for  necessaries,  463. 

acts  after  inquisition  void,  464. 

judgment  against,  465. 

void  and  voidable  acts  of,  466. 

deed  of,  467. 

executory  contracts  of,  468. 

rule  as  to  responsibility  of,  411  //. 

sale  of  real  estate  of,  469. 
LUNATIC'S  DEED,  jurisdiction  to  attack,  423. 


^02  /\c/erences\         INDEX.  \  are  io  sfciwtts. 

MALICIOUS  PROSECUTION,  claims  for,  cannot  be  reached,  34. 

do  not  pass  by  assignment,  34. 
MARRIAGE  as  consideration,  212. 

the  rule  in  the  cases,  212. 

relationship,  298. 

settlement,  rule  as  to,  306.     ] 

post-nuptial  settlement,  307, 

fraudulent  conveyances  in  contemplation  &f,  314. 

settlement,  description  in,  157  ;/. 

void  and  voidable,  441. 

statute  of  frauds,  311. 
MARRIED  MAN,  may  devote  earnings  to  life  insurance,  23. 

See  Agent. 
MARRIED  WOMEN,  rights  of,  298. 

See  Husband  and  Wife. 
MARSHALL,  Chief-Justice,  views  of,  as  to  moral  turpitude,  8. 
MARSHALLING  assets,  216. 
MASSACHUSETTS,  rule  as  to  spendthrift  trusts,  367. 

rule  as  to  crops  on  lands  fraudulently  conveyed,  27. 

jurisdiction  of  equity  in,  49  ;i. 

choses  in  action  reached,  64. 

remedies  allowed,  65. 

no  reconveyance,  397. 

promises  of  third  parties,  43. 
MEMBER,  suing  in  place  of  receiver,  73. 
MEMBERSHIP  of  stock  exchange  is  assets,  35. 

not  liable  to  execution,  35  n. 
MENTAL  OPERATION  and  legal  conclusion  opposed,  8. 

illustrated  in  Coleman  v.  Burr,  382. 

intent  is,  196. 
MESNE  PROFITS  recoverable,  26. 

during  period  of  redemption,  26. 

when  property  is  held  under  trust,  26. 
METHODS  of  obtaining  redress,  72. 

annulling  fraudulent  deed,  72. 

appointing  referee  or  receiver,  72. 

selling  on  execution,  72. 
MINGLED  property,  28. 

rule  as  to,  28. 

of  husband  and  wife,  305. 

wife  may  lose  it,  305. 

conflicting  views,  305. 


/ie/erences  \         INDEX.  \  are  io  seci ions.  "lyi' 

M.\^Gl.Y.V>—co7iiiniied. 

rule  in  bankruptcy,  305  n. 
MISJOINDER  of  causes  of  action,  135. 

hostile  claimants  cannot  join,  108. 
MISSOURI,  issuance  of  attachment  in,  12. 

creditor's  bill  against  absconding  debtor,  84. 
MISTAKE  in  fraudulent  conveyance,  not  corrected,  396. 
MIXED  CLAIMS,  prior  and  subsequent  to  alienation,  105. 
MODERN  CHANGES  in  the  law,  i. 
MONEY  EARNED,  but  not  due,  available,  n. 
MONEY  JUDGMENT,  wHcmi  disallowed,  179. 

allowed  against  vendee,  177,  178. 

in  equity,  51. 
MONOPOLY,  which  patent  confers,  is  property,  38. 
MORAL  SENSE,  weak  in  some  men,  8,  382. 

of  debtor,  not  binding  on  creditor,  8. 
MORAL  TURPITUDE,  proof  of,  8,  382. 

not  exacted,  8. 

obligations  as  to  consideration,  215, 

duty  to  pay  debt  barred  by  statute,  215. 

obligation,  statute  of  frauds,  215. 
MORTGAGEE  as  bona  fide  purchaser,  371. 

rule  in  New  York,  371. 
MORTGAGES,  347-359.     Sec  Chaitel  Mortgages. 

when  fraudulent,  347-359. 

for  just  debt,  may  be  overthrown,  207. 

absolute  conveyance  as  security,  238,  404. 

pre-existing  indebtedness  as  consideration,  371. 

declaring  deeds  to  be,  404. 

future  advances  should  be  shown  on  mortgage,  217. 

redeeming  from,  404a, 

assignee  may  set  aside,  115. 
MOTION,  uncertainty  in  pleading  reached  by,  140  11. 
MOTIVES,  often  unimportant,  8,  382. 

not  controlling,  187. 

testifying  to,  205,  205  ;/. 
MULTIFARIOUS  complaints,  150,  151,  152. 

complaints  bad  for,  150. 

pleadings  held  not  to  be,  151.  152. 

rules  applicable  to,  150-152. 
MUNICIPAL  C0RP0R.\TI0N  as  creditor,  90. 

from  date  of  tax  warrant,  90. 


yOA.  Ke/ercnces  \         INDEX.         \  are  to  sections . 

MUNICIPAL  CORVOKAmO]^— continued. 

may  adopt  voidable  act,  494. 
MUTUALITY  of  participation  in  fraudulent  intent,  199,  302,  319. 

vendor's  intent  alone  insufficient,  199. 

participation  by  infant,  199  n. 

as  to  voluntary  alienations,  200,  200  ;/. 

Laughton  v.  Harden,  200  //. 
NATIONAL  BANK,  receiver  of,  117. 

not  dissolved  by  receivership,  134. 
NATURAL  presumptions,  7. 

Judge  Black's  views,  7. 

consequence  of  an  act,  presumption  as  to,  9,  10,  382. 
NEGOTIABLE  INSTRUMENTS,  void  and  voidable,  446^. 

lis  pendens  doctrine  not  applicable,  157. 
NEW  ENGLAND  cases  as  to  change  of  possession,  249. 

transfers  presumptively  fraudulent,  249. 
NEW  APPOINTMENT  of  assignee  made  by  court,  316. 
NEW  TRIAL,  not  a  matter  of  right,  183a. 
NEW  YORK,  value  as  affecting  right  to  bring  bill,  23  n. 

and  Massachusetts,  choses  in  action  may  be  reached,  64. 

creditor's  bill  and  supplementary  proceedings  at  the  same  time,  65. 

no  receiver  in  ejectment,  187. 

rule  as  to  change  of  possession,  250. 

declarations  as  to  personalty,  277. 

sales  by  mortgagor  for  mortgagee  valid,  355. 

valid  title  from  fraudulent  vendee,  448  n. 

judgment  by  creditors  of  decedent,  79. 

supplementary  proceedings  are  special  proceedings,  61. 

assignee  must  attack  fraudulent  conveyance,  115. 

title  of  receiver  to  real  property,  116, 

specific  assignment  not  a  general  assignment,  339. 
NICHOLS  V.  EATON,  the  point  actually  decided,  364. 

the  case  stated,  364. 

the  dictum,  365. 

criticised,  365. 

the  true  rule,  366. 

re-stated,  361  n. 
NON-RESIDENT  DEBTOR,  jurisdiction  over,  84. 
NO  REIMBURSEMENT  at  law,  193. 
NO  DEFINITION  of  fraud,  13. 
NORTH  CAROLINA,  exceptional  practice  as  to  joinder  of  claims,  85. 

the  practice  deprecated,  85. 


He/ereTtces  \         INDEX.         \  are  to  seciions.  JQ'- 

NOTICE,  actual  and  constructive.  372-389 
(  T . )    Without  notice,  372. 

Judge  Story's  rule,  372. 

creditors  after  notice,  106. 
(2.)  Kinds  of  notice,  373. 

two  kinds,  actual  and  constructive,  373. 

both  defined,  373. 
(3.)   Constructive  notice  of  fraud,  374-376,  378-3S2. 

various  definitions,  374. 

rule  in  Stearns  v.  Gage,  375. 

the  doctrine  discussed,  375,  376. 

illustrations,  376. 

actual  belief,  377,  382. 

rule  in  Parker  v.  Conner,  378. 

comments,  382. 
(4.)  Facts  sufficient  to  excite  inquiry,  379-381. 

many  illustrations,  379-381. 

means  of  knowledge  equivalent  to  knowledge,  381. 
NOTORIETY  of  change  of  possession,  253. 

symbolical  delivery  insufficient,  253. 
NULLA  BONA,  execution  returned,  86,  87,  87  n. 
NULLITIES  defined,  415,  425. 

attempted  transfers  treated  as,  59,  69. 

and  irregularities  distinguished,  442, 

OATH  against  oath,  effect  of,  159. 

OBJECTIONS  as  to  non-joinder,  how  raised    134. 

OBSTACLES  to  development  of  the  law,  5. 

OFFER  to  rescind,  tender,  510^2, 

OMISSION  from  schedules,  when  fraudulent,  32c. 

OMNIA  PRAESUMUNTUR  CONTRA  SPOIJATOREM,  2S1. 

OMNIBUS  BILL,  creditors'  bill  so  called,  68. 

ONUS,  as  to  fraud,  5,  6,  224. 

affecting  marriage  relationship,  300. 
OPE^J  AND  CONCLUDE,  right  to,  271,  271  //. 
OPINION,  evidence  as  to  insolvency,  273,  273  n. 

as  to  value,  284, 

of  the  parties,  accorded  little  weight,  8. 
ORDER  OF  ARREST,  when  vacated,  191. 
OTHER  FRAUDS,  as  evidence,  282. 
"  OTHERS,"  meaning  of,  iio. 

who  included  in,  no. 


-56  References^        INDEX.         ^are  to  seciions. 

"  OTHERS  ''—continued. 

suing  on  belialf  of,  no. 

design  of  the  statute  as  to,  no. 
OVERCOMING  presumption  from  failure  to  change  possession,  255. 
OVERSEER  OF  POOR,  as  claimant,  124 

PARENT  AND  CHILD,  transactions  between,  475. 

daughter's  services  to  father,  218. 

no  implied  promise  to  pay,  218. 
PAROL  EVIDENCE,  to  vary  consideration,  221. 
PARTICEPS  CRIMINIS,  no  relief  to,  192,  214. 
PARTICULARITY  of  denial  in  answer,  162. 

general  answer  operates  against  defendants,  162. 
PARTICULARS,  bill  of,  ordering,  162^. 
PARTIES  COMPLAINANTS,  68,  73,  107-127.     ^'tr  Complainants. 

joinder  of  complainants,  108. 

when  heirs  cannot  sue,  121. 

when  widow  not  entitled  to  proceed,  121. 
PARTIES  DEFENDANT,  128,  129.     Sec  Defendant. 

joinder  of  defendants,  132,  133. 

in  forfeiture  action,  132a. 

question  of,  perplexing,  107. 

competency  of,  as  witnesses,  269. 

cross-examination  of,  281. 
PARTY,  as  witness,  269. 
PARTITION  SUIT,  mortgage  assailed  as  fraudulent,  61. 

the  theory,  63. 
PARTNERS,  may  sue  copartners  and  fraudulent  alienees,  54. 

object  of  suit  in  such  case,  54. 

arrest  of,  191. 

preferring  claims,  329. 

special,  cannot  be  preferred,  329. 

survivor  may  make  assignment,  329. 

limited,  assets  are  trust  fund,  329. 

corporators,  when  liable  as,  139. 

copartnership  and  individual  debts,  216. 
PAST  TRANSACTIONS,  declarations  as  to,  276. 
PATENT  RIGHTS,  monopoly  secured  by,  is  property,  38. 

may  be  assigned  by  operation  of  law,  38. 

can  be  reached  by  creditors,  24,  38. 

inchoate  right  to,  non-assignable,  38. 
PENALTY  for  non-payment  of  debts,  i. 

inflicted  upon  stockholders,  139. 


References  \         INDEX.  \  are  to  sections.  7^7 

PENDING  the  writ  or  suit,  conveyance  made,  22,  132^;. 

badge  of  fraud,  233. 

purchaser  bound,  132a. 
PENNSYLVANIA,  rights  of  administrators,  112. 
PER  SE  FRAUDULENT,  inadequacy  of  price  is  not,  232. 
PERSONAL,  judgment  against  fraudulent  vendee,  177,  178,  17S  n. 

money  judgment,  when  disallowed,  179. 

against  wife,  180. 

to  sustain  bill,  77. 

transaction  with  deceased,  testifying  to,  122. 
PERSONAL  PROPERTY,  mortgages  upon,  347-359. 

delivery  of  possession  of,  245-267. 

distijiction  between,  and  realty,  264. 

as  to  return  of  execution,  87. 
PERSONAL  REPRESENTATIVES,  as  complainants,  112,  113. 

as  defendants,  136. 

conveyances  binding  upon,  112,  113,  398. 

may  sue  for  cancelled  debt,  42. 

cannot  avoid  voidable  act,  511. 

claims  of  pass  by  assignment,  316(7. 
PERSONAL  TRANSACTIONS  with  deceased  person,  i2r. 

evidence  of,  121. 
PERSONALTY,  restraint  upon,  not  allowed,  363  n. 

in  name  of  third  party,  liable  to  seizure,  57. 

admissions  concerning  title  to,  excluded,  277. 
PLEA  or  answer,  158-167, 
See  Answer. 

of  bona  Jide  purchaser,  163. 
PLEADING,  141-167. 

See  Complaint. 

testimony  must  conform  to,  285. 

amendment  of,  156. 

bill  of  particulars,  i62fl. 

charging  fraud,  141. 

general  allegations  insufficient,  141 
PLEADINGS  IN  EQUITY,  not  so  strict  as  at  law,  60,  146. 

held  not  multifarious,  151,  152. 
PLEDGE,  purchase  of,  473. 

voidable  without  pledgor's  assent,  473. • 
PLEONASMS,  in  English  statutes,  1 1  «. 
POLICIES  of  insurance  for  wife's  benefit,  23,  312. 

when  not  assignable,  23. 


^68  l\e/cye>ic,'s\         INDEX.         \  are  to  sections. 

POSSESSION,  change  of,  245-267. 

See  Change  of  Possession. 

definition  of,  245. 

evidence  of  title,  245. 

concerning  possession,  245. 

possession  as  proof  of  fraud,  247. 

transfers  prima  facie  fraudulent,  248. 

as  evidence  of  fraud  per  se,  251. 

result  of  the  cases,  252. 

change  of,  must  be  continuous,  257. 

temporary  resumption  of,  258. 

concurrent,  259. 

excusing  want  of  change  of  possession,  261,  263. 

change  of  possession  of  realty,  265. 

possession  with  power  of  sale,  267. 

after  conveyance,  279. 

declarations  characterizing,  277-279. 

by  wife,  presumption  of  ownership,  301. 
POSSIBILITY  of  judgment  will  not  sustain  bill,  73. 
POST-NUPTIAL  marriage  settlement,  307,  308. 
See  HusijAND  and  Wife. 

upheld,  if  reasonable,  307. 
POWER  OF  ATTORNEY,  of  infants,  454. 

from  wife  to  husband,  198. 
POWER  OF  SALE,  by  mortgagor  in  mortgages,  347-359. 

policy  of  the  law  considered,  347-359. 
POWERS,  when  assets  for  creditors,  39,  40. 

English  rule  as  to,  39. 

views  of  Hardwicke  and  Somers,  39. 

rule  the  same  both  as  to  realty  and  personalty,  39. 

cannot  be  transferred,  39  //. 

statutory  changes  as  to,  40. 

New  York  policy  as  to,deplored,  40. 

of  alienations,  restraints  upon,  360-368. 
PRACTICE,  71. 

See  Complaint  ;  Answer  ;  Co:\iplainants  ;  Defendants. 

in  federal  courts,  71. 

equity  practice  prevails,  71. 

following  State  rules,  71. 
PRAYER  OF  COMPLAINT,  155. 

mistake  as  to,  not  fatal,  155. 

inapt  and  incongruous  prayers,  155. 


J^e/erencrsj         INDEX.  ^ are  io  seci ions.  76q 

PREFERENCE  IS  LEGAL,  390,  391. 
must  represent  actual  debt,  391, 
of  vigilant  creditors,  392. 
why  rewarded,  392, 

of  claim  in  which  assignor  is  partner,  329. 
of  special  partner,  disallowed,  329. 
assignments  to  prevent,  341. 
purpose  of  bankrupt  act  to  defeat,  390  //. 
theory  of,  390. 

secret,  when  avoided,  393,  394. 
for  wages,  392^;. 

by  supplementary  proceedings,  61. 
when  upheld,  11, 
PREMIUMS,  suit  to  recover,  proofs,  23  n. 

PRESUMPTION,  that  natural  consequence  of  an  act  was  contemplated, 
9,  10,  382. 
does  not  obtain  that  common  law  prevails  in  Russia,  64  //. 
against  fraud,  5-7. 
rule  as  to,  7, 
of  good  faith,  5,  6. 
of  innocence,  5. 
of  legality,  433. 
of  fraud  in  equity,  60. 
PRESUMPTIONS,  legal  and  natural,  7. 

PRESUMPTIVELY  FRAUDULENT,  conveyances,  94,  248. 
PRETENDED  CREDITOR  has  no  status,  91. 
PREVALENCE  of  fraudulent  transfers,  2. 

the  cause,  2. 
PRIMA  FACIE,  cases  of  fraud,  243. 
numerous  illustrations,  243. 
evidence  of  fraud,  247,  248. 
true,  answer,  159. 

failure  to  change  possession,  248,  250,  252. 
PRINCIPLES,  applicable  to  a  nullity,  425. 

nullity  ineffectual  for  every  purpose,  425. 
without  warrant  of  law,  425, 
governing  multifariousness,  150. 
PRIVATE  PURPOSES,  taxation  not  for,  438  //. 
PROCEDURE  in  federal  courts,  71. 

at  law  and  in  equity,- 51,  59,  60. 
PROCESS,  service  of,  creates  lien,  6r,  ^)8,  392. 
PROCRUSTEAN  FORMULA,  statutes  not  limited  by,  22. 
49 


nhQ  Re/erences\         INDEX.         yare  to  sections. 

PROFITS,  devise  of,  is  devise  of  lands,  262. 

debtor  cannot  give  away,  26. 
PROMISE  TO  MARRY  by  married  person,  void,  432. 
PROMISES,  of  third  parties  available,  43. 

doctrine  of  Lawrence  v.  Fox,  43. 

the  rule  not  universal,  43. 

not  recognized  in  Massachusetts,  43. 

nor  in  England,  43. 

theory  of  the  rule,  43. 

avoids  circuity  of  action,  43, 

founded  on  immoral  conduct,  432. 
PROOF  of  moral  turpitude,  8,  382. 

not  essential  to  avoid  transfer,  8. 

intent  to  defraud  subsequent  creditors,  98. 

judgment  or  lien,  270. 

of  consideration,  209,  222. 

mutuality  of  intent,  199. 
PROPER  AND  NECESSARY  PARTIES,  68  n. 

See  Parties. 
PROPERTY  susceptible  of  fraudulent  alienation,  23-50. 

the  rule,  24,  25. 

in  name  of  third  party,  57,  82. 

of  debtor,  theory  as  to,  11. 

subject  to  immediate  process,  11. 

value  of,  affecting  question  of  fraud,  23,  41. 

proving  value  of,  284. 

substituted  or  mingled,  28. 

of  equitable  character,  68  n. 
PROTECTION  OF  CREDITORS  is  the  policy  of  the  law,  t. 
PROVING  intent,  206. 

circumstances,  281. 

consideration,  219. 

recitals  as  evidence,  220, 

explaining  recitals,  221. 

value,  284. 
PROVISIONAL  RELIEF,  injunction,  receiver,  arrest,  184-191. 
(i.)   Importance  of  protnpt  relief,  184. 

forms  of  relief,  184. 
(2.)  Infimction  as  form  of,  185,  186.. 
when  allowed,  185. 
when  disallowed,  186. 


References^         INDEX.  \are  to  sections.  11^ 


PROVISIONAL  ^YAAY.Y— continued. 

(3.)  Receiver  in  contest  over  real  property.,  187. 

disinclination  of  the  courts  to  appoint,  187. 

why  provisional  relief  is  discouraged,  187. 

no  receiver  in  ejectment  in  New  York,  187. 
(4,)  Receiver  to  collect  alimony.,  188. 

practice  in  Wisconsin,  188. 

may  attack  fraudulent  transfers,  188. 
(5.)  Arrest  of  defendant,  19  [. 

actual  intent  to  defraud  necessary,  191. 
PUBLIC,  fraud  upon,  not  avoid  conveyance,  107. 

securities,  defective,  446^. 

policy  rendering  acts  void,  411. 
PUNISHMENT,  power  to  inflict,  abrogated,  2,  3,  3  ;/. 
PURCHASE  PRICP;  inadequacy  of,  232. 
PURCHASER  removing  incumbrances,  126. 

recovering  in  ejectment,  57. 

bona  fide,  369. 

with  notice  from  bona  fide  purchaser,  384. 

mortgagee  as,  371. 

of  chattel  mortgage,  168. 

subrogation  to  creditor's  lien,  195. 

See  Notice  ;  Bona  Fide  Purchaser. 
PURPOSE  of  the  inquiry,  3. 

QUESTION  FOR  COURT,  fraud  in  law,  9,  lo,  3S2. 

of  equity,  51. 
QUESTION  FOR  JURY,  intent,  9,  204. 

effect  of  badges  of  fraud,  226. 

to  weigh  declarations,  276, 

as  to  change  of  possession,  254. 

RATIFICATION  of  voidable  acts,  482-495. 
knowledge  essential  to,  483. 
of  executors'  voidable  acts,  484. 
receipt  of  proceeds  of  sale,  485. 
by  infant,  488. 

void  acts,  no  ratification,  489. 
ratifying  voidable  bill  of  lading,  490. 
by  retention  of  the  property,  493. 
of  voidable  corjiorate  acts,  494. 
effected  by  laches,  495. 


772  Jie/erences]        INDEX.         ^^are  io  seciians. 

REACHED,  property  that  cannot  be,  50,  50a. 
REAL  PROPERTY,  receiver  of,  187. 

change  of  possession  of,  264. 

possession  evidence  of  title,  264. 

the  cases  considered,  264. 

land  in  foreign  state,  157^. 

change  of  venue,  157^. 

receivers,  title  to,  116  n. 

situs  of  governs,  24. 

of  lunatic,  469. 
REALTY  AND  PERSONALTY,  declarations,  277. 

as  to  issuance  of  execution,  87. 
REASONABLE  TIME,  possession  within,  256. 
RECAPITULATION  of  creditors'  remedies,  72. 
RECEIVER,  has  no  title  to  tort  claims,  34. 

vi'hen  cannot  represent  creditor,  117. 

no  claim  to  exemptions,  46. 

in  supplementary  proceedings,  61,  116, 

as  complainant,  116,  188. 
'  power  to  appoint  over  national  bank,  117, 

recognition  of,  by  comity,  118. 

appointed  before  answer,  184. 

when  denied,  184. 

directing  transfer  to,  187. 

of  various  interests,  188. 

of  annuity,  188. 

of  a  living,  188. 

in  action  to  foreclose  contract,  187  ft. 

represents  creditors,  116. 

of  corporation,  rights  of,  117. 

when  insolvency  not  ground  for,  239  n. 

judgment  appointing,  170. 

in  contests  over  real  property,  187. 

title  to  realty,  116  ;/. 

to  collect  alimony,  188. 

title  on  death  of,  189. 

removal  of  receiver,  190. 

entitled  to  notice,  190. 

employment  of  debtor,  not  ground  of  removal,  190. 

foreign,  has  no  status,  118. 

summary  process  not  extended  to,  116. 

as  defendant,  133. 


References  I         INDEX.         I  t^re  to  sections.  '7  J ' 

suing  in  place  of,  73. 
RECITALS  of  consideration  as  evidence,  220. 

of  fictitious  consideration,  228. 

of  deed  avoiding  transfer,  10,  322. 

of  complaint,  140-157. 

of  answer,  158-167. 

explaining,  221. 

not  binding  on  creditors,  221. 
RECONVEYANCE  cannot  be  enforced,  396. 

theory  of  the  law,  396. 

when  allowed,  399. 
RECORD,  of  chattel  mortgage,  effect  of,  347. 

withholding  instrument  from,  effect  of,  235,  236, 

failure  to  record  in  fraud  of  bankrupt  act,  237. 
RECOVERING  improvements  and  rents,  26. 

assets,  23-50. 
REDEEMING  mortgaged  property,  404  a. 
REDEMPTION,  recovery  of  mesne  profits  during  period  of,  26. 

equity  of,  may  be  seized,  31. 
REFERENCE,  when  not  ordered,  62a. 

views  of  Gilbert,  J.,  as  to,  62^5. 
REIMBURSEMENT  and  subrogation,  192-195. 

actual  and  constructive  fraud,  192. 

actual  fraud  defeats,  192. 

constructive  fraud  does  not  defeat,  192. 

inequitable  transactions  set  aside  upon  terms,  192. 

policy  of  the  law,  192. 
(i.)  No  rciiiibiirsemciit  at  law,  193. 

transaction  at  law  wholly  valid  or  wholly  void,  193. 

not  so  in  equity,  192,  193. 
(2.)  Subrogation  of  purchaser  to  creditors'  lien,  195. 

when  permitted,  195. 
RELATIONSHIP,  effect  of,  93,  242. 

calculated  to  awaken  suspicion,  242. 

transaction  will  be  closely  scrutinized,  242. 

influence  of  Salmon  v.  Bennett,  242. 

not  necessarily  evidence  of  fraud,  242. 

when  coupled  with  other  badges,  242. 
RELEASES  exacted  in  assignments,  328. 

regarded  with  disfavor,  328. 

in  what  form  permitted,  328. 


774  I?e/erencesl         INDEX,  ^nre  io  seciions. 

RELIEF  before  and  after  sale,  58. 

at  law  and  in  equity,  59,  60,  176  ;/. 
RELINQUISHMENT  of  dower,  consideration  for  settlement,  299. 
REMAINDER,  estates  in,  recoverable,  29. 
REMEDIES  OF  CREDITORS,  51-72. 
See  Creditors'  Remedies. 

two-fold  object,  360. 

governed  by  lex  fori,  64. 

forms  of  relief,  4. 

reference  not  ordered,  62^. 
REMEDY  at  law,  59. 

by  suit  in  equity,  60. 
REMOVAL  or  dismissal  of  receiver,  190. 

similar  to  jurisdiction  dissolving  injunction,  190. 

employment  of  debtor  no  ground  of,  190. 

to  Federal  courts,  71. 
RENTS,  and  profits  recoverable,  26. 

debtors  cannot  give  away,  26. 
REPLEVIN,  assignee  may  bring,  316a. 
REPUGNANT  CONDITIONS,  void,  362,  363. 

defined,  2)^'^  n. 

theory  of  the  law,  362. 
REQUISITES  of  a  fraudulent  conveyance,  23. 

characteristics  and  classes,  15. 
RES  ADJUDICATA,  question  of  intent,  when,  203. 

judgment,  when,  168. 

conclusive  in  other  forms  of  procedure,  169. 
RESERVATIONS,  by  debtor,  creditors  may  reach,  32. 

secret,  effect  of,  272. 

avoid  assignments,  326. 

of  exempt  property,  not  fraudulent,  326. 

of  surplus,  by  assignor,  327. 
RES  GEST^,  concerning,  276,  279. 

importance  of  the  rule,  276. 

illustrations,  276. 

must  be  concomitant  with  principal  act,  279. 

duty  of  the  jury  as  to,  276. 
RESTITUTION  by  infant,  507. 

by  lunatic,  510. 

reimbursement  and  subrogation,  192,  193,  195. 

general  rules  as  to,  510^. 
RESTRAINTS  upon  ahenation,  14,  361. 


References  \         INDEX.         \  are  to  sections.  Tl^ 

RESTRAI  NTS—r^/^//;///^^. 

by  debtor  in  fraud  of  creditors,  14. 

theory  of  the  law,  361. 

English  and  American  cases,  361  «. 

not  favored,  362. 

upon  personalty,  not  allowed,  263  ;/. 
RETROSPECTIVE  LEGISLATION  affecting  remedies,  417. 

effect  of,  417. 

no  restrictions  upon  congress,  417  n. 
RETURN  of  execution  unsatisfied,  74.  86. 

distinction  between  realty  and  personalty,  87, 

raising  the  objection,  88. 

chancery  rule,  75. 

of  officer,  conclusive,  74. 
REVERSION,  estates  in,  may  be  reached,  29. 
REVOCATION,  reserving  power  of,  358. 
RHODE  ISLAND,  practice  as  to  absconding  debtors,  84. 
RIGHT  to  sue,  transfer  of,  92. 

of  creditors,  existing  and  subsequent,  89,  97  //. 

of  creditors,  protection  of,  i. 
ROBINSON  V.  ELLIOTT,  rule  embraced  in,  348. 

opposing  rule  and  cases,  352,  353. 
ROMANS,  laws  of,  concerning  insolvents,  r. 
ROYALTIES  on  books,  recoverable  by  creditors,  37. 
RULE  as  to  exempt  property,  46. 

fraudulent  purchases  of  exemptions,  47. 

covinous  alienations  of  exemptions,  48. 

conflicting  cases,  49. 

abandoned  exemptions,  50. 

of  construction  of  statute  of  Elizabeth,  20. 

same  at  law  and  in  equity,  29. 

of  procedure  in  federal  courts,  71. 

judgment  in  personal  actions,  80. 

as  to  restitution,  510^;. 
RUSSIA,  no  presumption  that  common  law  prevails  in,  64  //. 

SACRIFICE,  transfer  to  prevent,  325. 

SALARY,  not  reached  in  supplementary  proceedings,  61  //. 

exempt  sixty  days  before  proceedings,  6  [  //. 

of  municipal  officer,  exempt,  61  //. 
SALE,  possession  with  power  of,  267. 

doctrine  of  Robinson  v.  Elliott,  348-351. 


776  Re/erencss^         INDEX.  \^are  U  sections. 

S  A  L  E — contin  tied. 

relief  before  and  after,  58. 

judgment  avoids,  only  as  to  creditors,  171,  395-401. 

declarations  before  and  after,  277,  278, 
SALES  UPON  CREDIT,  effect  of,  240,  332,  Z3?>^  356. 

hinder  and  delay  creditors,  332,  333 
SCHEDULES,  fraudulent  omissions  from,  320. 

unintentional  omission,  320. 
SEATS  in  stock  exchange  are  assets,  35. 

the  cases  discussed,  35. 

not  liable  to  execution,  35  n. 
SECRECS^,  evidence  of,  234. 

is  badge  of  fraud,  234. 

and  concealment  to  be  considered  by  jury,  234. 

agreement  to  conceal  not  per  se  fraudulent,  234. 

Mr.  May's  views  as  to,  234  n. 
SECRET  PREFERENCE,  393. 

when  avoided,  393,  394. 
SECRET  TRUST,  272. 

common  form  of  fraudulent  conveyance,  272. 

policy  of  the  law,  272. 

apparent  on  face  of  deed,  272. 

implied  from  extrinsic  circumstances,  272. 
SECURITY,  more  than  necessary,  effect,  241. 

permitting  conveyance  to  stand  as,  141. 

corrupted  with  fraud,  no  relief,  238. 
SELECTING  transfers  to  attack,  67. 
SEPARATE  estate  of  wife,  free  from  husband,  304. 
SEQUESTRATOR,  when  entitled  to  sue,  116. 
SERVICES  by  member  of  family,  218. 

do  not  constitute  valuable  consideration,  218. 
SETTLEMENT,  payable  on  bankruptcy,  void,  364  n. 

release  of  dower  as  basis  of,  299. 
See  Marriage  Settlement. 
SEVERITY  of  Roman  law,  t. 
SHAM  contrivance  a  fraud,  15. 
SHERIFF,  money  in  hands  of,  reached,  2)3- 

promise  made  to,  available  to  creditor,  43  1?. 

as  complainant,  81,  120. 

what  he  must  show  against  stranger,  297. 
SHIP  at  sea,  possession  of,  256. 
SIMPLE  CREDITORS,  cannot  sue  alienee  in  case,  62. 


Re/erences\         INDEX.         [are  to  sections.  777 

SIMPLE  CREDITORS— ^^«//«//^^. 

not  entitled  to  injunction,  52. 

rights  of,  73. 

remedies  of,  73  n. 

cannot  unite  with  judgment-creditors,  108. 
SISTER,  conveyance  by,  to  brother,  not  fraudulent,  5. 

preference  to,  dividend,  390. 
SITUS,  law  of,  governs  in  following  real  estate,  24. 
SLANDER,  claims  for,  cannot  be  reached,  34. 
SOLVENCY,  evidence  of,  95. 

the  cases  considered,  95. 
SON  to  father,  sale  by,  242. 

SOUTH  CAROLINA,  creditor's  bill  against  absconding  debtor,  84. 
SPECIFICATION,  of  ground  for  removal  of  receiver,  190. 
SPECULATION,  placing  property  beyond  risk  of,  100. 

such  conveyances  avoided  by  subsequent  creditors,  loo. 
SPENDTHRIFT  TRUSTS,  360-368. 

policy  of  the  law  concerning,  360. 

Nichols  v.  Eaton  reviewed,  364,  365. 
(i.)  Aversion  to  exemptions  not  statutory,  360. 

purpose  of  the  law,  360. 

creditor's  property  a  trust  fund,  360. 

Williams  v.  Thorn,  360. 
(2.)   Restraints  upon  alienations,  361. 

theory  of  the  law,  361. 

treated  as  void,  361. 

repugnant  conditions,  362. 

illustrations,  362. 
(3.)  Nichols  V.  Eaton  ;  the  point  actually  decided,  364. 

the  dictum,  365. 

comments  upon  it,  365. 

the  correct  rule,  T^dd. 
(4.)  Broadivay  Bank  v.  Adams,  367. 

review  of  the  case,  367. 

doctrine  dissented  from,  367. 
(5.)  Spendthrift  trusts  in  Pennsylvania,  368. 

birth-place  of  the  doctrine,  368. 

dissent  from  it  in  that  State,  368. 
STAND  by,  doctrine  of,  287. 

STATE  COURT,  proceeding  on  judgment  in  federal  court,  78. 
STATUS  OF  ATTACKING  CREDITORS,  73-78,  106. 
(i.)  Rights  of  creditors  at  large,  52-73. 


778  Ne/erences'\         INDEX.  ^are  to  seciions. 

STATUS   OF   ATTACIvIiNG    CREDITORS— /vV/^/j   0/    creditors    at 
large — continued. 

cannot  assail  assignments,  73. 

must  have  a  lien,  73. 

equity  not  a  remedy  to  collect  debts,  73. 

judgment  and  execution  essential,  73. 

judgment  conclusive  as  to  indebtedness,  74. 

rule  as  to  necessity  for  judgment  ancient,  75. 

existed  in  England,  75. 

recognized  in  chancery,  75. 
(2.)  Judgments  sufficient,  76. 

ordinary  money  judgment,  76. 

judgment  in  chancery  sufficient,  76. 

justice's  judgment,  when  docketed,  76. 

confession  of  judgment,  76. 

demand  classified  by  probate  court,  76. 

in  equitable  actions,  80, 
(3.)  Judgments  insufficient,  77. 

barred  by  statute,  77. 

judgment  not  personal,  77. 

justice's  judgment,  77, 

foreign  judgment,  78. 
(4.)   Creditors  of  a  decedent,  79. 

must  have  judgment  in  New  York,  79. 

rule  otherwise  in  other  States,  79. 

reasons  of  the  rule,  79. 
(5.)  Specific  lien  by  attachment,  81. 

the  cases  reviewed,  81. 

New  York  cases,  81. 

lien  by  attachment  insufficient,  81. 
(6.)    When  judgment  is  unnecessary,  ^t,. 

no  remedy  at  law,  83. 

creditor  under  an  injunction,  83. 

controversy  in  the  cases,  83. 

absconding  and  non-resident  debtors,  84. 
(7.)  As  to  execution,  86,  87. 

return  of  execution  unsatisfied,  86. 

distinction  between  realty  and  personalty,  87. 
raising  the  objection,  §8. 
STATUTE  13  Eliz.,  c.  5,  19. 

basis  of  all  legislation,  19. 
its  object,  II,  19. 


He/erenccsl         INDEX.         \  are  io  seciiotis.  77Q 

STATUTE — continued. 

bottomed  on  immoral  intention,  9  ;/. 

its  interpretation  and  construction,  20. 

merely  declaratory  of  common  law,  16. 

27  Eliz.,  c.  4,  21. 

of  limitations,  begins  to  run  when,  292. 

of  limitations,  in  equity,  293. 

of  frauds,  311. 

controlling  in  federal  courts,  71. 

2  Rich.  II,  18. 
its  purpose,  18. 

3  Hen,  VII,  c.  4,  18. 
50  Edw,  III,  c.  6,  18. 

foreign  statutes,  effect  of,  405  //. 
STATUTE  OF  FRAUDS,  debtor  not  bound  to  plead,  215. 

acts  void  by,  436,  437. 

nature  of,  explained,  436,  437, 

agreement  outside  of,  296. 
STATUTES  OF  ELIZABETH,  declaratory  of  common  law,  16. 
STATUTORY  EXEMPTIONS,  46-50. 

aversion  to  exemptions  not  statutory,  360. 

covinous  alienations  of,  48. 

conflicting  cases,  49. 

abandoned,  50. 
STATUTORY  liability  of  stockholders,  139. 
STATUTORY  PROCEEDINGS,  affecting  infants  and  lunatics,  469. 

in  derogation  of  common  law,  469. 

must  be  strictly  followed,  469. 

fatal  defects  in,  469. 

changes  as  to  executors  and  administrators,  112. 
STEARNS  V.  GAGE,  rule  in,  375. 
STOCK  EXCHANGES,  seats  in,  are  property,  35. 

may  be  reached  by  creditor,  35. 

seats  not  liable  to  execution,  35  ;/. 

character  of,  discussed,  35. 
STOCKHOLDERS  as  defendants,  119,  139. 

when  creditors  may  sue,  119. 

statutory  liability  of,  rests  in  contract,  139. 

may  be  sued  in  foreign  court,  139. 

when  not  entitled  to  sue,  73. 

suit  by,  109. 

joining,  128. 


730  Jie/ere»ces  \         INDEX.         \  are  to  sections. 

STOCKS  may  be  reached,  24. 

lis  pendens  does  not  apply,  157. 
STORY,  J.,  constructive  fraud  defined  by,  323. 
STRANGER,  may  take  advantage  of  void  act,  416,  425. 
STUDIED  FORMALITY,  will  not  save  transaction,  241. 
SUBROGATION  of  surety,  in. 

of  purchaser  to  creditor's  lien,  195. 
the  rule  in  New  York,  195. 
and  reimbursement,  192,  193,  195. 
of  subsequent  creditors,  103. 

See  Reimbursement  and  Subrogation. 
SUBSEQUENT  ACTS,  to  prove  original  purpose,  227. 
SUBSEQUENT  CREDITORS,  96-106. 

(i.)   Fraud  upon  subsequent  creditors,  96,  97  n. 
the  practical  distinction,  96. 
the  cases  considered,  96-106. 
intent  to  defraud,  96,  97,  202. 
(2.)  I?itent  as  affecting,  96,  202. 

must  be  directly  shown,  98. 
may  be  inferred,  98. 

no  difference  between  existing  and  subsequent,  98. 
(3.)  Placing  property  beyond  risk  of  ventures  or  speculations,  100,  loi, 
theory  of  the  law,  96,  97,  100,  loi. 
conveyances  avoided,  loi. 
transfers  sustained,  102. 
(4.)  Mixed  claims,  104,  105. 

subsequent  creditors  sharing  with  antecedent  creditors,  104. 
accruing  prior  and  subsequent,  104. 
(5.)  With  notice,  106. 

cannot  generally  avoid  alienation,  106. 
SUBSTITUTED  PROPERTY,  rule  as  to,  28. 

goods,  lien  extended  to,  385. 
SUFFICIENT  CONSIDERATION,  222. 
not  sufficient.  223. 
judgment  to  sustain  bill,  76. 
SUING  on  behalf  of  others,  109. 
SUIT  IN  EQUITY,  51,  60. 

advantages  of,  60. 
SUPPLEMENTARY  PROCEEDINGS,  nature  of,  61,  64. 
remedy  of,  61. 

a  special  proceeding  in  New  York,  61. 
substitute  for  creditors'  bills,  6t. 


References}         INDEX.         \are  to  sections.  78 1 

SUPPLEMENTARY  PROCEEDIxVGS— ^^«//;;//^^. 

commencement  of,  confers  lien,  6i. 

lien  of,  how  defeated,  6i. 

lien,  effect  of  death,  6i  n. 

what  can  be  reached,  6i,  64. 

not  exclusive,  61, 

creditors  may  abandon,  61. 

claims  of  third  party,  61. 

must  be  based  on  judgment  in  personam,  6r,  76. 

receiver  appointed  in,  63,  188. 

receiver  represents  creditors,  61. 

interests  reached  by,  61. 

may  be  brought  in  Federal  courts,  61  n. 

when  not  in  State  courts,  61  «. 

salary  and  earnings,  61  fi. 
SUPPORT,  of  debtor  in  early  times,  i  n. 

as  consideration  for  transfer,  211. 
SUPPRESSION  or  concealment,  subsequent  fraud,  235. 

of  deed  or  mortgage,  235,  235  n. 

in  fraud  of  bankrupt  act,  237. 
SURETY,  as  creditor,  90,  in. 

procedure  by  1 1 1  ti. 

claim  against,  misjoinder,  135. 

on  appeal  bond,  in. 

entitled  to  subrogation,  nt. 

as  simple  creditor,  in. 
SURPLUS  income  may  be  reached,  45,  360. 

theory  of  the  law,  45. 

moneys  reached,  63. 
SURROGATE,  cannot  determine  as  to  fraudulent  transfer,  12  n. 
SUSPICION,  insufficient  to  establish  fraud,  5,  228. 

tangible  facts  must  be  shown,  283. 

evidence  must  convince  the  understanding,  2S3. 
SWORN  ANSWER,  taken  as  true  when,  160. 
SYMPATHY,  with  fraudulent  debtors,  5. 
TALENTS  of  debtor,  creditor  cannot  command,  50  a- 
TANGIBLE  FACTS,  to  establish  fraud,  5. 

suspicions  insufficient,  5,  6,  283. 
TANGIBLE  PROPERTY  may  be  reached,  23. 
TAXATION,  not  for  private  purposes,  438  >i. 
TEMPORARY  resumption  of  possession,  258. 

when  does  not  render  sale  fraudulent,  258. 


-82  J^e/erentes^         INDEX.         [ 


are  to  sections. 


TEM  VO^KKY— continued. 

opposing  illustration,  258. 

im])rovements,  26. 
TEMPTATION  of  debtors  to  commit  fraud,  2. 
TENANT  IN  FEE,  condition  not  to  alien,  void,  362. 
TERRITORIAL  jurisdiction,  change  of  venue,  157a. 
TESTIFYING  as  to  intent,  205. 

as  to  value,  284. 
See  Evidence. 
TESTIMONY  must  conform  to  pleading,  285. 

to  overcome  answer,  160. 

as  to  intent,  205. 

as  to  matters  not  in  issue,  excluded,  285. 
TESTS,  of  infant's  acts,  450. 

of  fraudulent  conveyances,  15,  15a. 
THIRD  PARTY,  reaching  property  purchased  in  name  of,  57,  82. 

is  it  liable  to  execution,  57. 

may  be  attached,  57. 

consideration  paid  by  debtor  for,  57,  57  n. 

enforcing  promises  of,  43. 

doctrine  of  Lawrence  v.  Fox,  43. 

conflict  in  the  cases,  43. 

promise  to  sheriff  available  to  creditor,  43  71. 

claiming  property  in  supplementary  proceedings,  61. 
THREATENING  to  make  assignment,  342. 

not  considered  a  ground  of  attachment,  342. 

conflict  in  the  cases,  342. 

the  safer  rule,  342. 
TITLE,  on  death  of  receiver,  189. 

possession  as  evidence  of,  245. 

from  fraudulent  vendee,  386,  448  ;/. 

voidable  for  fraud  and  for  infancy,  distinguished,  448. 

judgment  transferring,  172. 

equity  cannot  create,  60  n. 
TORT  CLAIMS,  cannot  be  reached,  34. 

creditor,  123. 

not  transferred  by  assignment,  316a. 
TORT,  to  property,  is  assignable,  34. 

claimant  is  a  creditor,  90,  123. 

creditor  as  complainant,  123. 

illustrations  of  rights  of,  123. 
TRACING  THE  FUND,  44. 


J^e/erences  \         INDEX.         [are  io  sections.  ~S 

TRACING  THE  FVND—co»fm»ed. 

may  be  followed  into  any  property,  44. 
TRADE-MARKS  are  assets,  36. 

pass  to  assignee  as  property,  36. 

under  bankrupt  law,  36. 

personal,  rule  as  to,  36. 
TRANSACTIONS,  palpably  fraudulent,  10. 

fraud  must  be  inception  of,  227. 

with  deceased,  testimony  concerning,  121. 

between  husband  and  wife,  300. 

parent  and  child,  475. 

pledgor  and  pledgee,  473. 

attorney  and  client,  474. 
TRANSFER  pending  suit,  effect  of,  22,  233. 

is  mark  of  fraud,  233. 

of  right  to  sue,  92. 

to  prevent  sacrifice,  325. 

of  property  by  assignment,  316^7. 
TRANSFERS  inuring  as  assignments,  339. 

presumptively  fraudulent,  248. 
TRESPASS,  judgment-creditor  in,  as  comjjlainant,  123. 
TRICK  AND  CONTRIVANCE  to  defraud  creditors,  15. 
TRIVIAL  VALUE,  property  which  is  of,  23,  41. 

not  fraudulent  to  assign,  23. 
TRUST,  for  debtor's  benefit  avoids  conveyance,  10. 

spendthrift,  360-368.     Sir  Spendthrift  Trusts. 

for  indefinite  period,  fraudulent,  11. 

fraud  apparelled  and  clad  with,  22. 

property  in  name  of  third  party,  57,  57  //. 

essential  to  create  assignment,  316,  316  //. 
TRUST  FUND,  creditor's  property  considered  as,  360. 

capital  of  corporation  is,  1 1 7. 
TRUST  INCOME  available  to  creditors,  45,  360. 

above,  what  is  needed  for  support,  45. 

Williams  v.  Thorn  considered,  45. 
TRUST  PROPERTY,  does  not  pass  by  assignment,  316.7. 
TRUSTEE,  and  cestui  que  trust  as  defendants,  137. 

when  may  sell  on  credit,  333  //. 

fraudulent  grantee  as,  385. 

ex  maiejicio,  300. 
TURPITUDE  need  not  be  shown,  8. 
tendency  of  the  cases,  8. 


784  Re/crencesX         INDEX.         \are  to  sections. 

TWYNE'S  CASE,  stated  and  discussed,  22. 
decided  in  160 1,  22. 
its  great  importance,  22. 
badges  of  fraud  in,  22,  231, 
rule  as  to  change  of  possession  in,  245. 
its  limited  scope,  22. 
growth  of  the  law  since,  22. 
effect  of  secrecy  as  shown  by,  22. 
generality  of  gift,  22. 
construed,  use  by  vendor,  22. 
expression  of  honesty  in  deed,  22. 

ULTRA  VIRES,  doctrine  of,  411,  411  7u 

UNCERTAINTY  IN  PLEADING,  reached  by  motion,  140  n. 
UNDISCLOSED  INTENT,  evidence  of  inadmissible,  205  n. 
UNDUE  INFLUENCE,  13  n,  481. 

not  defined  by  the  courts,  13  n. 

acts  voidable  for,  481. 

views  of  Andrews,  J,,  481. 
UNFINISHED  WORK,  finishing  up  by  assignee,  330,  331,  331  n. 
UNILATERAL  evil  intent  will  not  overturn  transaction,  207. 
UNITED  STATES  SUPREME  COURT,  appeal  to,  407. 

certificate  of  division,  407(7. 
UNITING  causes  of  action,  55. 

joinder  of  claims,  54. 

various  illustrations,  55. 

ejectment  and  equitable  relief,  55, 

complainants,  107. 

defendants,  132. 
UNNECESSARY,  judgment  when,  83, 

UNPAID  SUBSCRIPTIONS,  joinder  of  stockholders,  128. 
UNREASONABLE  inadequacy  of  price,  209. 

evidence  of  secret  trust,  209. 
UNRECORDED  DEED  or  mortgage,  235,  235  n. 

concealment  in  fraud  of  bankrupt  act,  237. 
UNREPRESENTED  PARTIES,  no  judgment  in  favor  of,  173. 
UNUSUAL  ACTS  and  transactions,  241. 

constitute  badges  of  fraud,  241. 

various  illustrations,  241. 
USURY,  liability  of  endorser  on  note  void  for,  446a. 

claims  not  joined,  132  //. 

debt,  providing  for,  286. 


Re/erences  \         INDEX,         \  are  io  sec(tt>nt.  7o^ 

VALID  or  void  at  law,  51. 

different  rule  in  equity,  51. 

title  from  fraudulent  vendee,  386,  448  n. 

between  the  parties,  fraudulent  conveyances,  395-400. 
VALUABLE  CONSIDERATION,  207-223. 
See  Consideration. 

what  is,  209. 
VALUE,  as  affecting  fraudulent  transfer,  23. 

an  important  element,  23. 

former  rule  in  New  York,  23  n. 

change  of  rule  as  to,  23  n. 

Pennsylvania  cases,  as  to,  23  n. 

gifts  of  small  value  not  fraudulent,  41, 

proving  it  by  experts,  284. 

recovering  judgment  for,  177,  178,  ijS  n. 
VARIANCE,  rule  as  to,  155. 

testimony  must  conform,  2S5.] 

judgment  must  be  for  relief  demanded,  181. 

must  accord  with  complaint,  182. 
VENDEE,  insolvency  of,  274. 

fraudulent,  may  create  valid  lien,  195. 

evidence  of,  274. 

title  from  fraudulent,  386. 
VENUE,  change  of,  i57<J'. 

land  in  foreign  country,  157^;. 
VERDICTS,  contradictory,  183. 

when  set  aside,  204. 

when  given  under  misapprehension,  304. 
VERIFICATION  of  pleading,  155,  167. 

waiver  of,  167. 

defendant  may  verify,  167. 
VESSEL  AT  SEA,  delivery  of,  262. 
VIGILANT  CREDITORS,  entitled  to  preference,  392. 

no  preference  in  estate  of  decedent,  392. 
VIOLENCE,  not  necessary  to  constitute  duress,  47S. 
VIRGINIA,  creditors'  bill  against  absconding  debtor,  84. 
VOID  ACTS,  what  are,  411. 

illustrations  of,  416. 

cannot  be  ratified,  416. 

adjudications  to  avoid,  418. 

no  degrees  of,  419. 

principles  applicable  to,  425. 
50 


yg5  Fe/erencei]         INDEX.         [are  to  seciians. 

VOID  AND  VOIDABLE  ACTS,  408-446. 

importance  of  the  distinction  between,  408. 
discussed,  408. 

as  to  fraudulent  conveyances,  73, 
how  usually  considered,  408. 

great  confusion  in  the  distinction  between,  408,  445. 
the  cause,  408. 

effects  of  mistakes  concerning,  408. 
distinction  between,  408,  411,  420. 
void  and  voidable  confounded,  409  n. 
importance  of  the  inquiry,  409. 
void  and  voidable  marriage,  441. 
negotiable  instruments,  446.^. 
defective  public  securities,  4461^. 
(i.)  Distinction  generally  stated^  4'^^- 
when  acts  are  void,  411. 
from  considerations  of  public  policy,  411. 
.    when  voidable,  411. 

affecting  rights  of  individuals,  411. 
illustrations  of  voidable  acts,  411. 
acts  of  infants,  lunatics,  and  idiots,  411. 
acts  of  corporations  ultra  vires,  411. 
(2.)  Definitions,  412,  4i3'  4i5>  425,  426. 
errors  in  early  definitions,  412,  413. 
doctrine  of  degrees  of  void  acts,  413. 
other  inaccuracies,  414. 
nullities  or  void  acts  defined,  415. 
illustrations  of  void  acts,  416. 
(3.)    Void  and  illegal  acts  discussed,  429. 

void  acts  which  are  not  illegal,  435. 
guilty  knowledge,  431. 
illegal  acts,  432. 
presumption  of  illegality,  433. 
(4.)    Void  acts  lohich  are  not  illegal,  435. 

acts  void  by  statute  of  frauds,  436,  437. 
VOID  USED  IN  THE  SENSE  OF  VOIDABLE,  445. 
the  error  very  common,  445. 

applied  to  fraudulent  conveyances,  317,  408,  445. 
in  leases  and  insurance  policies,  445. 
assignments,  445. 
bankrupt  act,  445. 
terms  "become  void"  and  "determined,"  distmguished,  446. 


Re/trenc9t\        INDEX.         [  are  to  secitons.  7^7 

VOIDABLE  ACTS,  426,  447-481, 

"void"  means  "voidable,"  in  act  of  Elizabeth,  317,  408,  445. 

when  acts  are,  411. 

etfectual  until  impeached,  426  n. 

defined  and  discussed,  426. 
(i.)    Titles  void  for  fraud  and  for  infancy  distinguished^  448. 

valid  title  from  fraudulent  vendee,  448  //. 
(2.)  Infants  acts,  449-459. 

tests  as  to,  450. 

classes  of,  45  i. 

usually  voidable,  452. 

judgments  against,  453. 

power  of  attorney,  454. 

acts  binding  upon,  459. 
(3.)   Contracts  of  lunatics,  A(yo-^6(). 

what  incapacity  must  be  shown,  461. 

weakness  of  mind  insufficient,  462. 

for  necessaries,  463. 

act  of,  after  inquisition,  464. 

judgments  against,  465. 

void  and  voidable,  466. 

deed  of,  467. 

executory  contracts  of,  468. 

statutory  proceedings  affecting  property  of,  469. 
(4.)  Purchases  by  parties  occupying  positions  of  trust,  470. 

of  executors  and  trustees,  471. 

of  agents,  472. 

of  pledgee,  473. 

of  attorney,  474. 
(5.)  Other  phases,  474-481. 

transactions  between  parent  and  child,  475. 

legal  effect  of  drunkenness,  476. 

of  duress,  475-480. 

undue  influence,  481. 
VOIDABIvE  PURCHASES  by  parties  occupying  positions  of  trust,  470. 
VOID  CONDITIONS,  361. 
VOID  IN  PART,  void  ///  toto,  194,  434- 

illustrations  of  tlie  rule,  194,  434. 

the  word  construed,  317. 
VOLUNTARY  CONVEYANCES,  as  to  existing  creditor.-,  92. 

to  relatives,  242. 

confusion  in  the  cases,  93. 


788  References^        INDEX.         [are  to  sectiom. 

VOLUNTARY  CON\EYKNC¥.S— continued. 
only  presumptively  fraudulent,  94,  208. 

intent  as  affecting,  200,  208,  319. 

the  cases  as  to  intent  affecting,  200. 

need  not  be  mutual,  200. 

assignments,  316. 

rule  as  to  avoidance  of,  316-346. 

defined,  208. 

what  is  consideration,  209. 

by  corporation,  119. 

WAGES,  preference  in  New  York,  392^. 
WAIVER  of  verification,  167. 

amendment  of  41st  rule,  167  «. 

defendant  may  verify  answer,  167. 

of  defect  of  parties,  133. 
WARRANTOR  as  creditor,  89. 
WARRANTY,  implied  from  indorsement,  446a. 
WEAKNESS  OF  MIND  will  not  avoid  contract,  462. 
WHAT  CANNOT  BE  REACHED,  50a. 
WHOLE  ESTATE,  conveyance  of,  231. 
WIDOW,  as  complainant,  121. 

dower  of,  30,  2,S,  61,  70,  299. 

when  cannot  sue  in  chancery,  121. 

when  not  entitled  to  annul  transfer,  121. 
WIFE,  assignment  of  policy  by,  23,  298-315.     See  Husband  and  Wife. 

crops  on  lands  of,  27. 

fraud  upon,  form  of  procedure,  70. 

as  creditor,  90,  122. 

when  claim  should  be  rejected,  300  n. 

services  by,  to  husband,  218. 

husband  may  act  as  agent  for,  303. 

proof  of  fraud  against,  212. 

advances  by,  defense,  222. 

separate  property  of,  304. 

transfers  affecting  dower,  315. 

money  judgment  against,  180. 
WILL,  right  of  creditors  to  oppose,  127. 
WILLIAMS  V.  THORN,  its  doctrine  approved,  46,  360. 
WISCONSIN,  right  of  personal  representatives,  112. 
WITNESS,  competency  of  party  as,  269. 

competency  of  wife  as,  -^13. 


Jie/erencesl         INDEX.         \  an  ia  sections.  7^9 

WITNESS— ^^/////;«^,/. 

party  as,  281. 

cross-examination  of,  281. 

to  overcome  answer,  159. 
WORD  "disposed"  construed,  12. 

"  fraud,"  use  of  in  pleading,  141.  . 
WORDS  "hinder,  delay,  or  defraud,"  11. 

discussed,  11. 

intent  to  do  either  sufficient,  11. 

not  synonymous,  11. 
WRITTEN  INSTRUMENT,  difficulty  of  proving  fraudulent,  6. 
WRONG,  suspicion  of,  not  sufficient  to  maintain  suit,  5. 
WRONGFUL  EFFECT,  must  accompany  wrongful  purpose,  107. 


Whole  Number  of  Pages,  S$^. 


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